Denis Landy (Labour) | Oireachtas source

I wish to make one or two comments on rates. From my experience rates on premises do the rounds to some extent. When businesses are going well, the rate remains the same and is not proportionate to the profit of the business. At such a time the multiple of costs on the business are lower, and when businesses are going badly, the multiple and percentage of the overall costs of running the business increase because there is no correlation or proportionality between the two. That is one of the reasons progress has not been made in the area over many years.

The second reason for the lack of progress is what Senator Walsh described as the antiquated system for devising a rate on a building. There are obvious winners and losers. Some months ago when the Valuation Office visited Waterford city I was there with a colleague on a Saturday morning.

His head was nearly taken off his shoulders by businesspeople who had been affected by an upward rates review yet as we continued along the street he met another person who told him that he did a great job on the rates. The system is desperately imperfect. I know work is ongoing on the new rates valuation Bill but will the Minister comment on the need for some linkage between income and expenditure and revenue of a business to the cost of the rate? Should the rate vary depending on how well the business is doing or other wise? That is the first question.

Second, many discussions were held with the Minister prior to the Bill being drawn up, one of which was about the out-of-town supermarkets that got free parking as part of their planning permission and that were sucking the traffic out of town centres. People were shopping with their feet, so to speak, and the town centres were struggling. A number of Members suggested to the Minister that such premises should be required to pay an extra rate or tax; I believe it is called the Tesco tax in Northern Ireland or England. Does the Minister believe that is feasible? He will probably tell me that is an issue for the other legislation but I ask him to comment on it because it is all interlinked.

There is concern that harmonisation will mean upward harmonisation but in Waterford and, I believe, in Tipperary the Minister provided extra funding this year to ensure that is bedded down. In some cases it will be harmonisation, with the definition being a downward harmonisation. Does the Minister envisage that continuing and where does he see the slack being taken up if we do not continue to get a subsidisation every year from the Department? Does he believe the uplift in the economy will ensure that or will it be done through efficiencies within the local government system? When does he believe we can look forward to a trend towards downward harmonisation?