Paul Bradford (Fine Gael)

I thank my colleague for sharing time. I welcome the opportunity to comment on the Bill. The legislation is like a little trip switch because it allows us, if the Cathaoirleach will excuse the pun, to shed light on the broader local government debate and the issues facing local government.

In 1999, a constitutional amendment was passed to provide constitutional recognition of local government. It seemed like a major step forward at the time, but lip service has been paid to local government since. That has been the case for the past 30 years or so since the 1977 political decision to remove rates from domestic properties. In a sense, all political parties have failed to bell the cat in terms of local government reform and funding.

The Bill is viewed as a positive step. According to the Minister, it will broaden local authorities' revenue base. He stated: "This is the first time in more than 30 years that a new source of local funding has been made available to local authorities." As I told the Minister, this is probably incorrect as a decision was made four or five years ago whereby development charges on individual house constructions in rural and urban areas would be directly paid to local government. It was the first significant source of funding. Unfortunately, as soon as this type of funding was introduced, the Government cut back significantly on the grant for local authorities. It robbed Peter to pay Paul. If we are all fair - as Senators, we have close contact with local government - we must recognise the reality that new sources of funding are urgently required to provide for the future development and expansion of local government.

A fee of €200 per house cannot be sensibly opposed, but the question is for how long will the fee be at that level as all sorts of hard cases and exemptions will be sought. In principle, a tiny property tax is being introduced via the back door. The broader debate that is required on the issue of property tax might stem from the Commission on Taxation's report. I welcome the fee in so far as it will give some funding to local government and as long as we are guaranteed that it will be additional funding and that this direct injection of €40 million or €50 million will not be met by a reduction in the Government grant.

In the short time available to me, I express my interest in the Minister's statement regarding a directly elected mayor for Dublin. He seems to view the project as his personal input into the direction that local government will take. Where directly elected mayors are concerned, there are pluses and minuses. That the mayor of any town or city would have the appropriate powers and funding is of most importance. We must wait to see what the Minister will do in respect of the powers of Dublin's directly elected mayor before casting our final judgment. Where Dublin will lead, the other cities and larger counties will be expected to follow.

If we want real local government, it will need new powers, including the power to raise revenue and set local taxes. This is a difficult debate, but it must be tackled. The Bill opens a small door for us in that regard. I look forward to Committee Stage as a few issues must be teased out. In so far as the Bill gives local authorities some income discretion, it is welcome. From the largest county to the smallest town, every local authority is in grave financial crisis. They need new sources of financial input and the Bill may provide one. Some weeks ago, hotel bed taxes were mentioned in the Chamber. These seem to be the norm in a number of European countries. All this will serve to provide a broad agenda for future discussion. I have no fundamental issue with the Bill, but we will ask questions on Committee Stage and later regarding the funding of local government.