Seanad debates

Wednesday, 1 July 2009

12:00 pm

Photo of Paudie CoffeyPaudie Coffey (Fine Gael)

I welcome the Minister and his officials to the House for the debate on the Bill. The Fine Gael Party in principle supports the general tenor and thrust of the Bill, in which the Minister proposes to broaden the revenue base for local authorities. It is a widely debated issue, not only in this Chamber and the Lower House but also in many local authority chambers throughout the country. Indeed, it has been the subject of many conferences and I know my colleague, Senator Glynn, has attended many conferences and has made contributions on the whole area of local government funding.

This Bill breaks new ground in providing a way in which local authorities can raise and broaden their revenue base. However, there are implications for the implementation of the Bill that need further analysis and clarification from the Minister. He briefly referred to the charges for mobile homes, which has already been widely debated by the public, including on public radio shows, as the Minister will know - one Senator referred this morning to this sudden Government U-turn on the mobile charge as "the Joe Duffy amendment". The U-turn is welcome. Many people have mobile homes in holiday parks which they do not own and they pay an annual charge for the use of that holiday park. While they may have owned the mobile home for decades, this new charge would have been additional and, therefore, the Government amendment to remove the section that applies a charge is welcome.

In a way, this amendment tells us that the Bill has been rushed, despite its general thrust having been announced in the budget of October 2008, where it was indicated that a €200 charge would apply to non-principal residences in this country. Why has there been a delay and why is the Bill suddenly going through all Stages in the House on one of the last sitting days of the session? If Opposition parties want to table amendments on Report Stage, we would be entitled to time to do so, which would mean the business of the Seanad would have to be rescheduled to facilitate the debate. Any reasonable person would acknowledge that this is not the best way to introduce legislation. The Minister needs to take account of this point and he should not try to rush legislation through the House in this manner.

I wish to address some of the measures contained in the Bill. To broaden the revenue base for local authorities is certainly a welcome element and is the main thrust of the Bill. It is estimated it will yield in excess of €40 million per annum for local authorities, although this will vary from one local authority area to another. Obviously, much building has taken place in the commuter belt around Dublin and the local authorities in that area stand to gain much more than those in other areas, where there is not as many second residences. Some areas will, therefore, have a slight imbalance with regard to fund raising.

In addition, it needs to be acknowledged that this is not additional funding for local authorities. As the Minister said, he has cut local authority general purpose grants by almost 10% in this year's allocation compared to the allocation for 2008. The Bill is really trying to fill the gap caused by huge deficits in local authority budgets and we are not sure it will succeed because we do not know the full amount of income that will be yielded from this source. Many issues remain to be examined in the coming months and years to ensure local authorities are properly funded. The Bill will not answer all the questions, although it will go some way towards doing that.

With regard to administration, most of the Opposition amendments which will be discussed later focus on the administration and collection of these charges by local authorities, which are already overstretched with regard to their mandate to carry out many obligations under the various Local Government Acts. Local authorities are pressed in their effort to deliver services on the ground and this is an additional workload we are asking them to take on. I am not sure if the means by which local authorities will collect this charge has been fully thought out. While the Minister stated that an online system will be used and an effort will be made to centralise the collection system, enforcement and the administration of the system will require resources.

Fine Gael makes the reasonable request that the Minister consider a role for the Revenue Commissioners in the collection of this charge as they have the best resources and ICT systems to analyse and ensure its full and proper collection. It is a new area for local authorities to step into. I understand they are involved in the motor tax system but this system is quite different and, as it concerns property ownership and the many legal issues around that, it is more complex. Fine Gael believes the Revenue Commissioners could play a greater role in regard to the collection system, although we will come back to this point at a later stage.

We also have concerns with regard to exemptions. For example, the HSE might have contracted with private landlords for emergency accommodation or otherwise, or local authorities might have contracted accommodation through the rental accommodation scheme. If my understanding is correct, these accommodations are exempt although they are similar. The question that arises is what is deemed to be the difference between one house which is in the RAS and another on the opposite terrace. Although it is the same type of house with the same builder, one house will be charged while the house in the RAS will not be charged. We need clarification on this because, if it is the case, it seems quite unfair that just because a private landlord enters a contract with a local authority for long-term accommodation, he should be exempted while a person living across the road is not.

I referred briefly to the implications for local authority resources. The motor tax system is working very well, which I have always acknowledged in the House. It is an excellent system that should be expanded to more areas if at all possible. In this case, the Minister is proposing such an expansion but I have some concerns. The Minister referred to the Private Residential Tenancies Board, which gives rise to a serious issue. The PRTB was before the joint committee yesterday and we heard horrifying evidence of how its business operates. It seems to be one of the main planks of information and data exchange that the Minister is depending on for this scheme but, if that is what it is, I assure the Minister it is a very shaky and vulnerable plank.

Did the Minister know there is over €10 million sitting in the bank accounts of the PRTB that has not yet transferred to local authorities, to which it should have transferred long ago to assist them in inspections and enforcement? The PRTB claims this is not its fault and that it is carrying out the registrations and collecting the money. When questioned by Opposition committee members, it quite squarely blamed the Department and the Minister. It was claimed that the local authorities are not drawing down this money and that there is a role for the Department and the Minister in ensuring this will happen. For every registration of private rented accommodation, €70 is collected. Four sevenths of this is retained by the PRTB and three sevenths is meant to go to local authorities. In the current economic climate, it is a disgrace if €10 million is sitting in a bank account of a State body that has not been moved to where it should have gone. I draw the Minister's attention to this issue.

With regard to ICT systems, the PRTB is dealing with all registrations manually. It is all hard paperwork because, the board claims, legislation does not allow it to use an online system similar to the motor tax system. This means it must employ more than the core 40 staff. It employes a further 25 agency staff to manually input every registration of a private accommodation and the system has resulted in a significant backlog. There is no information technology system to manage the registration database or to case manage all the registrations and this is causing significant backlogs and disarray in the board.

Dispute resolution takes between 12 to 18 months but in its corporate plan the board set down a target of between five and six months for dealing with disputes. This is totally inefficient and unacceptable and any reasonable person would agree with me. It is taking almost three times longer than it should to deal with disputes related to private rented accommodation, largely due to inefficiencies and excessive bureaucracy within the structure. I was informed that adjudicators in disputed cases are paid more than €600 per day, which is amazing. Up to now they have been dealing only with one case per day but now they are being asked to deal with more than three cases per day. A sum of €600 per day paid by the Private Residential Tenancies Board, PRTB, is a very good payment for any individual for the completion of such work. There is no on-line payment system or IT system within the PRTB and I am unsure how the Minister intends to share data with the board as set out in the Bill. The board is struggling to deal manually with much of the workload as it stands. A great deal of attention is required in this area.

The Minister referred to data sharing between the Revenue Commissioners and the Department of Social and Family Affairs, especially the sharing of personal public service numbers. The Oireachtas Joint Committee on the Environment, Heritage and Local Government, of which I am a member, examined the idea of sharing PPSNs as part of an effort to update the electoral registration system. There are issues with the Data Protection Act and sharing certain personal information. Clarification is required in this area if the Minister expects to acquire information from those Departments for the purposes of this Bill. This could be a problem which the Minister and his officials have not foreseen.

The Minister also referred to the ESB and electricity usage. I worked in the ESB and there are data protection issues with regard to any information on accounts or usage it issues to any third party. This is also an issue and it would not only involve the ESB. There are several other suppliers in the electricity industry, including Bord Gáis Éireann, Airtricity and many others, but they are not mentioned anywhere in the Bill. Such organisations keep account of electricity supply issues. While the principle of data sharing contained in the Bill is good, the matter has not been fully thought out. The PRTB is a disaster at present yet it is one of the main planks of the Bill with regard to sharing information and support for local authorities in this area.

I refer to the implications on the tourism industry. Fine Gael welcomes that this charge will not be applied to mobile homes. However, there are many areas where there are holiday homes owned by small businesses or tourism companies. Such firms have considerable concerns because they already pay rates to local authorities for these homes and they will now be asked to pay an additional charge of €200 per home. These homes are not owned by individuals but by small tourism companies. If the charge were levied the companies would pass it on to the holidaymaker, automatically increasing the cost of holidaying in Ireland. This has negative implications for tourism in Ireland. We are trying to promote holidaying at home and to create incentives for people to holiday in Ireland. The Minister should examine this area and he may be able to clarify the matter later.

Another area requiring clarification relates to exemptions. If a person owns a house and provides it to his or her parent, it can attract mortgage interest relief because there is no revenue income from such a house. By the same principle is it not reasonable to call for such a house to qualify for an exemption to the charge as well? The Revenue may grant mortgage interest relief if it can be demonstrated with evidence that a son or daughter provides a house for a parent from which there is no rental income. This is part of the reason the Revenue Commissioners provides a better collection system. It is reasonable to request that such houses would not be subject to the charge also and I seek clarification on this matter.

The Minister called for the views of Senators with regard to whether councillors or local elected representatives should determine the charge within certain limits. I would welcome such a measure because we must give autonomy to local authorities and real power to elected local representatives. We have recently emerged from local elections in which excellent councillors have been elected throughout the country. They have the ability and capability to run their local authorities if the correct funding is provided. The Minister could allocate power to set the charge in this area and I welcome any further moves to give more autonomy to local elected representatives.

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