Seanad debates

Wednesday, 2 April 2003

Motor Vehicle (Duties and Licences) Bill 2003: Committee and Remaining Stages.

 

Section 1 agreed to.

NEW SECTION.

10:30 am

Photo of Joanna TuffyJoanna Tuffy (Labour)
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I move amendment No. 1:

In page 3, before section 2, to insert the following new section:

2.–In so far as additional payments are made to the Local Government Fund by virtue of this Act which, but for this Act, would not be made, such payments shall be applied to the construction, repair and maintenance of tertiary roads.".

This amendment proposes that a special fund be made available by the Department to enable local authorities to repair and improve tertiary roads. My colleague, Deputy Gilmore, made this suggestion in the Dáil during the debate on the Bill. There is a major problem with tertiary roads. In my local authority area roads leading into estates, particularly old roads, have deteriorated severely in recent years. The road into my estate is full of potholes; it is in an unbelievable state. Every now and then the county council has the holes filled but the repairs only last for a couple of months before the holes reappear. Substantial work has to be done on them.

There are tertiary roads throughout the country and the councils do not seem to be able to repair them in a substantial way. There should be a special fund for that type of work. It would also reduce costs in the long term. If proper work was carried out now, the roads would not have to be reinstated in the future, which would be far more costly. Last year, as a result of Government cutbacks, the mid-year grant usually made available to local authorities and which could have been used for this work was not made available. The funding proposed in the amendment would be useful in that regard.

People feel badly about this and other taxes. On the one hand, the Government makes much of reductions in income tax but motor tax is one of a number of charges that are not income related. They are hitting people hard. Motorists should be able to see that this money is being put to a use that will improve their quality of life. It should be put into the improvement of roads. Despite this 12% increase in motor taxation, the amount spent on roads is not increasing but reducing. The grant last year for non-national roads was €438 million. As the same amount has been allocated this year, there is no increase for inflation. Effectively, the amount is being reduced. Other allocations have been reduced. The budget for restoration, for example, has been reduced from €221 million to €216 million.

Motorists will not understand the reason they are expected to fork out more money when road budgets are being reduced. If they are paying extra tax, they should see how that money is being spent. I suggest it could be used for tertiary roads, the condition of which is particularly bad.

Photo of James BannonJames Bannon (Fine Gael)
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I second the amendment. The Bill paves the way for the Government to increase taxation for motor vehicles by 12%, way beyond the rate of inflation. The biggest culprit in causing inflation is the Government because most of the charges it has introduced are in excess of 5% or 6% and, thus, not keeping in line with inflation, even though it preaches that we have to stay within the boundaries of inflation. It has the cheek to tell us that the additional funding is for the local authority roads programme but, as Senator Tuffy and others have said, no extra money has been made available for roads. In fact, some €70 million has been taken out of the roads programme causing a huge shortfall.

At least three roads have been dropped from the County Longford five year road development programme due to inadequate funding from the Department. It is anticipated that the increase in motor taxation will bring in approximately €65 million but there will still be a shortfall of around €5 million on the allocations to local authorities for 2003. We are told we will have to make up the shortfall of €70 million by increased motor taxation but the allocation for county roads has decreased considerably.

The Government is playing a game of three card trick, robbing Peter to pay Paul. We have been misled several times by it since it took office. We have seen increased motor taxation and other increases in order to prop up the mismanagement of "Charlie's economy". I would like to show the Minister of State some of the roads in my area of the midlands, which are in a dreadful condition. He would not risk bringing a State car along any of them because they are in such a poor state.

We were conned by the first Charlie for several years and it now appears that the Minister of State is being conned by the second Charlie, the Minister for Finance, given the 12% increase in road tax. These taxes are being introduced by stealth and will hit everybody, including families, thus contributing to inflation which is out of control.

The Bill contains no relief proposals for disabled drivers. The purchase relief tax is unfairly administered. I know of many deserving cases who cannot avail of it, despite suffering from disabilities.

Rory Kiely (Fianna Fail)
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I do not think that is relevant.

Photo of James BannonJames Bannon (Fine Gael)
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It is.

Rory Kiely (Fianna Fail)
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Is the Senator speaking about the maintenance of tertiary roads?

Photo of James BannonJames Bannon (Fine Gael)
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The Government missed an opportunity to introduce legislation to help people with disabilities. One has to be either legless or armless to avail of the tax relief, which is very sad. I know several people who have suffered strokes, who—

Rory Kiely (Fianna Fail)
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That is not relevant. The Senator should stick to the text of the amendment.

Photo of James BannonJames Bannon (Fine Gael)
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It most certainly is – it refers to relief from motor vehicle tax for people with disabilities.

Rory Kiely (Fianna Fail)
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I am ruling that it is not relevant to section 2. The Senator should stick to the text of the amendment.

Photo of James BannonJames Bannon (Fine Gael)
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It deals with extra taxation.

Rory Kiely (Fianna Fail)
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No. The Senator should read the amendment.

Photo of James BannonJames Bannon (Fine Gael)
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Provision should have been made in the Bill for a more equitable system for disabled drivers.

Rory Kiely (Fianna Fail)
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I have ruled that this amendment is not relevant to disabled drivers. The Senator should please stick to it.

Photo of James BannonJames Bannon (Fine Gael)
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There is no provision in the Bill to encourage people to reduce mileage.

Rory Kiely (Fianna Fail)
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That is not relevant either. It is a Second Stage contribution and the Senator is wasting time.

Photo of James BannonJames Bannon (Fine Gael)
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I support the amendment.

Photo of Michael KittMichael Kitt (Fianna Fail)
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I have much sympathy with what Senator Tuffy said concerning tertiary roads. I am concerned, however, that if we were to confine the amendment to the construction, repair and maintenance of tertiary roads, we would be forgetting about many other non-national roads. I am thinking, in particular, of county and regional roads. The Minister of State's Department makes a contribution to the CLÁR programme, about which I spoke yesterday. That programme ensures repairs are carried out on roads that might otherwise not be maintained.

I appreciate that the local roads improvement scheme is not available in every part of the country but it is very important in County Galway as it is responsible for funding the repair of roads leading to bogland. There may not be any houses along these roads but there has to be some way for people to gain access to such farmland. It would be wrong to confine the amendment to tertiary roads when there are so many other types of route that require funding for repairs.

Photo of Pat GallagherPat Gallagher (Minister of State, Department of the Environment and Local Government; Donegal South West, Fianna Fail)
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The amendment proposes to give primacy to tertiary roads in the context of extra revenue generated by the increases in motor tax set out in the Bill. I cannot accept it as to give statutory priority to a particular class of road such as tertiary roads would set a most unwelcome and inflexible precedent. Senator Tuffy, supported by Senator Bannon, is saying the €65 million should be spent on tertiary roads at the expense of regional and county roads. That is what is being suggested, although I am not suggesting for one moment that tertiary roads are unimportant. If this was to happen, perhaps Senators could indicate how local authorities would decide which roads would miss out on funding. It might be the popular thing to say but it would not be a realistic or practical thing to do.

The non-national road effort is based on a holistic approach which is bringing about quantifiable improvement to the network. It is important to set the context by providing a breakdown of what is involved. Of the 87,150 km of non-national roads in county council areas, there are in excess of 11,000 km of regional roads, 23,600 km of local primary roads, 32,000 km of local secondary roads, and 20,000 km of local tertiary roads. The proposed amendment seeks to give absolute priority to the latter category which accounts for only 23% of the non-national road network.

The maintenance and improvement of non-national roads are matters for individual local authorities which submit multi-annual programmes to the Department. Far be it from me to advise Senators but if councillors, Senators or Deputies feel priority should be given to their respective local authority areas, I can only suggest that in exceptional circumstances they should have discussions with their local authority. The Department is prepared to consider positively any request from a county council to adjust the current 2002-05 multi-annual restoration programme to allow for the inclusion of one or more local tertiary roads in place of schemes already included in the programme. If local authorities are of the view that this should be done and if they make a case to the Department, we will be more than prepared to give positive consideration to any such request.

Some 50% of the overall allocation goes to the restoration programme, which has been in place since 1995. It aims to restore all those regional local roads which were deficient in 1996 by the end of 2005. The programme was undertaken on foot of multi-annual restoration programmes prepared by county councils and submitted to the Department. If it is the wish of any local authority to have this amended in any way, we will be only too pleased to act as positively as we can. Local authorities are best placed to determine the priority to be accorded to their roads under these multi-annual programmes. The restoration programme has been a great success.

Up to the end of 2002, nearly 30,000 kilometres of non-national roads were restored to good condition under the programme. Priority would have been accorded to regional roads and more heavily trafficked local primary roads up to now. Given the progress already achieved, it would be expected that further such programmes will be in a position to include much greater numbers of local secondary and local tertiary roads.

A further pavement study will be carried out in 2003. The Department is finalising the terms of reference for this study and tenders will be sought shortly. The study will ascertain the extent of the remaining deficiencies in the network and will examine each class of road, including tertiary roads.

Section 13(2) of the Roads Act 1993 places a legal responsibility on local authorities for the maintenance and construction of regional and local roads in their areas. It would not be in the best interests of the road network to accept an amendment that would give priority to one type of road over others. This would be inflexible. It would interfere with the local democratic decision making process currently operated by local authorities. I would not wish to introduce any legislative rigidities or inflexibilities into the funding programme for non-national roads. We are accused too often of not giving sufficient power to the local authorities. This is a matter for local authority members to decide. These tertiary roads will receive attention in the future and I await with interest the findings of the new pavement study on this category of road.

The Cathaoirleach ruled out of order a debate initiated by Senator Bannon on funding and assistance through the health boards for primary medical certificates. This matter is currently being considered by the Minister for Finance as a result of the interdepartmental group which carried out an extensive study of it some time ago. I am sure the Senator, even in his capacity as a councillor, would have made a submission to the relevant Minister at that time.

It is difficult to listen to criticism – although this is what we are here for, but such criticism should be constructive – from Senator Bannon. I am not here to ask questions but to answer them. Nevertheless, I would like to ask Senator Bannon if he is aware of his local authority's contribution to the non-national roads in its area. If he is not, I will tell him what it was.

Photo of James BannonJames Bannon (Fine Gael)
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I am most definitely aware of it.

Photo of Pat GallagherPat Gallagher (Minister of State, Department of the Environment and Local Government; Donegal South West, Fianna Fail)
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It was less than €500,000 in comparison to a contribution in my county of €3 million and a contribution in Galway of €5 million.

Photo of James BannonJames Bannon (Fine Gael)
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On a point of order, the Minister of State stands to be corrected. The contribution by my local authority was over €800,000.

Photo of Pat GallagherPat Gallagher (Minister of State, Department of the Environment and Local Government; Donegal South West, Fianna Fail)
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I hope the Senator's council will be able to respond when we raise this matter with it.

The 2003 Estimate for this area is €432,000 compared with €410,700 last year. We must be realistic about this. I am making an obvious point. If there are problems in this area, local authorities have a duty and a responsibility to contribute some of their resources to address them. A number of local authorities this year reduced their resources in this area, possibly because they are under pressure. I made this point here yesterday and the facts can be made available to Senators if they wish.

This is a difficult year in terms of resources. The Department, through the local government fund, increased its contribution by 6%, bringing the local government fund for 2000 to an all time record of €1.048 billion in comparison with an amount of €701 million in the fund in 1999. We are, therefore, making progress. We have a multi-annual programme for 2002 to 2005. I want to adhere to the amendment before us. If there are difficulties in some local authorities, they should communicate with us on them and we will act as positively as we can.

Unfortunately, I am unable to accept this amendment because it would not be in the interests of any local authority that an amount of €65 million should be ring-fenced for tertiary roads, which comprise only 23% of the non-national road network. That is not to say that I do not accept that there is a problem, but any Members who have been involved in public life for a long period will realise that all difficulties are not resolved immediately. We have a programme in place and we will have another one in place after 2005. I await the outcome of the pavement condition study and I would be interested in its views and recommendations in regard to these roads.

Photo of James BannonJames Bannon (Fine Gael)
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The Minister of State referred to the input by my local authority. I requested a figure of €800,000 and that is the amount that was contributed by my local authority to our roads programme. As the Minister of State is aware, Longford is a poor and impoverished county and recent figures from the Central Statistics Office confirm this. Having regard to the disposable income per head of population, a person living in County Longford would have a disposal income of €4,000 less than the national average. Such income comes from a low rate base – in the region of 7% in the county, which is due to the number of industries that have been closed down. We have an impoverished county due to neglect on the part of the Government and its immediate predecessor to bring services and industry into the county.

I am delighted the Minister of State referred to accommodating and facilitating disabled drivers. Those who are outside the tax relief system must be included and it is important that they will be.

An Leas-Chathaoirleach:

We are dealing with amendment No. 1 and I ask the Senator to speak to it.

Photo of James BannonJames Bannon (Fine Gael)
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I contributed to the debate on improving tax relief for disabled drivers when it was at local authority level.

Photo of Joanna TuffyJoanna Tuffy (Labour)
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In reply to Senator Kitt and the Minister of State, the Labour Party tabled this amendment because there is a particular problem regarding tertiary roads. The funding that is being made available is additional. Where additional funds are available, it would be good for motorists to see that they are being put to good use. However, that is not evident from what the Minister of State said or from the way money has been allocated to the road programmes.

This amendment does not in any way give priority to tertiary roads over other types of non-national roads. There is a particular problem regarding tertiary roads and this additional funding provides an opportunity to address it. However, the money seems to be going into a black hole and we cannot see the use to which it is being put in terms of the roads budget. What we propose would be a way of identifying exactly where the money is going.

The Minister of State said that it is a matter for local authorities to decide how they deal with allocations for tertiary roads. I do not have the exact figures for my local authority but my colleague, Deputy Gilmore, asked his council, Dún Laoghaire-Rathdown County Council, about this. It predicted that the estimate for the restoration of tertiary roads in its area would be €10 million, whereas the money it could provide from its own resources in any year was approximately €500,000. That is a big shortfall which is probably replicated in other areas.

The economy performed well for the past few years. Things may be slowing down now but we have not gone completely downhill. Tertiary roads have become worse, as most people would agree, and this deterioration has caused huge annoyance among motorists. This amendment would help the Government to focus minds in local authorities to deal with tertiary roads more strategically than currently. There are provisions which enable local authorities to view other roads in a more strategic way, while they tend to view tertiary roads in an ad hoc manner and dealing with them comes under discretionary funding. One has to shout just to get a pothole filled, but they reappear a few months later. They should be dealt with more strategically.

All our roads are important but there is a particular problem with tertiary roads, which are in very poor condition. Defective surfaces on such roads are causing huge damage to cars and are also responsible for accidents. There is another cost here when local authorities are sued. The more annoyed motorists become, the more likely they are to sue local authorities for the damage done to their cars and for personal injuries.

My colleague, Deputy Howlin, proposed the local government fund when he was Minister for the Environment. The idea was to ring-fence the fund and make it accountable for how money is spent. However, I am a member of a local authority and to me the funding process is very mysterious. I cannot see the necessary accountability for the expenditure of this money.

This amendment seeks to ensure this is not another stealth tax which seeks to make up the shortfall arising as a result of Government mistakes. It would be far more constructive if people could see the money going to a particular purpose.

Michael Brennan (Fianna Fail)
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I welcome the Minister of State's announcement regarding the pavement study. It is important to see where the last six to eight years' investment has gone.

I share the Minister of State's view that flexibility should remain at local authority level regarding priorities. As he said, he is prepared to review these programmes with the local authorities. When the value for money study of the standards set by the Department over recent years comes to light, it will show the investment at local authority level was money well spent.

Photo of Michael KittMichael Kitt (Fianna Fail)
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I support Senator Brennan's comments. The Minister of State's comments about tertiary roads are important. We know some of those roads are in bad condition and it would be a good idea if some at least could be included in the multiannual programme from 2002 to 2005. I hope the Department would look favourably on that request.

I agree with Senator Tuffy regarding the state of the tertiary roads but we cannot include those at the expense of other roads, such as non-national roads. The Minister of State should look at the request from local authorities to include some tertiary roads in the programme.

Photo of Pat GallagherPat Gallagher (Minister of State, Department of the Environment and Local Government; Donegal South West, Fianna Fail)
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This is a matter for each local authority and we will look at it on an authority by authority basis. Senator Tuffy mentioned Dún Laoghaire-Rathdown County Council, which under the 2003 allocation receives €9 million, though there is nothing for tertiary roads. However, if one goes back a few years it received €127,000 for that sector. This is a matter of priorities but if her local authority comes to us we will consider its application in the manner suggested by Senator Kitt.

Motor taxation is not a budgetary issue. The money accrued is ring-fenced and goes into the local government fund. There is also a substantial Exchequer contribution. As a result of the increase in motor tax over the years and generous increases in the State contribution to the local government fund, the non-national roads grants have increased from €214 million in 1997 to €435 million last year, a record level of investment. We will do our utmost to maintain those levels.

I do not want to pursue the local politics of Longford but the general purpose grant for Longford has increased from €4.2 million in 1997 to €9.3 million in €2003. That is an increase of just under 120% and the increase in funding for non-national roads has increased by 67%. That positive discrimination is done on the basis of need and I realise that the county requires extra funding. The message should go out, however, that the Department is being as generous as possible and will look at each county on the basis of its needs.

Senator Bannon has the record which states that Longford County Council has the lowest own-resources in the country. I appreciate his point about the rate base but it is a good signal to the Department if an increase is indicated there because that would show this is a priority. We are supplementing the local authorities' resources but most of the time it looks like they are supplementing ours.

Unfortunately I cannot accept the amendment but, as I said to Senator Tuffy's colleague in the Dáil, the Dún Laoghaire-Rathdown County Council has been pursuing this vigorously. The pavement study will be important if one wants the council to look at a number of roads. However, this will not be an add-on; it will be in substitution for something else and that will not be palatable. I cannot accept the amendment.

Amendment, by leave, withdrawn.

Section 2 agreed to.

SECTION 3.

Photo of James BannonJames Bannon (Fine Gael)
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I move amendment No. 2:

In page 4, line 15, to delete "30" and substitute "25".

This amendment relates to the rate for duty so prescribed for licence for a vehicle for a quarter of the year only. The Bill states that this shall not exceed 30% of the full annual duty and I want to reduce this to 25%. There have been cruel increases already at a time when inflation is between 4% and 6% and I am trying to help those with overstretched pockets, particularly young people. Perhaps the Minister of State will consider a 5% reduction in order to make amends to disabled drivers and so on.

Photo of Joanna TuffyJoanna Tuffy (Labour)
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I second the amendment.

Photo of Pat GallagherPat Gallagher (Minister of State, Department of the Environment and Local Government; Donegal South West, Fianna Fail)
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The effect of this amendment would be to eliminate altogether the existing relatively low surcharge that applies to taxing one's car on a quarterly rather than annual basis. Fractions of a euro are rounded downwards for motor tax purposes and the proposed amendment would make it cheaper to tax a car on a quarterly rather than an annual basis. There would also be additional administration costs to take into consideration.

There is no sound basis for doing this. It would encourage a far greater degree of quarterly taxing, which would have two effects. It would significantly increase the administrative costs involved in the motor tax process which, in turn, would reduce the amount available for the local government fund and would also lead to an increase in queuing time in motor tax offices and a slowdown in the time taken to turn around proposed tax renewals.

Last week, I took the opportunity to visit the Shannon motor tax office which was decentralised many years ago by the then Minister for the Environment, the late Sylvester Barrett. I was very impressed with the efficient operation of the office, which employs some 80 people.

Acceptance of the amendment would provide an incentive for those who pay motor tax on an annual basis to revert to paying on a quarterly basis. If they all chose to do so, it would be extremely costly and not in our best interests. The effect of the amendment would be that all motorists who renew their tax quarterly, with the exception of motorists in the two lowest bands, would pay less than last year. This would militate against the intention of the Bill which is to raise money for the local government fund.

I am aware that some people have difficulty renewing their motor tax on an annual basis. To assist such motorists, the surcharge was reduced by the Government by regulation in 2001. The reduction amounted to a 1% saving. In addition, when the rates were converted into euro last year, the cent element of all rates was disregarded and for quarterly taxing the practice of rounding up to the nearest whole unit was replaced with rounding down to the nearest euro. I hope the House will agree that quarterly renewals have been dealt with in a fair and reasonable manner in recent years. In the circumstances, I do not propose to accept the amendment.

Senator Bannon made a brief reference to taxation for disabled drivers. Senators will be aware that concessions are available for such drivers. Those who have successfully applied for the primary medical certificate benefit from reduced VRT and VAT rates. There is no doubt, therefore, that the difficult circumstances experienced by disabled drivers have been taken into consideration.

Photo of James BannonJames Bannon (Fine Gael)
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The Minister of State and I, as well as many others, can afford to renew our motor tax annually. Mainly we do this for convenience because we do not want to queue to pay our motor tax as many as four times a year. Does the Minister of State have statistics on the number of people who pay quarterly tax?

Young people, particularly those under 25 years, should be offered special facilities as they have major financial commitments in terms of purchasing their first car or leaving home to live in rented accommodation. The astronomical cost of insurance for persons under 25 years is higher than the value of the car in most cases. Memories of youth are lasting and steps should be taken to facilitate and encourage young people. Those who renew their tax quarterly tend to be the least well-off in society who cannot afford to pay annually. The purpose of the amendment is to accommodate this group.

Photo of Pat GallagherPat Gallagher (Minister of State, Department of the Environment and Local Government; Donegal South West, Fianna Fail)
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I appreciate the points the Senator makes. Everyone can face financial pressure and I readily accept that motor taxation is expensive for young people. More importantly, however, their insurance costs are much too high, a problem I hope will be rectified by the steps being taken by the Tánaiste and Minister for Enterprise, Trade and Employment.

The annual rate of motor taxation for cars in the 1,300 cc to 1,400 cc range is €278. The quarterly old rate was €70. This year the new quarterly rate will be €78, a minimal increase of €8, which is both reasonable and fair. If the large number of people who tax their cars on an annual basis decided to do so on a quarterly basis, it would create a phenomenal amount of additional expense and reduce the moneys available to the local government fund and the roads fund.

The rough estimate of the figures the Senator requested is that 45% of motor tax is paid on an annual basis, some 30% on a quarterly basis and some 25% on a half-yearly basis. If everyone decided to pay on a quarterly basis, it would cause serious problems. The difference between the rates is minimal and, therefore, the proposal is unwarranted.

Amendment, by leave, withdrawn.

Section 3 agreed to.

SECTION 4.

An Leas-Chathaoirleach:

As amendments Nos. 4 to 7, inclusive, are related to amendment No. 3, the amendments may be discussed together by agreement. Is that agreed? Agreed.

Photo of James BannonJames Bannon (Fine Gael)
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I move amendment No. 3:

In page 4, lines 20 to 22, to delete all words from and including "substituting" in line 20 down to and including "Schedule" in line 22 and substitute the following:

"increasing the figures contained in Part 1 (inserted by the Act of 2001) of the first-mentioned Schedule by 5 per cent".

The purpose of the amendment is to keep the figure in line with inflation. The Government is the greatest offender in terms of contributing to inflation. The proposed figure of 5% is roughly in line with the inflation rate. Amendment No. 4 proposes to substitute the figure of €43 on page 4 with €40. Again, the purpose of the proposal is to accommodate young people and others.

People are feeling overstretched. Even since the war in Iraq began, fuel prices have increased considerably, creating additional demands on people and adding to inflation. In my conversations on the issue of motoring, the most common cause of annoyance is the high cost of motoring and the duties one must pay. There is no protection available to motorists whose cars are vandalised or robbed. The proposed figure of €40 is realistic.

Elderly people are badly affected by motor tax as they usually use their cars only once or twice a week to collect their pension at the post office or attend mass on Sundays. Motor tax is a hefty burden on this group which we propose to help. We will all reach old age some day. We should introduce concessions for this group.

I ask the Minister of State to accept these realistic amendments which would reduce the levy from €43 to €40 and €255 to €240 respectively. I also ask him to accommodate disabled drivers by providing for some concessions in this area. People feel the manner in which the Government increased road tax after the budget was cold, callous and unfair and has added to inflation. I ask the Minister to be accommodating.

Photo of Joanna TuffyJoanna Tuffy (Labour)
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I second the amendment. It would be better to keep the increases in line with inflation. As Senator Bannon said, these types of increases will only add to inflation and affect everybody unfairly.

Photo of Pat GallagherPat Gallagher (Minister of State, Department of the Environment and Local Government; Donegal South West, Fianna Fail)
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As the House is aware, the purpose of the increases in motor tax is to fund local authorities' general purpose and road funds in 2003. The level of increase in motor tax rates provided for in the Financial Resolution passed by the Dáil on 12 December last, and provided for in this Bill, is set at 12%. The Senator's amendment would see the increases reduced to 5%.

A decision to increase taxes is not taken lightly. If a smaller percentage increase was feasible, it would have been proposed but it must be remembered that the decision to increase motor tax rates was taken against the background of the past ten years, from 1992. If we were to increase motor tax on a yearly basis in line with inflation, up to last year that increase would have amounted to a cumulative figure of 33%. However, the increase was 3% in 1998, 3% at the beginning of 1999 and between 4% and 6% in 2001, giving a total increase of 12%. It has been suggested by Senator Bannon that we should increase taxes in line with inflation but we have done the opposite. There has been a 12% increase in the past ten years up to last year.

I repeat what I said on Second Stage. For the majority of motorists the increase will be between 29 cent and 58 cent per week. The increases set out in the Bill have been introduced with good reason. The revenue generated by motor tax increases goes to the local government fund which, in turn, is used to finance the general purpose fund and non-national roads. If the Senator's amendment was to be accepted, it would significantly reduce the level of funding available to local authorities by €42 million. Nobody could condone this.

In the light of current demands on local authority funding and the desire of the Government and local authorities to maintain non-national road spending at the 2002 record levels, it would not be sensible or wise to accept the Senator's amendment. I refer Senators to a debate in this House before Christmas when a case was made for more funding for local government. They cannot have it both ways.

Photo of James BannonJames Bannon (Fine Gael)
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There are no additional services for motorists, despite the tax increases of 12%. Several people have approached me with regard to their cars being robbed or burgled. Some protection should be given to motorists who are annoyed about their cars being robbed. The Minister of State referred to the reduction in funding for roads but we were conned by the Minister for Finance, Deputy McCreevy, in the last budget when he left a shortfall of €70 million for road programmes nationally, which we now have to make up with extra taxation. Those are the facts which are evident in the Minister's Budget Statement. Every local authority has been affected by the shortfall. There is no extra money but people cannot be fooled. The Minister took that €70 million from the budget for the roads programme and this 12% increase in motor taxation which the people will have to pay is an additional tax. We should request that €70 million from the Minister to make up the shortfall in the roads programme nationally.

Photo of Pat GallagherPat Gallagher (Minister of State, Department of the Environment and Local Government; Donegal South West, Fianna Fail)
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There is no question of the Minister conning anyone. It was suggested in the other House that this would be additional funding over and above last year's figure but when the Minister introduced the Financial Resolution in the House on 12 December, he made it clear that the reason he increased motor taxation was to retain the same level investment in non-national roads. When I addressed the House recently, I made it clear that the allocation would be €434 million. Those of us who are pragmatic politicians stated clearly that in addition to this amount there would be an additional €65 million to €70 million. Anyone who says he or she was not aware that there would be the same record levels as last year is being economical with the facts and somewhat mischievous. I rest my case.

The question of cars being damaged is a matter for the Department of Justice, Equality and Law Reform. Other increases are matters for the Minister for Finance. Insurance is a matter for the Minister for the Environment and Local Government. We are all aware of the serious problems which we are trying to resolve.

Lest the message goes out from this House that those who qualify for the disabled driver's grant will be affected, there are concessions when it comes to taxation. Taxation in that area is minimal in that it covers administration costs but we are talking about those individuals whose application for the grant is successful. There may be another band in addition to this but that is the position.

Amendment, by leave, withdrawn.

Section 4 agreed to.

Section 5 agreed to.

Amendments Nos. 4 to 7, inclusive, not moved.

Sections 6 to 9, inclusive, agreed to.

Schedule agreed to.

Title agreed to.

Bill reported without amendment.

Question put: "That the Bill be received for final consideration."

Tellers: Tá, Senators Minihan and Moylan; Níl, Senators Bannon and B. Hayes.

Question declared carried.

Question proposed: "That the Bill do now pass."

Photo of Pat GallagherPat Gallagher (Minister of State, Department of the Environment and Local Government; Donegal South West, Fianna Fail)
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I thank all the Senators who have contributed to the debate. I thank the Leader of the House and the Seanad staff for their co-operation in ensuring this Bill will be passed by both Houses before the statutory date. This Bill is important as it provides for the local government fund for various local authorities and ensures the increase of the general purpose fund by some 6%. It will also ensure the maintenance of the record levels of funding for the non-national roads at €434 million. That is in sharp contrast with €214 million in 1997.

This Bill is about local government, the arm of democracy closest to the citizens. It is incumbent on us in the Oireachtas and the Government to ensure that the additional funding is provided in the local government fund. I am particularly pleased by the independent evaluation carried out by economic consultants, Fitzpatrick Associates. Of course, there will be cases where people are unhappy with the quality and standard of specific roads. In a macro sense, the Fitzpatrick Associates report referred to the reasonable and efficient basis on which our roads are maintained. If we can improve on the efficiency and value for money, then the Department will work in co-operation with the local authorities. It is the Government's intention to maintain high standards and to develop our non-national roads network.

I reiterate that the local government fund is funding for the roads network. It is ring-fenced and is under the aegis of the Minister for the Environment and Local Government and cannot be transferred to another Department.

Photo of James BannonJames Bannon (Fine Gael)
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I thank the Minister of State for being with us while carrying this legislation through the House. We have had our political differences on this Bill and many other issues but I have always found him very approachable, even prior to my election to the Seanad. He is a good friend of local authorities and was the first local authority representative from Donegal when the Local Authority Members Association was established. As a Minister of State, he is co-operative in dealing with the association and tuned in to issues affecting local government. I also thank the officials of the Department of the Environment and Local Government and the Seanad staff for their assistance in carrying through this legislation.

Financial strategy for local government is an issue that must be dealt with. There are numerous cash-starved local authorities, in particular the smaller ones that come from a low rate base. The whole issue of equalisation needs to be examined quickly. I wish the Minister of State well in his endeavours.

Photo of Michael KittMichael Kitt (Fianna Fail)
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I join in the thanks to Minister of State, Deputy Pat Gallagher, for being with us here for two days and staying with the debate. I thank him and his officials too for the answers to the questions we raised.

The non-national roads are important, particularly to the people who use them. We gave a list today of county, regional and tertiary roads and of the local improvement schemes which are under way. I was glad to hear the Minister for State say that he would look at requests from local authorities for all these roads in the multi-annual programme and I hope we will be able to deliver on that. He seems to have the funds and we will have more through the local government fund which he will be able to deliver for the people of each county. I feel confident that if the local authorities put forward those proposals they will get a good response from the Minister of State. I thank him again for his attendance.

Question put and agreed to.

Sitting suspended at 12.30 p.m. and resumed at 2p.m.