David Cullinane (Sinn Fein) | Oireachtas source

This is why I refer to Groundhog Day. The Senators opposite do not have to agree with me, but people are e-mailing us in their thousands, and I have a responsibility to articulate their concerns to the Minister. This is the section in which these concerns can be addressed. The Minister and other Senators may respond if they wish, but we should at least be allowed to make our point. I acknowledge that the Minister is willing to listen.

I am concerned that we are moving away from the notion of progressive taxation, whereby taxes are based on ability to pay. We are paying more tax than ever before, and the revenue from those taxes should be used to pay for basic services. The Government is introducing a raft of indirect taxes, which gives rise to the question of why we are moving away from the principle of progressive taxation based on income. Indirect taxation is disproportionately levied on people on low incomes and, as such, is regressive and a form of poll tax. The property tax is similarly regressive because it takes no account of ability to pay. Two of the Independent Senators tabled a good amendment which was ruled out of order. The amendment proposed that the charge would correspond to no more than 0.5% of household net income. I am against the charge in its totality, but at least that amendment attempted to take account of ability to pay. There is something fundamentally wrong with a multimillionaire paying exactly the same amount for water as someone on low pay or in receipt of social welfare. A recent OECD report ranked Ireland as the second worst country in the OECD for low pay. We know that many people are so trapped in low pay that they have no disposable income after putting in their week's work. This Bill requires them to pay for their water separately. Many of these families cannot afford another household bill. Senators Healy Eames and Ó Clochartaigh rehearsed some of the personal experiences outlined in e-mails they have received. I am sure every Senator can give examples, even from their own families, of people who have no more money to give and cannot afford to pay basic bills. Nobody in this House needs a lecture on poverty and inequality, because we all see these issues in our communities, our housing estates and our families. The problem is that we are not prepared to do anything about it. We refuse to tax wealth or to impose additional income taxes on those at the top, but we have introduced a number of indirect and regressive charges, the property tax being one. We were told that the property tax was to pay for local services and local authorities. No sooner was the property tax in place than we were asked to pay separately for water. People are being asked to pay property taxes and water charges in addition to paying income tax and paying separately for bin collection, health insurance and sending their children to third level education. There is a difference between progressive taxation and a regressive tax such as a water charge. This debate dominates Europe at present. The trend in European policy is liberalisation of public services and forcing people to pay regressively for services.

There was a huge public campaign of opposition not only to privatisation of water services but also to the charging regime introduced by the Government not long ago. The initial report from the Commission for Energy Regulation was accepted by the Government. An average family with two or three children was going to pay between €400 and €500. The Government was subsequently forced into a climbdown, with the result that it has come up with the most convoluted scheme for water charges that any of us could imagine due to the hames it made of this issue from day one. The proposed new charges are €260 for a family and €160 for someone who lives alone. People will have to apply through social welfare to get €100 back, thereby creating more bureaucracy. It will cost more money to administer that scheme.

In terms of overall tax, we are going to take in €90 million next year. We have not even factored in how much the administration will be. It is mad to say it is €260 and €160 but we will give €100 back through the back door, all because the Government made a complete hames of it. I agree with the other Senators that it should not be up to the Department of Social Protection to give back that €100. In fact, it should not be charged at all. People should not have to pay for their water. Given the fact that we are bringing in the charge, it certainly should not be the Department of Social Protection.