Róisín Shortall (Dublin North West, Labour)
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Question 49: To ask the Minister for Finance if he has ruled out the introduction of a property tax for 2011, as suggested by its absence from his recent address to the annual dinner of the Irish Taxation Institute; if he expects changes for domestic water charges to impact on the Exchequer position from 2011 onwards; if he will estimate the annual revenue expected to be derived from domestic water charges once implemented; and if he will make a statement on the matter. [11649/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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At the outset, I would like to point out to the Deputy that while I did not specifically mention the introduction of a property tax for 2011 in my address to the Irish Taxation Institute, I did stress that the tax base needs to be broadened. In particular, the Deputy will be aware that I mentioned in my address that €2bn out of an overall €3bn adjustment for 2011 would have to be achieved from reducing the cost of public services and reform of how we tax income. Given that I indicated there was "little or no scope for increases in marginal income tax rates", it will be necessary to examine other ways of broadening our tax base.

The Deputy will be aware that the Government has successfully introduced a levy on second homes which yielded of the order of €60 million in 2009. The introduction of a more general property tax represents a major structural change in the tax system and any such development would have to be considered in light of the overall tax burden on individuals, the need for base broadening measures and current market conditions. The form of taxation on property will have specific regard to the commitment in the Renewed Programme for Government to introduce a Site Valuation Tax for non-agricultural land, following the necessary valuation and registration process.

In terms of water charges, the Deputy will be aware that my colleague, the Minister for the Environment, Heritage and Local Government informed the House on 10th December 2009 that he would be bringing forward proposals as a priority for the installation of water meters in households. These proposals, which the Minister is currently finalising, will give effect to the commitment in the Renewed Programme for Government to introduce charging for domestic water use in a way that is fair, significantly reduces waste and is easily applied. I understand that the Minister's proposals will include draft legislation to remove the prohibition on charging for domestic water services while also addressing arrangements for the delivery of the metering programme, cost estimates and how these costs are to be financed, as well as plans for the development of a pricing structure for domestic water services. Further details on these matters will be made available following their consideration and approval by Government.

The introduction of a metered charging regime for water services will promote increased conservation of water resources. Reducing consumption will help to reduce the very significant costs currently being faced by local authorities in providing supplies of high quality drinking water and treating waste water discharged into the public sewerage system.