Fergus O'Dowd (Louth, Fine Gael)

I am happy to respond to the Senator. Those who own their own homes but cannot pay the mortgage and are getting assistance under the definition of poverty of an exceptional need as used by a community welfare officer will not pay the charge. People living in housing estates which do not have the proper infrastructure, as defined under categories 3 and 4, will not pay the charge. Therefore, there are clear and significant exceptions under which people who, by any recognised measure, are living in poverty will be excluded. Such people will not have to pay this charge.

Senator Norris spoke about moving the debate forward. Although it is not referenced in these amendments, I draw Members' attention to section 12, subsection (1) of which states:

All household charges, late payment fees and late payment interest payable to a local authority pursuant to this Act are placed under the care and management of the local authority concerned.

In other words, local authorities will have the power to remit some or all of the charge in what they deem to be exceptional circumstances.

What this proposal is all about, and what the budget is all about, is keeping this country free of absolute and abject poverty. If we did not have the funding from the EU and IMF to meet the shortfall in our income, that is what we would be facing. Sinn Féin can talk about people earning less than €75,000 being exempted from the charge, but the reality is that if we do not have the money to run this country, if the €18 billion shortfall is not made up, everybody will be in an extremely difficult place. Without that funding, our schools, hospitals and local authorities will be unable to function.

It is important to bear in mind that this charge is ring-fenced for local authorities and is not going into the general Exchequer. The moneys collected will allow local authorities to provide services locally, such as maintaining footpaths and street lighting and fixing potholes. It is about maintaining local infrastructure. It is about allowing local authorities to continue to provide services to designated areas of low income and significant deprivation under the RAPID programme. These moneys will be used specifically to meet those requirements.

The EU-IMF programme of financial support for Ireland commits the Government to the introduction of a property tax in 2012. The programme reflects the need, in the context of the State's overall position, to put the funding of locally-delivered services on a sound financial footing, improve accountability and better align the costs of providing services with the demand for such services. The drop in State income since 2006 has been in the order of €16 billion. We are spending €18 billion more per annum than we are receiving in taxes. As such, we are in an extremely serious financial place which will require us to take billions out of the economy again next year and for several years thereafter. That is the reality we are facing and the context in which this debate is taking place.

In light of the complex issues involved, a property tax requires a comprehensive property valuation system, which would take time to introduce. Accordingly, to meet the requirements of the EU-IMF programme, the Government is introducing a household charge as an interim measure. The charge is being set at the relatively modest level of €100 for 2012. To mitigate the impact on home owners, the Bill provides that payment of the charge may be effected by four instalments over the course of a year. In addition, provision is made for several exemptions and waivers, which I outlined in detail on Second Stage and again today.

A full property tax will be put in place by the Government in due course. A more detailed examination and consideration of the issues involved, including those raised by Senators today, and the potential impacts on different household tenures and employment circumstances will have to take place in advance of its introduction. In this regard, my colleague, the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, will establish an expert interdepartmental group early in the new year tasked with designing a property tax which is equitable and is informed by previous work in the area. The group will be asked to consider options for the property tax, including assessment criteria, applicability of exemptions and waivers and how the tax should be paid and collected. The group will be assisted in the completion of its work by the Departments of Finance, Public Expenditure and Reform, and the Environment, Community and Local Government. The group will be required to complete its work and make recommendations to the Minister for the Environment, Community and Local Government by mid-2012. Following consideration of its recommendations, the Minister will bring proposals to Government on a full property tax as soon as possible.

Regarding the proposal by the Senator to delay the implementation of the charge until 2013, the EU-IMF programme of financial support commits the Government, as I said, to the introduction of a property tax next year. Accordingly, the household charge will be applied next year as an interim measure. As announced on Monday by the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, the Exchequer contribution to the local government fund will cease this year and will be replaced by the proceeds of the household charge in 2012. As such, it is imperative that the charge is implemented in order to ensure the funding of locally delivered services is continued on a sound financial footing. This will ensure local authorities are appropriately resourced to deliver the wide range of service which the public needs and expects. In these circumstances, I cannot agree to the Senator's proposal that implementation of the charge be delayed until 2013.