Tom Shehan (Fine Gael) | Oireachtas source

I welcome the Minister of State to the House. As one of the more vocal Members on the rates issue, I got excited when I saw this Bill. Nevertheless, I am disappointed. All is not lost, as amendments could be worked through with the Minister, but we could have been more imaginative. I look at business every day and there are people who struggle while others may be working out of a small two-room premises. Some professionals may pay small rates while other businesses may include a supermarket with 4,500 sq. ft. or 5,000 sq. ft., which could employ 25 or 30 people and have a turnover of ¤2 million. A professional with two staff may turn over ¤2 million from two rooms. Rates are in no way linked to profitability but we should be more imaginative and there should be a link between profitability and the amount paid in rates. The rates for the supermarket in my example would be significant and, on the other hand, a small business with the same turnover could have greater profits but minimal rates. We must examine the issue. We have an opportunity with this Bill but we could be more imaginative about it.

This process began in 2005 and the projected end date will be 2018. Provisions are being made for outsourcing, etc., which is welcome. Self-assessment, however, will only be done in one pilot area.

If that was expanded, this job could be finished prior to 2018. We should remember that in 2005 when all Dublin properties were being revalued, property prices were at their ceiling. For the purpose of clarity, I point out that rates are calculated on the basis of the square footage of the property plus the best achievable rent. Rents in some areas are 40% of what they were in the 2005 to 2009 period. A businessman who opened a new business told me yesterday that he is paying 40% of the rent the previous occupier, whose business went to the wall, paid on the property, yet this man is paying the same rates. Where is the calculation of his rates falling down? It is provided that the calculation of rates is to be based on the best achievable rent of a property and rents have dropped by 50% and 60%, yet rates remain the same. That does not add up.

My colleague Senator Byrne referred to the section amending section 48 of the Principal Act regarding the powers that will be given to the commissioner. There is concern about that provision, which needs to be more specific. The word "unconstitutional" has been used in this context and I understand negotiations are taking place on it. There is fear about this among certain sectors of the business community. The commissioner will be given the almighty power to estimate the value of a property. The provision states that the value of a property shall be estimated "in the manner the Commissioner considers appropriate". Therefore, the commissioner will be judge and jury.

The Minister of State mentioned the appeals system. The High Court route is not an option for business people. It might be for the Minister for Finance when we hear all the property previously held by him is being taken away from him, but for business people the appeals process and the High Court route are not an option. I question whether the removal of an element of the appeals structure to which people have access is wise, advisable and necessary.

Senator Byrne raised the issue of inability to pay rates, but I would consider this from the profitability side. To be blunt, if a person is unable to pay his or her rates, how can that person remain in business?