Fergus O'Dowd (Louth, Fine Gael) | Oireachtas source

I thank all the Senators for their contributions. As we are taking Committee and Remaining Stages today, I will not delay the House. Many of the points made make sense in their own right. When we examine what we have to do as a country and how we have to fund the road network and local government we have no choice but to do what we did in the budget. The key point is the relationship between car emissions and the tax to be paid. The lower the motor vehicle emissions, the less motor tax one pays. Notwithstanding that, motor taxation has increased for everybody. At the heart of what we are doing is ensuring the environmental benefit will continue. The reason for the increase is that more people are driving more environmentally friendly cars and the tax base was going down. If that was to continue for the next 15 years, we would lose at least ¤0.5 billion and there would be no sustainability in terms of road repairs and safety issues.

The last point made was in regard safety for young people. While it is a fact that young people suffer greatly as a result of the accidents in which they have been involved, I agree with Senator Noone that we have to deal with the safety issue. The Department and the Oireachtas work with the Road Safety Authority to ensure roads are safer and that young people, in particular, are educated and understand what happens as a result of irresponsible driving. The number of roads deaths has decreased significantly in recent years. During the period when I was the Opposition spokesman on transport, I recall Noel Dempsey, former Minister for the Environment, Community and Local Government, saying that the Road Safety Authority message works.

The agency is brilliant at getting its message across and has total credibility. May it go from strength to strength in that regard.

Senator Mooney raised the issue of climate change. The heads of a climate action and low carbon development Bill were published in February 2013 for consideration by the Oireachtas Joint Committee on Environment, Culture and the Gaeltacht. As part of the response to meeting our climate change obligations, the NESC secretariat was asked to look at the longer-term agenda and to focus on developing a basis for a socioeconomic vision to underpin an effective national transition to a low carbon future by 2050. The final report of the secretariat was released on 26 February for consideration by the joint committee. The committee is dealing with that report and is the main forum within the Oireachtas for dealing with climate change issues.

The question was asked as to why the motor tax increases for CO2 emissions vehicles are higher. While the level of increases for the lower CO2 bands in the last two budgets have been higher in percentage terms than for the rest of the fleet, they must be viewed against a structure that left the bottom rates very low. Even after the two budgetary increases, the average payment for owners of vehicles taxed on the basis of their CO2 emissions is ¤315 per annum which is significantly lower than the average of ¤511 for owners of pre-2008 cars. It must also be remembered that while the introduction of the CO2 bands was designed to encourage a switch to lower emission vehicles, the changes were also introduced on the second principle of revenue neutrality, which has not happened. As I said earlier, there has been a significant loss of motor tax income in recent years, which is why we had to increase the tax rates. Motor tax revenue receipts dropped from ¤1.6 billion in 2008 to ¤1.1 billion in 2011. Had that trend continued, receipts this year would have been in the order of ¤954 million. That level of income would make it impossible for us to provide what is needed.

Motor manufacturers are meeting the climate change challenge by developing cars with even lower emissions, and long may that continue. Senator Landy asked about the increase in the G band, which went up from ¤2258 to ¤2350. While this is the lowest increase in percentage terms, at 4.1%, it amounts to ¤92, which is the highest amount of money in any band.

Senator Norris has a most unusual car and I wish him well in it. However, with a 3.1 litre engine, I suggest he may be driving a jet engine rather than a car. I commend him on keeping it on the road. The Senator, and others like him who can keep Jaguars firing on all cylinders, deserve a zero rate of motor tax. The fact remains that we need the money. Everyone knows that if we do not take in the requisite income, we cannot sustain our local government services. One of the key policies underlining the changes being introduced by the Minister for the Environment, Community and Local Government, Deputy Phil Hogan is that local government councillors will be responsible for the management of the local budget. The new property tax will also feed into local budgets and there will be an agenda, locally, to ensure greater efficiencies and reductions in costs. I hope those changes will be very constructive.

Sinn Féin representatives raised the issue of a three-pronged approach to taxation. We already tax on the basis of the emissions of vehicles but if we add size and value as parameters, that will not necessarily improve the environmental performance of the motor tax system. We have moved away from the size of vehicle basis used prior to 2008 because it did not produce any environmental gain. I do not know how price could be used as an environmental parameter. The current system is simple, very clear and effective and is reducing emissions. In that context, it is working.

I think I have addressed most of the points raised. If Senators wish to raise further issues, we can deal with them on Committee Stage. I know Senator Barrett is concerned about a specific issue, which we will deal with later. I thank all of the Senators for their contributions and the thought-provoking issues they raised.