Thursday, June 2, 2011

Ireland -Joe Duffy’s Liveline discusses Property Tax and Water Charges June 2, 2011

Much  of today’s programme was taken up with a discussion on the proposed introduction of water charges and property tax.
First of all lets look at the background to this discussion:
Minister for the Environment Phil Hogan has announced that an "interim household charge", will be introduced in next December’s budget as a precursor to a property tax.
The EU/IMF bailout programme signed by the outgoing Fianna Fail government obliges the Government to introduce a property tax next year and increase it the year after.

However the Government must put in place a comprehensive property valuation system before it can introduce the property tax.

The interim charge will be introduced on a "flat-rate basis", meaning all households will pay exactly the same amount until a comprehensive property tax is introduced. The money collected will be "ring-fenced" for local Government services, such as fire- fighting, libraries and other amenities.

Mr Hogan emphasised that there would be exemptions for those "who are on very low incomes, on social welfare or are under pressure in terms of their mortgages".
The IMF/EU bailout signed by the last FF government commits Ireland to introduce water charges by 2013.

 Mr Hogan said no water charges would be levied until the meter installation programme was complete, which could take up to three years.  Each person will have a free allowance. It is expected to be about 10 litres daily.
He said “ I see it as a very important water-conservation issue where there's a substantial amount of money being wasted through poor pipe networks but, equally, through individuals and businesses not engaging in water conservation to the extent that they should," he said. "There are too many people wasting water at the moment."
A state-run company, Irish Water will be set up by the end of the year to oversee the metering programme.
So in short under the IMF/EU deal Ireland is COMPELLED to introduce water charges and a property tax  if it is to draw down funds from the  deal

Now let's analyse the Liveline programme today:
Several speakers were practically hysterical on the issue. All with one exception were vehemently opposed to  water charges and property tax.  One contributor could not understand why he should not have free water  for his fish. Another saw no problem watering the lawn.  Several  stated that they would not  pay the taxes.This is of course illegal as far as I am aware.  This was not teased out

Now the provision of water is a costly business costing the taxpayer one billion euro annually. NO mention of this was made in the programme The impression was given  that taxes were  already paid to cover the cost of water provision. This is utter nonsense. Ireland is running a deficit of 19 billion euro. It is spending 19 billion euro  MORE on health, social welfare and general state services than it is taking in, in taxes. That is our structural deficit. Joe Duffy wished to place all  blame for  our problems on the bank bail out. That is factually incorrect. The  structural deficit would exist bailout or no bailout. It PREDATES  it.
Some callers were   concerned for sons/daughters who had  taken out mortgages and had run into difficulties. That is a legitimate concern.
Now lets look  again at what the minister actually  said in relation to these mortgage holders and the poor:

He  emphasised that there would be exemptions for those "who are on very low incomes, on social welfare or are under pressure in terms of their mortgages"
Again the programme failed to mention this.  

We are depending on foreigners to keep us afloat. If we refuse to introduce water rates and a property tax the IMF/EU will cut off funds. This would result in a 40% cut in wages, social welfare and closure of hospitals and a slashing of old age pensions. This is what happened in Latvia. We have Hobson’s choice.


Shay Conway said...

Water charges are an inefficient tax. Clean water falls from the sky and is soiled by farming activity.... more on

John Barry said...

Not the full picture. You forgot to mention industrial pollution and sewerage from towns and septic tanks.