Pearse Doherty (Sinn Fein)
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Cuirim fáilte roimh an Aire Stáit. Ba mhaith liom an táille ar thithe saoire, tithe atá á ligint ar cíos agus tithe nach bhfuil an t-úinéir ina chonaí iontu, a thugadh isteach i mbuiséad 2009, a ardú os comhair an Tí. D'fhógair an tAire Airgeadais trí sheachtain ó inné go mbeadh táille de €200 i gceist. Conas a chuirfear an scéim seo i bhfeidhm? Cathain a mbeidh an reachtaíocht os comhair an Tí? Conas a oibreoidh an chóras i gcás duine atá ina chónaí taobh amuigh den Stát? An gcoinneofar an tairgead sna ceantair — na comhairlí contae — ina bhfuil na tithe éagsúla?

This Adjournment matter deals with the budget, which has been a savage attack on the most vulnerable people in society. When I heard the Minister for Finance announce the €200 levy on holiday homes, however, I welcomed it. Earlier this year, I called on the Minister to allow local authorities to impose a levy on holiday homes across the State. The Minister went further than holiday homes, however, dealing with the rental sector and non-principal places of residence. When will the legislation be brought forward? Will the moneys collected within a local authority area remain within that area? How will the levy be applied to people who live outside the State?

When I asked earlier this year that a levy be imposed on holiday homes, I was asking for it to supplement local government funds. Unfortunately, however, three weeks ago the Minister and the Government decided to slash the funds available to local authorities. We now see many local authority projects across the country grinding to a halt because they cannot reach the matching funds. This should not be an either-or situation. As all Senators know, local authorities badly require additional revenue. Widening the scope for additional revenue to local authorities is positive in one regard, but it is deplorable to take it away with the other hand.

The Minister of State will be aware that many local authorities are currently examining their budget estimates. Many of them consider this holiday home levy to be the great white hope to bridge the funding gap that exists. The only other solution is to increase rates, but nobody wants to see that happening in the current environment. It is important to bring this legislation before the House, where I will examine it closely.

On budget day, the Minister said all other non-principal places of residence will be levied. However, my county has the highest unemployment rate in the country and many people must travel to Dublin or abroad to find work, thus leaving their houses vacant during the week. Under the Minister's plan, such houses would be subject to a levy. We will deal with these matters when the legislation comes before the House, but I would ask the Minister of State to deal with the questions I posed. When will the legislation be brought forward, will the moneys collected in a local authority area be kept within that area and how will the levy be collected from people who have property in the State but reside outside it?

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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Os rud é gur thíolacadh an cheist seo don Seanad i mBéarla, freagróidh mé é i mBéarla. Current expenditure by the local government sector is forecast at about €5 billion this year. Clearly, a very significant income stream is required to underpin expenditure of this order. However, the revenue base available to local authorities is relatively narrow. Commercial rates account for just over one quarter of local government revenue, and income from goods and services account for about 28%. The balance of some €2.2 billion is funded by central Government and is almost equally divided between specific grants and subsidies, and general purpose grants from the local government fund. There are significant implications for the Exchequer. Leaving aside central Government grants and subsidies for specific services, the recently published abridged Estimates provide for a grant of €520 million to the local government fund. With income from motor tax also, this fund is used, inter alia, to support general purpose grants for local authorities.

Local government services are vital to the well being of our communities — water services, social housing and regional and local roads are good examples. Senators will be aware that the demand for these services increases all the time, but they do not come cheaply. There has been considerable discussion over many years as to how local authorities should be funded. Their current narrow revenue base is one of the reasons the government decided to introduce a €200 annual charge on all non-principal private residences effective from next year. The other reason is the scale of the economic difficulties which we face as a society. The proceeds of the charge will be used to support the provision of local services.

In his recent budget, the Minister for Finance made clear that the €200 charge will apply to all non-principal private residences in the State, with the exception of dwellings that have yet to be sold. Owners of property to which the charge applies will not be exempt simply by virtue of the fact that their main residence is located outside the State. There is nothing especially new in this. Other public and private sector charges, such as charges for waste services, are levied on those who are liable for them, irrespective of whether their main residence is in the State.

I note the point raised concerning the retention by local authorities of the proceeds of the charge. I am at present considering the detailed provisions under which this measure will be operated and I do not wish to pre-empt the outcome. However, non-principal residential properties are not distributed evenly across local authority areas. Some have a high number of rented dwellings, others have many holiday homes and yet others have few non-principal private residences of any kind within their functional areas. This suggests that it would not be equitable simply to provide for local authorities to retain the revenue stream to which the charge will give rise.

It is my intention to bring forward legislation to give effect to this measure as soon as possible, and this will address the detailed parameters under which the charge will operate, including the matters raised by Senator Doherty.

Pearse Doherty (Sinn Fein)
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Go raibh maith agat, a Aire. While one of my questions was answered, the other was not. For example, the Donegal county manager said the council will plug the gap in funding from the decrease in the local government fund from central Government through these charges. However, we have no idea when the legislation will be published, introduced or take effect in order that a local authority can start the hard work involved. The Minister of State says it is not equitable to have these charges retained within a local authority area, but I think that decision is wrong. Local authorities apply rates to businesses within their areas. Will the same standard be applied to businesses? That would mean all businesses in the State would be taken together and the revenue would then be divided out equally. For example, in the west, where we do not have many thriving businesses, the rates base is very low. The west also has most of the holiday homes — one quarter of them in County Donegal alone. It would be unfair and would be a case of double standards if the Government were not to allow the local authority charge on holiday homes to be kept within the local authority area. Furthermore, we need clarification, as do the county managers and the councillors across the State who will be holding budget meetings soon, as to when local authorities will be able to levy this charge. I appeal to the Minister of State to ask the Minister for that information for me.

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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I have stated already that I will be bringing forward legislation on this matter and the county managers and the Houses of the Oireachtas will be informed. On the Senator's argument that the moneys accruing from holiday homes should be held by the local authority, the information and advice available is that smaller counties would lose out drastically because this charge includes all second homes and rented properties. Small counties such as Leitrim, my own county of Roscommon, or Longford would have a very small return on either rented or holiday homes whereas some of the larger counties would have a significant return as well as having a higher rate base. I want to ensure equality and something like the previous equalisation clause. I want to ensure smaller counties with a low return are not penalised or left short of funds.