Sean Barrett (Independent) | Oireachtas source

I welcome the Minister of State to the House and the Bill she has brought before us. The judgment was that articulated goods vehicles fall to be taxed at the non-agricultural tractor rate of €333 annually. That might have been how our learned lordships interpreted the law, but the economics of it are that articulated vehicles use lots of roads. They have a high PCU value, whereby one translates the value of a truck into the equivalent number of cars.The laden weight of a truck accounts for all of the non-weather maintenance costs of a motorway. If a motorway were used only by cars, no maintenance would be needed. There is a rational economic case to be made that these trucks should be taxed on foot of these factors.

The explanatory memorandum which the Minister of State has circulated states that according to the judgment there is no statutory basis for the practice of weighing a vehicle with a trailer. The economic basis is that the weight of the vehicle and trailer is what we must reimburse in our roads budget. This should include the weight of the truck and the weight of the load. There are weighbridges outside most large factories in the country. Regardless of whether there is a statutory basis, people want to know the weight of what goes into the factory and the weight of what comes out. This has a very sound basis in economics. We need to relate this, in turn, to the number of vehicles in use.

The so-called juggernaut problem is redefined, as the number of axles a vehicle has can make a substantial difference to its track cost. A relatively small vehicle with a small number of axles could be doing quite a lot of damage while a large vehicle with a much larger number of axles could be doing relatively little damage. This must be scientifically worked out. Undoubtedly, what is on the trailer contributes to the road track cost with regard to the PCU value to which I referred and the infrastructure cost. When the trailer is laden this is also part of the bill.

What is being attempted here is correct. Not that we foresaw what would be the result of the court case but we brought to the attention of the former Minister of State, Deputy O'Dowd, that changing the basis of the taxation of heavy goods vehicles should have been on the cards for a while. This is because the issue is not the unladen weight of the vehicle - which has been traditionally used as the basis for the taxation of heavy goods vehicles - but the laden weight per axle and this includes, as the Minister of State said, any trailers. We cannot allow these to go free or to be taxed at a low rate.

The timing is paradoxical, because on the night of the budget when the reductions were announced, many people in the haulage industry were very pleased with what had happened. In restating it in the Bill, the Minister of State will surely have their support. They were very pleased that the gap between their vehicles and vehicles from Northern Ireland was closed by what was done in the budget. Section 4(2) provides for those rates as announced in the budget and this will be welcome.

The Minister of State said the practice of weighing an articulated vehicle with the heaviest unladen trailer was not adequately provided for in law. It is part of the cost and it is very sensible. We want to reward vehicles which do not damage the highway and charge people for the highway cost of having them on those routes. It is important to do this.

We are building up a haulage industry. As the Minister of State said, it was at a disadvantage compared to the Northern Ireland hauliers. Firms which decide not to use hauliers also bear these costs. What the Government is trying to do via the budget would improve the competitiveness of every company in the country because companies would get a better deal either in respect of their in-house fleets or from the people they hire. This is why the measure has been warmly welcomed.

The Minister of State also said later sections in the Bill will provide for semi-trailers, which are the drawn components of articulated trucks and trailers, to be included as additions. They add to the cost because of the space they take up and the impact they have on the infrastructure.

I will read through the Bill before Committee Stage but, as matters stand, I am of the view it is the correct response to the High Court decision.It was correct to implement the budget decision, which was widely welcomed at the time. With the case against the proposed scheme coming soon after the Legislature had gone out of its way to help the sector, it might have been felt that there is no gratitude for doing the right thing in public life. This remedies the issue and it will be welcomed. I compliment the Minister of State on the Bill.