Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

The Minister for Finance responded to the industry's concerns and to calls in this House for a change. It is worth saying that issues discussed on the Adjournment are picked up on and ideas, such as the 2013 -1 and 2013 - 2 classification, can be transposed into legislation. I just wanted to put that on the record.

Section 63, in addition to providing for necessary amendments to vehicle classification, also provides for the changes in VRT rates for new vehicles announced in the budget. It is anticipated that the proposed increase will raise some ¤50 million for the Exchequer over a full year. The decline in new car sales combined with increased competition in car prices and consumer moves towards buying cheaper and cleaner cars has resulted in a fall in VRT yields from ¤1.4 billion in 2007 to less than ¤400 million in 2010. That is a fall of ¤1 billion over a three year period.

That trend has continued in 2011 and 2012. The changes announced in budget 2013 arise from a public consultation process to review bands and rate structures in line with technological advances in motor vehicles. In the course of the process my Department reviewed 34 submissions received from the motor industry and others and conducted several follow-up meetings to investigate further some of these proposals. The public consultation formed the basis of a wide-ranging discussion with the industry. The revised structure announced in the budget continues to retain a positive incentive to purchase low CO2 emitting cars. The point was made by the Minister for Finance, Deputy Noonan, elsewhere that people who buy substantial high-end cars, albeit with new emissions technology, are paying little if any road tax at while the rest of us are driving cars that are six, seven, eight or nine years old. There has been an attempt to rebalance this in terms of the proposals we have set out. The amounts involved, some ¤50 million, are not insignificant. That is the rationale behind section 63.