Paschal Mooney (Fianna Fail)

I welcome the Minister to the House. This seems to be a catch-all Bill. It will apply to vintage cars and includes an amended definition of motor caravans. It seems to be yet another example of the Government scrounging around and trying to find extra money wherever it can. There is, in this instance, a breach of trust, not only with the motor industry but, more importantly, with motorists who purchased environmentally friendly cars since 2008. The financial incentives put in place at that time were, I am the first to admit, part of Green Party policy in the programme for Government. They were an attempt to reduce CO2 emissions as part of Ireland's policy, which I am sure is continued by the current Government, of reducing carbon emissions and the threat to our environment, particularly coming from fossil fuel consumption.

It was in that context that these measures were introduced. The measures were controversial at the time and the motor industry did not, exactly, embrace them because they saw that trade-in values would go down and that sales patterns would be disrupted. It is interesting that, four years later, we are yet again making changes while the Society of the Irish Motor Industry, SIMI, is screaming blue murder about them.

In a pre-budget submission, SIMI made references to the Government proposals which were being leaked widely at the time. It made it clear that it did not want to see any major change to the road tax band structure that would destabilise the market. It seems that unlike a lot of other industries or those in the services sector, that the Irish motor industry requires a lead-in time in order to prepare for a sales period which is very short in duration - it lasts from January to April, which again somewhat surprises me - but I suppose it is because it involves new registration numbers. The sums involved are enormous. They make the point that it is becomingly increasingly risky for the industry, as vehicle manufacturers must pre-order €500 million worth of new cars for a very short selling period that is virtually over by April and that seasonality is a high risk also for the Exchequer as a bad start to the year means that lost revenue will be irrecoverable until a year later.

The Minister has outlined the changes in that there will be further increases on an already hard put-upon sector, namely, the Irish motorist. Fuel prices have increased significantly. I appreciate that is not within the remit of the Government. It can do nothing about it. In fact, the one hope is that if the dollar were not to prove strong or the euro were to recover to some degree tperhaps fuel prices would reduce, but there does not seem any likelihood of that in the short to medium term. It appears that prices are only pointing upwards. Perhaps if there were a little more stability in the Middle East it might help to reduce fears about the supply.

While this is the first increase in motor tax since 2008, it is one that is questionable and controversial. The State expects it to yield an additional €46.5 million but the choice of buying clean and green vehicles has been hit with fees of €56 and €69. While I appreciate that the Government must find money wherever it can, we believe it is a regressive move that cannot be defended on purely revenue-based grounds because it is targeting environmentally-friendly cars. The decision to incentivise low CO2 emission vehicles has been having a real impact on this country's efforts to contribute to tackling climate change. A total of 88% of new vehicles in 2008 were purchased in the A to C bands as motorists responded to the incentives, switching from high emission cars to low CO2 emission vehicles. The switch occurred as a result of the financial incentives provided and the Government is now jeopardising that progress. It would be interesting to know once the tax increase is introduced that the Government will monitor whether what was said about the tax inside and outside the House will come to pass. The connection between the rate of tax one pays and the CO2 emissions from one's car was at the heart of the introduction of the CO2-based bands in 2002. It ensured that a link existed in the motorist's mind and, most importantly, his or her wallet, between driving an environmentally-friendly car and paying a low motor tax rate. The Bill erodes that connection. It downgrades the importance of environmentally sound practices at the heart of broader public policy.

The Minister who is primarily responsible for policy in this area might reassure people that in going for this tax grab, it is on the one hand going to, questionably, increase the public purse by a certain amount, which is also questionable in light of the struggles currently experienced by the motor industry, but he must also balance that against another part of the Government's policy, namely, to be more environmentally aware and to achieve the international targets to which we have signed up. The continuing use of fossil fuels is not in the best interests of everybody. I appreciate that people say this country's contribution, or lack of it, to improving world climate change is somewhat insignificant but if every other small country were to adopt the position we are now adopting then the cumulative effect would have an adverse impact on improving the reduction in CO2 rates.