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Finance Bill 2014: Second Stage (Continued)

Tuesday, 4 November 2014

Dáil Éireann Debate
Vol. 856 No. 1

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  7 o’clock

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath I welcome the opportunity to speak on the Finance Bill 2014, which gives effect to the measures announced in budget 2015. It is just three weeks since the budget was introduced, though it must seem like a lifetime ago for many Ministers given that they have been mired in controversy over water charges since then. Anyone who watched the news on RTE today could not but conclude that the handling of water charges and Irish Water is becoming a bigger shambles day by day. Confidence is ebbing away, not just in the handling of water charges but in the Government, and it has now become a defining issue for the Government in terms of whether it can get to grips with the issue of water competently and comprehensively. What the Tánaiste said today represents a shift from the stated position of the Government.

We were told the Commission for Energy Regulation set the prices and that a family comprising two adults and two grown-up children living at home would receive a bill of €483. The Government said it had no influence over the rates, yet today the Tánaiste told the House the bill would be less than €200. Even deducting the €100 tax relief from the €483 charge still leaves a bill of €383. The Tánaiste is, in effect, signalling that the bill will decrease by more than half. Let us wait and see what happens when an announcement is made in the next week or so. The window of opportunity for the Government to get to grips with this issue is narrowing by the day. It has now become a defining moment for the Government.

The Minister was quite perceptive drawing up his Finance Bill when he decided not to include tax credits in regard to water charges. Given that it has already been suggested that the proposed €100 tax credit would be available to all taxpayers regardless of the size of their bills and the likelihood that further changes are set to be announced, it is distinctly possible that the final package will be considerably different from what was originally proposed. In fact, I count that there have now been eight changes to the water charges regime since the original charging structure was announced on 8 May. We will probably get to double figures before the issue is finally resolved.

When the Minister does get to bring forward his proposals on Committee Stage in respect of this Bill, and assuming water charges have not been abandoned completely by then, I would suggest that he make provision for the water charges tax credit to be deductible at source, as already happens with mortgage interest relief and private medical insurance. Irish Water is already a bureaucratic nightmare. We do not need to tie up the Revenue Commissioners' time with a massive administrative task in respect of water charges tax credits. I note that the latest suggestion coming from sources within the Labour Party, in particular, seems to be that the Revenue Commissioners should be given complete responsibility for the collection of water charges. I am opposed to that and I cannot see how it can happen, given that Irish Water has been set up as a commercial State company which has no direct relationship with the Revenue Commissioners. It is not open to the Revenue Commissioners to start collecting charges for the ESB, Bord Gáis, Irish Water or any other utility company. That is not its function. When it was first announced that tax relief would be given in respect of water charges I was suspicious that it could become a stepping stone to the Revenue Commissioners' taking over responsibility for the collection of water charges. When one listens to some comments from Government sources in off-the-record briefings, one would have to wonder if that is where this will end up. The Government knows that people respect and fear the Revenue Commissioners in equal measure. I cannot see how an entity such as Irish Water, which is off-balance-sheet, can have its bills collected for it by the Revenue Commissioners. It is not there to collect bills on behalf of third parties.

The Government needs to clarify the issue. The Minister for the Environment, Community and Local Government, Deputy Alan Kelly, did not rule out such a move when asked about the matter today. It seems to be incompatible with the current structure of Irish Water. The Government should be absolutely clear regarding its intentions for the future role of the Revenue Commissioners in regard to water charges, because people are becoming increasingly suspicious.

I repeat the view I expressed on budget day - namely, that the Government has been somewhat premature in its decision to swerve from a planned €2 billion adjustment to a €1 billion giveaway in budget 2015. I would, if I had had the opportunity to do so, have introduced an essentially balanced budget.

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