Wednesday, 10 July 2019
Local Government Rates and Other Matters Bill 2018: Committee and Remaining Stages
-----we would have seen over the years. I do not disagree with her at all but there is a twofold answer. First, and I accept it is not uniformly exercised across the country, the provision for councils to take account of difficulty to pay is exercised by many local authorities. I gave a particular example of work done in Donegal where, in the teeth of the recession, a conscious effort was made by management and councillors to do exactly what the Senator said, namely, keep businesses open and have rates into the future rather than have large rates bills upfront.
The other aspect this legislation specifically deals with is the introduction of a staged payment process. As it stands, the two moiety system still exists on the Statute Book. In reality, local authorities will take money whenever they get it in most cases but this legislation allows for a payment plan to be agreed between the local authorities and the ratepayers. It goes back to what I said yesterday. Traditionally, almost everybody on the local authority was a ratepayer, whether they were paying domestic or commercial rates, or both. Following recent elections, however, there are far fewer commercial ratepayers on local authorities. As a result, a "them and us" attitude has built up where businesses sometimes feel that local authorities see them as a soft touch for collecting funds if there is a shortfall when it comes to the annual budget meeting.
What we are doing in this legislation is enabling local authorities to set up modern payment systems with businesses. To use the example of the traditional retailer on the high street, the period after Christmas is a slower period once the sales are over and one might not be paying any rates. One might have an agreement with the local authority not to pay any rates in February, March, April and May and then one pays commercial rates for the rest of the year. That is what the Bill is doing in terms of its provisions.
What is proposed in the amendment presents me with two impossible things I cannot accept. The first concerns the point made by Deputy Humphreys. We cannot have phased increases because that would be challenged, and successfully so, in the courts by any business paying more than it should lawfully have to pay. The other point was from Senator Coffey about making up the shortfall. I believe local authorities are being given the power in this legislation to make sensible decisions. It is being put on statute for the first time in terms of those payment schedules. I told Senator Craughwell that we will be circulating those to the local authorities following the enactment of the legislation.
To answer Senator Humphreys, there is a general regulation making power under section 18, which I spoke about in the Dáil debate. I believe that would cover some of the aspects of the amendment that I accept or at least believe would not be illegal, and might be able to be implemented. I believe the power exists under section 18 to make such a regulation.
I agree with Senator Murnane O'Connor that the local authorities are not a bank, nor are the ratepayers. What happened here in the Second Stage debate was interesting. A much broader discussion on funding local government has to take place. We have a situation where €1.5 billion annually comes from business to pay local authorities and many times businesses do not see where that money is being spent. We cannot strip that out because we will ruin the financial base of local authorities but there is a bigger picture. Should a local tax be levied in the future on those businesses doing online sales into Carlow or Kilkenny from other jurisdictions or other parts of the country? We have to consider online sales tax and such issues. I saw the Tánaiste and another commentator talking about the potential impact on online sales if a hard Brexit happens in that people would have to claim back from the Revenue Commissioners for returned products. I see that in my extended family where packages are coming in the post.People's lives are much busier and they might do their shopping online at home at night. They are able to return products freely to Britain at present but in the event of a hard Brexit that would not be the case. That might be a boon for the shops on the high street and might be one of the unforeseen positive consequences should a hard Brexit happen, not that I want to see it happen.
I understand what the Senators are trying to address, but there are two issues. One is the phased decreases and the other is the shortfall in funding and from where that shortfall could be met.