Denis Landy (Labour) | Oireachtas source

I welcome the Minister of State to the House and I apologise for being late, although I heard most of his speech outside the Chamber.

I broadly welcome the legislation. It is long overdue. I would have liked it to go a little further and to have seen some correlation between the profit a business is making and the rates it pays. The Minister of State might respond that commercial ratepayers would say that, now that we are in a recession. Did I say the same thing during the boom? I probably did not, but I am reflecting what is being said by small business people. I come from rural Ireland and I deal, in the main, with small businesses in my own area. One evening last week, I was in a small shop and the shopkeeper told me that what was in the till would not pay for the heat and light for the day. Many small retailers in rural Ireland are simply trying to keep their doors open, hoping things will turn a corner. In some cases, rates are 20% of baseline costs, which is a massive amount. For all the explaining politicians like myself might do, small business people do not accept that they should be paying such an amount of money into the local government system.

I welcome the Bill although I have some queries on it. As we go through the Bill, I hope the Minister will look at some more imaginative proposals. In my own town of Carrick-on-Suir, we introduced a system of giving a business rates holiday to new businesses that did not cause displacement of existing businesses. The holiday was for a five-year period on a sliding scale. In the first year a business paid no rates and then paid an extra 25% until it was liable for full rates after five years. That scheme has worked well and has encouraged the filling of small retail outlets in the town and we have seen the main street fill up again. Something like that could be considered at this point. The scheme represented a lack of opportunity to raise more money, but not an actual cost. The Minister might consider such an idea when we go through the legislation on Committee Stage.

I welcome section 6, where it is proposed that some of this work will be contracted out. The last time I checked with the Valuation Office, when I was a local councillor and frustrated by people's lack of response from it, there were 13 staff in the office. I believe it has increased since then. Even with a massive increase in staff it cannot be possible for the office to deal with valuations for the entire country. The idea of contracting the work out is a good one.

The Bill contains a proposal to introduce self assessment. Earlier today, I rang an official who deals with this matter every day, to get his view on self-assessment. His initial reaction was that all self-assessments would be on the low side. What is the Minister of State's view of this? When we allow people to self-assess, as in other tax areas, we do not always achieve the best outcome.

My colleague, Senator Sheahan, has expressed concern about the appeals system. I welcome the fact that it has been ratcheted up somewhat and that it kicks in as soon as a valuation is done and before the rate has been put on the building. That is important. There have been cases where the rate is applied and there is then a long process of trying to have it changed.

I also welcome the provision for gaining access to a building where the business owner is not co-operating with the Valuation Office. An owner can avoid paying rates on a premises by putting up a "For Sale" or "For Rent" sign and notifying the local authority that he or she is no longer trading at the premises. The owner can then turn the lights off downstairs and continue the business upstairs. This is happening across the country. This loophole needs to be closed because it is disgraceful. I know of many businesses who see their competitors behaving in this way. A certain profession is taking advantage of this loophole but I will impart that knowledge to the Minister of State privately later. This is unfair to other business people. As the Minister of State said, every time someone avoids paying rates they are increased for others in the town or city. I agree totally with that view.

There are often delays in rating a premises. I know of a business premises in my own area where I had the honour of cutting the ribbon when it opened, and six years later the rates office had not even visited it. The person concerned has since retired, so I can tell the story. Those premises were rate free for six years. The current system has no provision for retrospection and I see no such provision in the Bill. If there is, I hope the Minister of State will correct me. I am looking for fairness across the board with existing businesses. A person who has not been rated has a competitive advantage over other people and is trading unfairly.

How is it proposed to contract in staff to get the first round of this valuation done? Senator Sheahan said it could take ten years, at the rate we are going. I would not be so pessimistic. I hope the Minister of State can give me some answers on this matter.

I have other questions that I will ask on the next Stage of the Bill.