Joanna Tuffy (Dublin Mid West, Labour)
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Question 46: To ask the Minister for the Environment, Heritage and Local Government if he will confirm that section 4 of the Local Government Act 1998 has been repealed and that in future the Government contribution to the local government fund will no longer be index linked and will be at his discretion by agreement with the Minister for Finance; and if he will make a statement on the matter. [10161/09]

John Gormley (Dublin South East, Green Party)
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Section 4 of the Local Government Act 1998 required that the Exchequer contribution to the Fund was to be increased annually in line with inflation as measured by the Consumer Price Index. Section 17 of the Financial Emergency Measures in the Public Interest Act 2009 amends this provision and provides that the annual exchequer contribution to be paid into the Local Government Fund is to be agreed between the Minister for the Environment, Heritage and Local Government and the Minister for Finance as part of the Estimates and Budgetary process.

The Financial Emergency Measures in the Public Interest Act 2009 provides that the new pension-related deduction applies to local authority staff along with other public servants. Local authorities will retain the full proceeds of the new pension-related deduction and the Exchequer contribution to the Fund is being reduced to take account of the deduction. This will have a neutral impact on local authority finances.

The Government also decided to broaden the revenue base of local authorities by introducing a charge on all non-principal private residences. The new charge will be set at €200 per dwelling, and will come into effect in 2009. It will be payable by the owners of private rented accommodation, holiday homes and other non-principal residences but will not be applied to new dwellings as yet unsold. The charge will be levied and collected by local authorities, and will be used to support the provision of local services. Legislation will be brought forward to give effect to the charge shortly.

The Commission on Taxation will be reporting on Local Government funding later this year and this will inform the Government's long term approach to Local Government financing.