Caít Keane (Fine Gael) | Oireachtas source

When we came up with negative proposals on the county council, that is, where to make cuts, we were asked from what programmes that money would be taken. In pure monetary terms, cars with greater emissions will continue to be more highly taxed. Eco-friendly cars saw an unwelcome tax increase of ¤92, but the owners of cars with lower or no emissions will see their tax bills decrease again. The emission-free cars bought since 2008 or the electric cars bought prior to that will see their tax bills decrease by almost one quarter to a flat rate of ¤120 per year. We must encourage the use of electric cars. I have raised this matter with the Minister for Transport, Tourism and Sport. We must engage with it further.

As less tax will need to be paid on environmentally friendly cars, people will be encouraged to buy cars with smaller engines that produce less carbon. We have done what was necessary. Many countries that have rolled out the new electric car technology have introduced incentives. We use some, but not all, of those. A greater uptake of charging points around the country is required. We could also offer free parking for electric cars. They are not ideal for all long journeys, but we should encourage them for city commuting, where most CO2 is produced from transport. Also possible are financial incentives at the point of sale and education campaigns so that people can understand the benefits of owning electric cars.

The Government has made available alternatives to travelling to work by car. For example, people can avail of rail or bus taxsaver commuter tickets, which were established as an incentive to use public transport. I will not go into the details, but it makes savings for people who use Luas, DART, Dublin Bus and Bus Éireann services. It incentivises people to switch to public transport and reduce traffic congestion. Car pooling is another measure. It should be extended throughout the public service, including Leinster House. Savings arise because tickets are not subject to tax or PRSI, in that employees are only required to pay tax or PRSI on the money portion of their salaries. The Leap card introduced by the Minister, Deputy Varadkar, is another incentive.

One must consider the balance when introducing an incentive and whether CO2 can be reduced using other methods. Any increase in taxation is unwelcome. The last CO2-based system was introduced in 2008 and has led to a major decline in motor tax receipts. Although the previous Government's stated intention was to ensure that the switch would be revenue neutral, we found out that it actually incurred a significant cost. The tax base shrank by nearly 50%. From where will we get this money?

Technology is improving. As mandated by the EU, a greater proportion of cars are more efficient. This is welcome. A mechanism to drive further environmental improvements through taxation will not always be available, as the scope for results has tightened. However, European legislation constantly raises the bar in respect of CO2 emissions. This is only right. The engines currently being used by the motor industry across Europe are what are called Euro 5 engines. Vehicles in this category meet all CO2 limits set down by the EU, but most manufacturers have engines that comply with Euro 7 standards, which are Ireland's standards. They have lower emissions and more fuel efficient vehicles are surpassing the current levels required by the EU. Our cars are becoming more environmentally friendly.

Changes have been made and the A1 band has an 80g/km ceiling, but the Minister of State has addressed this point and I will say no more. We are refreshing the signal to the market that maximum ambition in reduction in emissions continues to be the aim. Despite the negative impact on the public finances, other methods of raising funds are available, for example, different forms of taxation. If a judgment was based on a vehicle's open market selling price, OMSP, the revenue would increase by ¤12 million in one year. However, this avenue has not been chosen. If every vehicle in the country made zero emissions, we could consider basing our tax rate on the OMSP. There is a great deal to be said for this approach.