Malcolm Byrne (Fianna Fail) | Oireachtas source

I thank the Minister of State for taking this Commencement matter. The model of commercial rates that we operate in this country can be traced back to legislation dating from 1826, the time of King George IV. At that time, income tax was not even in place. Income tax had been introduced as a temporary measure during the Napoleonic Wars but it did not come back into Britain and Ireland in any real way until the 1840s. Essentially the model that was introduced in Ireland in the 1820s and 1830s as a way of funding local government has not really changed. We still operate the same commercial rates model under which local government is funded based on the size of the shop floor. It is calculated in two ways and the only way that can be changed is when the Valuation Office carries out a revaluation, which happens periodically, or the local authority decides to change the multiplier.

That system was fine in the 1800s but we are in a very different era now. We have moved to a situation where e-commerce now accounts for 50% of all card spending in this country. The pandemic has accelerated the use of credit and debit cards for transactions. What I am asking for here is a level playing field. If we want to ensure that our main street and high street shops, which are also supporting local community activities, survive and if we want to continue to support that retail experience, we must develop a fairer system of funding local government. It is not fair, for instance, that bookshops, of which there are approximately 230 all over the country, are paying commercial rates to their local authority while the largest bookseller in Ireland, Amazon, does not pay commercial rates and will not do so until it opens a warehouse here. This is a question of ensuring a level playing field.

Commercial rates are an important element of funding for local government. Approximately €1 in every €3 contributed towards local government comes from commercial rates, exceeding €1.5 billion every year. Regardless of what new system we put in place, we must continue to fund local government properly and I passionately believe in doing that. During the period of the pandemic the Government has been very good in providing business supports, particularly through commercial rates waivers. However, we are now in a new world where transactions are increasingly being carried out over phones and tablets. That is great in that it gives us a lot more freedom but if we are going to encourage urban renewal and town regeneration, in which the Minister of State is a passionate believer, then we must ensure that those businesses that are offering the main street and high street experience are competing on a level playing field. The model that we have at present does not allow for that. The booksellers are the classic example. They contribute to their communities by sponsoring local sports clubs, arts groups, Tidy Towns committees and so on but they are also subject to commercial rates. We do not see Amazon's logo emblazoned across the jerseys of local soccer or GAA teams. As we emerge from this pandemic and place a greater emphasis on urban regeneration, I ask that we give a fair deal to those small retailers and consider proper local government funding and reform of the commercial rates model.