Wednesday, 8 June 2011
Seanad Éireann Debate
I welcome the Minister for the Environment, Community and Local Government, Deputy Phil Hogan. This is the first opportunity I have had to congratulate him publicly on his appointment. I wish him well in the years ahead.
Fianna Fáil has tabled this motion in an effort to do what the Government has not done, clarify its plans to establish a national water authority and to introduce charges for domestic water services. The Fine Gael and Labour Party programme for Government commits the Government to the establishment of a State company, Irish Water, which will take over responsibility for all water services from the 34 local authorities. This was to be accompanied by the fitting of meters to houses and apartments.
This aspect of the programme for Government has the support of the National Competitiveness Council, the Economic and Social Research Institute, ESRI, and the Organisation for Economic Co-operation and Development, OECD, which have been urging the reinstatement of water and property charges for some time. They maintain that in the present economic circumstances such charges represent vital sources of income for investment and for correcting the public finances. These same areas were identified during talks with the European Union and the International Monetary Fund, IMF, in which it was agreed by the Government that a site value tax would be introduced in 2012 and be completed by 2013. An interim fixed household charge of €100 per annum would be introduced in 2012 and a full value-based addition would be introduced in 2013, with the introduction of a scheme for the metering of water in the domestic sector with charging for domestic water by 2014.
In recent weeks we have heard the Minister, Deputy Hogan, as well as the Taoiseach and other Government spokespersons blame the last Government for the necessity to introduce an interim household utility charge. This is wrong. Yes, commitments were given in connection with the EU-IMF bailout that required the establishment of property and water charges, but Fine Gael’s commitment to charges long predates this. In March 2010 Fine Gael called for the introduction of water metering and water charges. In fact, in its New Politics document, published in March 2010, it proposed a system of water charges whereby everybody would be allocated a water credit with water meters in every home. Householders would be charged for consumption in excess of the credit. Fine Gael has consistently supported the rolling out of water charges; therefore, blaming the last Government and the European Union and the IMF for tying us into these charges is disingenuous on the part of the Minister and his colleagues.
These issues are now the responsibility of the Minister and the current Government and as unpopular as these charges might be, they should be explained and defended by the Government, not used as a political tool in the popularity stakes. I am not saying the introduction of these charges will be welcome. They will be anything but welcome but we in Fianna Fáil believe the charges should be fair. When the economy went into recession there was general agreement that those in a financially better position should contribute a larger portion to our economic recovery and to the creation of employment opportunities. Implicit in this was the belief that those in less fortunate positions should pay at a lesser rate and in cases of severe hardship nothing at all.
In what would appear to be an acceptance of this principle, Fine Gael in the run-up to the general election stated it would not charge people for water until meters were installed. This commitment is repeated in the programme for Government but we are here today to discuss water charges because of the conflicting information coming from Government spokesmen who cannot seem to agree whether charges are to be implemented next year or on the form these may take.
What is the Labour Party’s position on proposed water charges or on the introduction of a flat-rate charge? Speaking to the Irish Examiner on 28 June 2010, the Tánaiste, Deputy Eamon Gilmore, said he was totally against water charges, stating a flat household charge would be unfair because it does not discriminate between houses with five bathrooms and none. He said metering was unworkable. As recently as October 2010 he said it should be possible to phase in water charges on a metered basis but only as part of a broader reform of how we manage and deliver this vital environmental resource. In an interview with Newstalk on 26 January 2011, he said a flat rate water charge was not going to be introduced.
We now know, however, that the Government intends that two new charges will come our way; a household utility charge by 2012 and water charges by 2013. Nowhere in the programme for Government does it mention a household utility charge. What happened to fairness, what happened to looking after the less well-off in our society? Nothing we have heard from Government sources in the past week has served to allay the fears and concerns of many less well-off persons who fear the introduction of draconian taxes. Nor has the Government convinced us of its commitment to fairness. Instead of leadership and unity of command, we have seen confusion and disagreement in Government. Far from clarifying the Government’s intentions on such important issues, Ministers have engaged in a blame game in an attempt to divert attention from Cabinet difficulties.
Today we need clarity and certainty, not confusion and doubt. Some weeks ago, when the Minister of State, Deputy Fergus O’Dowd, announced that water charges would be delayed until metering had been completed, the Minister for the Environment, Community and Local Government quickly indicated that a flat-rate water charge would pay for the cost of installing meters. Within days he changed his mind on the grounds that a decision had yet to be taken by Cabinet. Now he is suggesting a wider utility tax, to embrace both water and property. This obvious lack of cohesion within the Cabinet is dangerous and creates unnecessary tensions and instability at a time when stability and leadership is required. It is imperative that Fine Gael and the Labour Party learn the meaning of the phrase “joined-up Government” and work together as a unit to bring clarity and certainty to the matter.
Fianna Fáil in government outlined its plan to fund our water infrastructure in the years ahead. We outlined our plan to introduce domestic water charges for households in the next four years. This would be preceded by the roll-out of water meters which, as stated in the national recovery plan, would be funded from the National Pensions Reserve Fund. The installation of water meters will strengthen the capacity of local authorities to manage their water distribution networks, lead to greater incentives for households to conserve water and provide the necessary additional funding to improve the network.
Water metering will undoubtedly lead to a radical transformation in the way people use and view water. It will provide value for money for consumers and also provide a customer service focus in the management and provision of water services. The roll-out of water metering will result in much needed jobs in the construction sector. We estimate that it could create between 1,200 and 1,800 jobs between 2012 and 2014.
Senator Brian Ó Domhnaill: Without going over the ground covered in Senator Diarmuid Wilson’s concise presentation, I want to add to what he has said about the position being adopted by the Government. The Government parties seem to be acting in isolation, with the Labour Party expressing one view and Fine Gael expressing another. There is no coherence on the issues of water charges and the domestic utility charge.
This issue has caused huge discontent in the last ten days. People have contacted me about this because they are already in a precarious position when it comes to trying to balance the household budget, to pay the bills and the mortgage. The new Government, after less than three months in office, is coming up with a new charge, the utility charge, to be levied on people because they have a home. That home might be in negative equity, but that is not being taken into consideration. People who have invested in a home will face a charge for it.
Senator Wilson outlined how that was not the position taken by the Government ahead of the last general election. The Tánaiste, Deputy Eamon Gilmore, stated three weeks before the election that a flat rate charge would not be contemplated or introduced by the Labour Party. Fine Gael stated it would not introduce any charge other than one for water after the installation of water meters. The two parties went before the people on those positions but after receiving their votes, they changed their minds and we are now looking at the introduction of a utility charge in 2012.
The Government can blame the European Union and the IMF but their position seeks the introduction of water charges on a consumption basis. Fianna Fáil stood on that platform during the election and we were frank with people, saying we would introduce water charges but only after the installation of water meters and that people would only pay for the water they use. If a utility charge or rate on houses is introduced, the same charge is levied on an 85 year old woman living in poor and isolated conditions as on someone living in a €5 million mansion in Dublin 4. That is not equality. Is that what the Labour Party proclaims to be equality in the new Government? My party was sitting on the other side of the House three months ago and Fine Gael and the Labour Party were sitting on this side. Those parties made sure they proclaimed their view of equality and this is not what they proclaimed equality represented. Has the new Government lost its view of equality because it has captured power or is it that power is more comfortable than explaining equality? Fianna Fáil Members of this House have moved this motion tonight because we want to see clarity brought to this issue. We want to see the Government reflect on this matter. While there are difficulties with the public finances, equality in the restoration of public finances does not come about by charging the same amount to someone earning €180 per week as others. The charge is proclaimed in the newspapers as €170 per house. Does that mean that a person living on €150 or €170 a week in a small bungalow, struggling to get grants to fix their windows, must pay that amount while someone living in Dublin 4 in a €5 million mansion is asked to pay only the same amount? That is not fair. This should not be exploited to repair the public finances and meet the demands set under the EU-IMF bailout.
I am delighted my party has brought forward this motion. I hope the Minister can clarify the position of the Labour Party, Fine Gael and the Government. Will the roll-out of these charges commence in January? Fianna Fáil will not support that position. If charges are to be introduced for the provision of water, a number of measures are needed in the interim. Meters must be rolled out at a cost of €500 million. Fianna Fáil welcomes the roll-out of meters and the employment it will create. That is the party position. We also want to see the water network in each council area improved because there are so many leaks in the water system. Antiquated pipes in rural Ireland need to be replaced. There must be investment before the charges can commence.
We are in a difficult financial situation but burdening people who cannot afford to pay is not the correct way to go about this. If the Government’s proposed utility charges, stealth charges, domestic rates or whatever are to be introduced in January 2012, which Fianna Fáil vehemently opposes, perhaps the Minister will clarify the level of charge proposed or contemplated. Is it €100, €500 or something in between? We must be up-front with the people. People must be afforded the opportunity to plan for the burden the Government will throw their way in January. People do not have the money unless they plan financially. I support the motion tabled by Senator Wilson. Fianna Fáil will vehemently oppose any move towards a utility charge or domestic charge before the necessity to introduce such a charge under the EU-IMF facility. That will only happen if meters are introduced before that. That will probably occur in 2014 or 2015.
Minister for the Environment, Community and Local Government (Deputy Phil Hogan): I am glad to be in Seanad Éireann, which I have not been in since 1989. I was a Member from 1987 to 1989 and I take this opportunity to congratulate all Members of the House on their recent election or appointment. I wish them well in their term of office. I thank the Senators from the Fianna Fáil Party for giving me this opportunity to speak on this motion and its amendment. I am glad to clarify the position of the Fianna Fáil Party and the Government. I remind the House what the previous Fianna Fáil-led Government agreed last December with the European Union and the IMF through the following direct quote from that agreement: “The government will have undertaken an independent assessment of the transfer of responsibility for water services provision from local authorities to a water utility, and prepare proposals for implementation, as appropriate with a view to start charging in 2012/2013.” It is interesting that Senator Brian Ó Domhnaill opposes the introduction of a charge in 2012, even though his party agreed to it in December. The previous Fianna Fáil-led Government’s ill-fated national recovery plan, published in November 2010, proposed the introduction of domestic water charges to achieve what the plan described as “significant” operational and capital savings. Given that these were commitments made by a Fianna Fáil-led Administration, I am amazed at the collective amnesia being demonstrated by my good friend Senator Diarmuid Wilson.
Deputy Phil Hogan: The reason Fianna Fáil was forced to agree additional property taxes and water charges was the ceding of our economic sovereignty arising from the disastrous policies pursued by previous Fianna Fáil-led Governments. I am surprised two Members from Border counties do not understand the significance of this. Their party introduced the universal social charge.
Deputy Phil Hogan: I do not know where equality or fairness comes into that charge. That will not be the case with water charges by metering or the household charge to be introduced in lieu of the property tax agreed in the same EU-IMF programme. The programme for Government agreed between Fine Gael and the Labour Party provides for progressive and considered structural reforms of the water services sector in Ireland and these reforms are important elements of the Government’s strategy for restructuring the semi-State sector under the NewERA policy. Our intention is to have a modern, adequately resourced water services sector which will manage and deliver critical infrastructure to support economic recovery and employment creation. The Government position is that water charges will be introduced but only by metering. There will be no flat-rate water charge.
Deputy Phil Hogan: I did not interrupt the embarrassed Senators. We need a more fundamental shift in the way water services are organised and funded in Ireland. I cannot be more clear in what I said. It is important to acknowledge the considerable efforts of the local authorities to improve services but last week we saw restrictions imposed by Dublin City Council and other Dublin local authorities on the water resource we have. People must understand water is a finite resource. It is not the Government’s intention to discard the expertise and knowledge built up in the local authorities. On the contrary, we want to ensure that expertise and knowledge are being deployed strategically and efficiently to meet the significant challenges facing the sector. The adoption of river basin management plans last year marked an important step in the implementation of the EU water framework directive and provides the strategic direction for much of our future actions and investment in the sector. The move to a river basin catchment approach to water resource management will require greater co-ordination in the planning and delivery of all aspects of water services. The establishment of Irish Water, the new State-owned water company, is a priority for me and the transfer of functions from local authorities to the new company needs to be carefully managed. My Department is overseeing an independent assessment on the establishment of the new company, Irish Water, which will be completed this year. This will examine the optimum role of the new company and assist in defining the functions to be assigned to it. The assessment will also make recommendations on how specific areas of work are to be transferred from the local authorities to the new company. The independent assessment, which is to include detailed implementation issues, will be completed by the end of October this year. After that I will be able to bring proposals to the Government on the establishment of that new entity, Irish Water, before the end of 2011.
We have invested heavily in improving our water services and even in the current difficult economic position the Government is continuing to give priority to investment in this area. A provision of €435 million is being provided from the Exchequer this year, and this investment is required not only to expand infrastructural capacity but also to upgrade the water supply distribution network to tackle uneconomic levels of leakage and improve operational efficiency.
We have a very diverse water supply system, with over 950 public supplies producing some 1,600 million litres of water daily through a network of 25,000 km of pipes. The extent of burst water mains places a particular focus on the vulnerability of the Irish water distribution system, in particular given its age, the high levels of leakage in the system and the lack of investment historically in mains rehabilitation. The focus of Exchequer investment in water services in recent years has been on ensuring compliance with the European directives on both drinking water standards and urban waste water discharges, as well as improving water supply to keep pace with population and economic needs, with total investment exceeding €6 billion over the last decade.
The current water programme provides for increased investment in critical mains rehabilitation with contracts to the value of €320 million set to commence over the period of the programme. This represents more than double the investment of €130 million in the last programme period from 2003 to 2009. This investment is essential to address the unacceptable levels of leakage from our water mains, or so-called unaccounted water. We cannot continue to tolerate a position which allows such high volumes of water, treated to a high standard at great expense, to be unaccounted for.
The cost of providing water services in Ireland has increased significantly. Increased investment in new treatment plants for drinking water and wastewater has increased the operational costs for local authorities. More stringent environmental legislation and rising energy prices have also contributed to the increase in costs. It is clear that the previous policies of providing water free, with no incentive to manage usage, is not sustainable. The OECD published a report in 2010 that specifically highlighted the difficulties being caused by our failure to charge households for water based on usage. The OECD noted that Ireland’s failure to install water meters gives households zero incentive to save water or to minimise waste in the form of leaking pipes, running taps and other wasteful uses such as the unnecessary use of garden hoses.
The OECD also advised that the failure to measure water use perpetuates the public’s low awareness of consumption levels and the real cost of water services. The OECD went on to observe that water metering will also remove the inequity between households. A house with large gardens, for example, or even a swimming pool will pay significantly more than a smaller household with average consumption. The OECD concluded that the absence of water metering contributes to a lack of incentives in the planning system and in building regulations and practices to focus on the water economy, with rain water harvesting an example. I see the introduction of water charges through metering as an essential water conservation measure to deal with a finite resource and to help businesses and households have a good quality water supply. It will also ensure we have plentiful water to help in attracting inward investment to the country in the years ahead, and it will provide essential employment opportunities for our people.
We recognise there are weaknesses in the current funding model for water services. The programme for Government provides for the introduction of a fair funding model to deliver clean and reliable water. A new system of water charging for households on public water supplies will be introduced based on usage above a free domestic allowance from 2014.
International experience is clear in showing that water metering can achieve significant reductions in consumption. In Denmark, a reduction of 12.6% in household consumption was achieved in the period between 1996 and 2007 following the introduction of water meters, with the promotion of water saving devices. I recently attended a conference in Croke Park where a speaker from Southern Water in the United Kingdom highlighted how universal water metering in the Isle of Wight had reduced consumption from 160 litres per person per day to 124 litres per person per day, a reduction of more than 20%. Research carried out by the Dublin local authorities estimates average customer side leakage at 65 litres per property per day and, in some locations, this could be significantly higher. Evidence from the National Federation of Group Water Schemes suggests much of the water lost from the group water scheme through leakage is on the customer side, where metering is helping to reduce leakage.
The installation of water meters will ensure leaks can be identified and fixed, and metering will therefore achieve significant reductions in the volume of water required to be treated every day and lead to savings in the operational costs of delivering water services and in deferred capital expenditure. Moreover, it will lead to other environmental benefits, such as reduced abstractions from our rivers and lakes and in reduced carbon emissions from lower energy consumption.
In line with any significant policy issue submitted to the Government, the potential impacts on low income households and other vulnerable groups will be taken into consideration. As set out in the programme for Government, all households will be provided with a free allowance of water, with charges only applying to usage above that allowance. My Department will also be developing a public awareness campaign to inform households of actions which can be taken to reduce their consumption and hence the cost of the water being used.
The creation of Irish Water and the introduction of a system of water charges based on usage will transform the provision of water services in Ireland. In these difficult times, we must deliver our services and use our resources more efficiently; by delivering on the commitments in the programme for Government, we can ensure this happens. To put it at its mildest, it is disingenuous for the Fianna Fáil group of Senators to table this motion and conveniently forget what they had previously, while part of the Government, committed us to doing. The new Government will implement its own proposals for water services reforms in a much more considered manner than our predecessors ever managed to. I ask the Fianna Fáil Senators to withdraw their motion and save themselves political embarrassment in doing so. This will ensure that the political honesty expected in the Upper House will be maintained.
Senator Brian Ó Domhnaill: On a point of order, the issue we raised in the motion has not been addressed at all. In November last year, before the last election, Fianna Fáil was up-front with the people about introducing a water charge only after meters were installed. The motion brought forward by Fianna Fáil Senators——
Senator Brian Ó Domhnaill: The motion concerns a household utility charge, which was not in our election manifesto. There will be a household utility charge from January and there has been no clarification in the Minister’s address.
Acting Chairman (Senator Feargal Quinn): That is not a point of order but the Senator will be able to make that point later. If there is no speaker from the group of Taoiseach’s nominees or the university Independent group, the Senators from Sinn Féin may make their contribution. I believe the party will be moving an amendment.
Beidh mise ag moladh an leasú ar an rún. Ar dtús báire, ba mhaith liom míle fáilte a chur roimh an Aire. Guímis gach rath air ina chuid cúramaí nua mar Aire. Tá a fhios agam go bhfuil cúramaí móra air.
Bheinn buíoch dá bhféadfainn nóiméad a thógáil le buíochas faoi leith a ghabháil leis an Aire maidir le fógra a rinne sé inné a bhaineann le cúrsaí uisce, is é sin scéim réigiúnach uisce Chasla i gConamara. Táimid ag fanacht leis an scéim sin le beagnach 30 bliain. Is iomaí Rialtas a tháinig agus a d’imigh agus nár cheadaigh an scéim siúd. Throid muintir Chonamara go láidir le go mbeadh uisce glan againn agus le go bhféadfaimís ár gcuid páistí a ní, an t-uisce a ól agus ár gcuid gnóithí a dhéanamh i gceart. Is mór an lear go dtáinig an cinneadh inné, go bhfuil an scéim sin ceadaithe agus gur féidir dul chun cinn leis. Is é an trua gur thóg sé 30 bliain orainn teacht chomh fada leis seo.
I thank the Minister for his announcement yesterday relating to the Casla regional water scheme, which is pertinent to today’s debate. We have been waiting for the scheme for 30 years. The Connemara communities in which we live have not been able to drink the water or use it to bathe our children for almost 30 years. The pressure to introduce the scheme arose because the State was not fulfilling its obligations under the EU water directive. I thank the Minister for rubber-stamping the scheme but it is indicative of the state of water in Ireland that people have to fight for a basic utility to which they have a right.
Sinn Féin moves the amendment to the motion because we reject the proposal to introduce household water charges. There is an obligation on the Government to clarify its intentions at the earliest opportunity, in which regard I welcome the Minister’s statement. It needs to explain the nature of the charge and how the rates and allocations will be calculated for families and households. We tabled the amendment because we believe other issues arise in addition to those outlined in the motion and we desire to bring them to the notice of the Seanad.
We fully understand the vital nature of water and water provision. Water is a valuable and precious natural resource which needs to be carefully conserved. We recognise that it can on occasion be a scarce resource and while we have had some difficulties in regard to water shortages in this country, its scarce nature is even more apparent abroad. There is no argument that we need to implement measures to ensure we do not waste this valuable resource but it is lazy and illogical to assume that this automatically validates the case for water charges. It is not sensible, fair or necessary to insist on making the citizens of this country pay twice for this essential service. We maintain that a more sensible and just remedy is available to us.
I ask Senators to consider two alternative scenarios. We could introduce water charges to domestic dwellings and spend €500 million on installing water meters in all Irish homes. We can thus double charge all the households in the country for a service that they have enjoyed, and ought to enjoy, as a right. We would thereby inflict further hardship upon families who are already struggling as a result of reduced wages and welfare payments, the appalling universal social charge and services which are falling apart. In short, we can push many more families over the brink to greater poverty. Alternatively, we could look at our water provision infrastructure. We could decide that our leaky water system is the problem given that 58% of our water supply is wasted through leaky and damaged pipes before it even reaches our homes. The €500 million cost of putting water meters in place in 1.1 million homes would be better spent on fixing this leaky infrastructure, without hitting the least well-off yet again.
Given the choice between these scenarios, it is clear that a sensible or community-minded person would choose the latter. It is more equitable by far to fix the pipes than to introduce charges. Some will argue, bizarrely, this does not make sense and that a €500 million investment in water meters makes perfect sense. It is not solely our view that the economic sense of improving our water infrastructure is clear. The local government review group advises that active leak management is more than self-financing. It would offer additional benefits because an improved water infrastructure system would help to prevent the type of difficulties we faced in the recent cold winters or the public health problems that arose in Galway and elsewhere on foot of the cryptosporidium outbreak in 2007. Improving our water provision infrastructure is an investment that will stand to us for years to come. Water charges will do nothing except heap further misery on our citizens and create economic hardship, as my colleague Senator David Cullinane will explain. I ask Senators to consider this prospect and to support our amendment.
Cuir síoda ar ghabhar agus is gabhar i gcónaíé. This evening’s debate highlights that seanfhocail. We have seen the before and after scenarios of the Government and its predecessor but the policies they have put forward are equally unfair to those on lower incomes and those who are struggling with the range of charges that have been introduced as a result of the EU-IMF bailout. If meter charges are to be accompanied by a free allocation, I ask the Minister to clarify how the allocation will be calculated on a fair and equitable basis, whether it will take into consideration unemployment levels, particularly in rural areas where the water infrastructure is of a lower standard than in urban areas, and how it will be affected by the universal social charge and the health levies that are hammering poor families. Sinn Féin opposes water fees, whether in the form of metering or a flat charge, because the people of the country have a right to basic services such as water regardless of their background or economic situation.
Senator David Cullinane: I second the amendment. I welcome the Minister’s appointment as someone from the south east. My wife, who is a councillor in Kilkenny Borough Council, recently attended an event at which he was honoured but I hope he will look after Waterford as well as Kilkenny in his role as Minister.
I agree with him that Fianna Fáil Members have brass necks to set out their opposition to water charges or speak about fairness, justice and equality given what they have done to this country. They have introduced charges which have devastated working families and caused hundreds of thousands of people to lose their jobs. More than 100,000 young people have left our shores through forced emigration because of the last Government’s surrender of our sovereignty.
Senator David Cullinane: I will explain what Sinn Féin would do. No one interrupts the Fianna Fáil Senators but they have a habit of interrupting everybody else. If Senator Brian Ó Domhnaill gives me the opportunity, I will spell out exactly what Sinn Féin would do.
Senator David Cullinane: The Senator is addressing me. People voted for change and, in fairness to Fine Gael, it was upfront during the election campaign in regard to supporting water charges. However, the Labour Party was not as upfront or purposeful before the election. It campaigned against the universal social charge, which has devastated a considerable number of families, but it appears to be prepared to support a universal water charge which will impact on the same families. I am sure the Minister viewed the recent “Prime Time Investigates” programme which vividly described the impact of austerity measures, cuts in wages and benefits for low paid workers and those who lost their jobs through no fault of their own. Those of us who work in our communities are already familiar with the human face of suffering and I do not understand how further stealth taxes or water charges introduced under the guise of conservation can have a positive impact on these families. The Minister will be aware that approximately 58% of all water in the system is unaccounted for and lost. As Senator Trevor Ó Clochartaigh said, the Minister stated in response to parliamentary questions tabled by Sinn Féin that it would cost €500 million to install meters. Why not invest that amount in repairing the water infrastructure? That would be a much better way of spending the money rather than going after the same people over and over again.
Senator Brian Ó Domhnaill asked about Sinn Féin’s alternative proposals. The water and utility charges are about collecting more taxes, not about water conservation. The genesis of the charges is the IMF-ECB deal. The Minister may smile, but he knows this is about collecting taxes. Before the general election campaign, the Labour Party, for example, supported Sinn Féin in calling for a 48% third rate of tax on all incomes in excess of €100,000, which would bring in €400 million. It abandoned that policy following the election. We also called for a 1% wealth tax on all assets valued in excess of €1 million and for all tax reliefs to be available at the standard rate of tax because that would save €1 billion. The previous Government wasted so much money and did not deal with public service waste. For example, recently it was reported that the HSE paid people twice and three times for work they did not even do. Such waste needs to be eliminated; that is what the Government should be focused on.
The Taoiseach said the general election was a political revolution. Political revolution means profound change. There is no change coming form the Government. It is slavishly implementing the previous Government’s policies on water charges and stealth taxes and going after the same people who have been hit over and over again. As I stated recently in the context of the JLCs, the same agenda is being pursued by the Minister’s party to cut and undermine the wages of low paid workers. Every €1 he takes from the pocket of low paid families, including in his own constituency, will be taken from the tills of local retailers. That is the reality.
Senator David Cullinane: The Minister is taking money from the pockets of people who do not have it to give. He is giving with one hand and taking away with the other. Fine Gael is ready to do this and is supported by the Labour Party.
I call on Independent Members and those who advocate on behalf of all those who are marginalised in our society, who have been let down by the crowd who made a mess of the country in the first place and who will be let down by the current Government——-
Senator David Cullinane: We are borrowing hundreds of billions of euro to pay back speculators and gamblers, yet the Government is saying people have to pay more in stealth taxes. We are borrowing money to pay back the gambling debts. This process was begun by Fianna Fáil and is being continued by the Labour Party and Fine Gael. The same people who have been crucified and hurt so much in recent years should not be asked again in the next five years to shoulder the blame and responsibility. The Government should not take more money out of their pockets which they do not have to give in the first place. That is why Sinn Féin opposes the water charges Fine Gael and the Labour Party are proposing to bring in.
Senator Cáit Keane: Cuirim fáilte roimh an Aire agus gabhaim buíochas as an méid atá ráite aige. Bhí mé ag éisteacht leis an Seanadóir Ó Clochartaigh ansin agus luaigh sé an gabhar agus an síoda. Níl an gabhar agus níl an síoda ar an taobh seo Tí ach tá na Seanadóirí ar nos an ghabhair dhaill ar an taobh sin den Teach agus é ina luí.
Senator Cáit Keane: If the Senator will allow me the courtesy of being able to say a few words, he can then tell me who engaged in the speculation. We all know who said what because the media have covered the issue. The Minister has responded loud and clear and given a good insight into what is proposed. The final decision has not been made, but we have been informed about the level of the free water allowance and the Minister referred clearly to the agreement with the European Union and the IMF.
It is clear there is much scepticism among householders who will pay this charge, but many of them are sensible about water and not as fearful. We should respect their intelligence, given that many environmentally friendly people will wonder what we are on about and whether we know water is a finite resource. It comes out of the sky, but it has to be treated, which is not cost free. Those who take this line of argument do not respect the intelligence of the public.
Introducing water meters carries a cost. If this issue had been grabbed by the horns years ago during the construction boom and developers had paid for the installation of water meters, none of us would have to pay anything now. That should have been done, but Fianna Fáil was afraid to do the right thing at the right time when it could have been done easily and developers would have paid for it. The party’s Senators should not pretend to be sad about it now.
The Minister referred to the memorandum of understanding between Ireland and the European Union and the IMF which commits Ireland to introducing a domestic water charge no later than 2013. I would like those who oppose this to outline how can the issue can be addressed if funding is not available. A sum of €500 million could be well spent on the poor to provide them with additional facilities. However, I am pleased that funds raised from the charge will be ring-fenced for local government services. Those of us who have served in local government are calling for the ring-fencing of funding to be spent locally at the discretion of local authorities.
When the charge is introduced, households will be able to avoid paying it if they do not squander water. There are two ways of looking at this debate — is the glass half full or half empty? A number of Senators referred to the charge as a stealth tax. I am tired of listening to that assertion, given that this is a conservation and environmental matter and water treatment must be looked on in that light. We do not discuss electricity as if it were free coming out of the ground. We pay for it and the same principle should apply to water metering. The status quo cannot continue because it is costing the State more than €1 billion annually to supply water and provide waste water services.
Luadh ansin an scéim nua ag Conamara i gCasla agus tá mise an-bhuíoch as an scéim sin. Chosnaigh an scéim sin €15.5 milliún. Cá bhfuair muid an t-airgead sin? That money did not drop out of the sky. It cost €15.5 million to install the new water scheme in Connemara. We have to ensure those who do not have access to treated water are facilitated. We cannot treat one cohort of the population as half citizens and leave them with poor quality water, while treating other citizens differently. Many households pay a water charge currently; therefore, the Minister’s proposal is not a new concept for them. We would have more money for job creation and businesses if there was a level playing pitch when introducing charges. We are talking about being pro-jobs and pro-business. We would have more money to put into creating jobs and helping businesses if there was a more fair and equal dividend.
Senator Cáit Keane: Yes, it is. There would be a significant environmental benefit to the State in not having to treat as much water. That has been shown by a cost-benefit analysis and it has also been shown that there would be a carbon-saving element also. I refer to electricity, chlorination and other water treatments with which we are polluting the environment. We pay a great deal of money for that and savings could be made in that regard. The Government spends €1 billion on water treatment facilities and has plans to invest a further €1.5 billion on upgrading the water supply infrastructure.
An important part of the motion refers to leakage. I disagree with the motion but accept that leakage occurs. Statistics based on research carried out by South Dublin County Council indicate that the current average daily water consumption per person in this country is more than 148 litres. That is mad. We must educate people to reduce water consumption. Education is required on water harvesting and minimisation of use in addition to water treatment and leak reduction. It is not an either-or situation, that we must have one without the other. The Minister has said both approaches will be used in tandem — minimisation, treatment of leaks and charges. The statistics indicate that the highest percentage of leaks in a county is 58% and the lowest rate is 16%. I am proud to say South Dublin County Council is the lowest. I was reminded by the Dublin city manager recently that the pipe infrastructure in south Dublin is much newer than in Dublin city or other counties. All those points must be taken into consideration.
Every other country in the European Union has a water charge. Why should we be the exception to the rule in the Union? We must educate people. As a member of the European Union we must comply with its regulations. We do not wish to leave ourselves open to fines. I could say much more on the issue. I commend those who tabled the motion for discussion.
Senator John Crown: Long after Fianna Fáil and Fine Gael have been forgotten, long after the distinction between the Independents and the “Endapendents” has been blurred, long after Béal na mBláth and Ballyseedy have been forgiven, our species will be dealing with the consequences of resource shortage. The key issue is not tax or current marginal use of wastage, it is nearly existential. We are the generation in the history of this species on this planet which will determine whether our species will survive. The major evils we are dealing with include an unsustainable level of overpopulation and shortages of critical resources which are necessary for our lives.
We have some experience in this country of intermittent paroxysms of apparent crisis over energy, typically when some international event or industrial relations dispute arises or some other, thankfully transient, event cuts off our supply of petrochemicals. We are not prepared for the real paroxysms that will occur in future generations as we go over the peak of hydrocarbon use and through our failure to address viable alternatives.
We have already seen food riots on our television screens. Thankfully, in this country we have not had systematic famine although I am not trivialising the hunger which I am sure many of our poorer citizens in this Republic have experienced during the years. We had an interesting little social experiment when the severe winter brought us to our knees. In truth, by the standards of other western countries it would have been considered climatically a relatively mild one compared with areas in most of the United States, continental Europe or Canada. We are not talking about people who had a marginal water supply in some remote part of the country, perhaps depending on some ancient and infrequently maintained water facility. I live in leafy Dublin 4, across the street from St. Vincent’s Hospital and approximately two miles from this House. Colleagues can check my allowance. I spent a large chunk of December, January and February on shortened water rations. The reason was not that people in my area were grotesquely abusing water but because the system could not cope with the shortages that occurred consequent to burst pipes.
Looking at the key question, which is water conservation, and the key priority, it seems that what we need to do before we do anything else is to fix the grid and ensure we are not wasting money. Through a process of responsible citizenship we must encourage citizens of the Republic to understand they need to pay attention to water use. Then, when we have the water grid fixed and when we know that the water supply is secure and structural waste has been eliminated, we can consider the appropriate levels of incentivisation of decreased water use.
I have a few concerns on the plan to spend €500 million on the installation of water meters. First, someone has done the arithmetic. If we are going to spend €500 million, we are going to make a great deal back in tax. I would like to know if there is some guarantee that the money which is collected will be used for the maintenance and upgrading of the water grid or, as my colleagues from Sinn Féin have just hypothesised and which is a compelling argument, whether it will just disappear into that general sink-hole of money that is funding our bailout.
In particular, I am very attracted by the notion of Roman Abramovich’s yacht, which I presume probably uses more fresh water than the average small village in rural Ireland. I wonder how much of his investment in our banking system is going to be bailed out by the money which we are paying on water charges. For all of those reasons the priorities are to fix the grid, end structural waste, inform better citizenship in the use of water resources and, when we have done those things, try to think of a fair way to incentivise decreased use. I find myself saying something that my mother would not be really happy to say: I add my support to the Sinn Féin amendment.
Senator John Whelan: I am pleased to welcome the Minister, Deputy Hogan, and the Minister of State, Deputy O’Dowd, who have taken time out to clarify the confusion that has surrounded the issue in the media in recent weeks. It is not just important that water charges are introduced, it is imperative. Such a measure is long overdue and should be done on merit, regardless of any EU-IMF bailout criteria. Of course, water charges, when introduced — an issue the Minister has put to bed this evening — must be in accordance with Government policy on the basis of metered usage over and above a free and equitable allowance.
There was a baffling suggestion in the House yesterday that somehow or other the Labour Party would act as a drag on reform and the hard decisions to be made by Government. For me, that was rich coming from a party which failed to make any tough decisions in favour of political expediency for years on end and whose laissez-faire style allowed the country to sleepwalk into its woeful financial predicament. For years on end, despite repeated and potent warnings, the previous Government grossly underfunded local government which led to a deterioration in water services. When it came to putting the country first, the ordinary decent hard-working people of Ireland, ahead of bankers and speculators, the Fianna Fáil-Green Party-Progressive Democrats Government again bottled the hard decisions on the night of 29 September 2008, resulting in the ill-fated bank guarantee scheme. It continued in the same vein of wishy-washy leadership and, while denying it in public, had already lifted the latch on the back door and invited in the IMF. The sell-out of our economic sovereignty was complete.
I have heard numerous history lessons in the House in the past fortnight, but far worse are the efforts to rewrite history. It is hard to put up with the hand-wringing and crocodile tears for the hard-pressed householder. Let me make it clear: the Labour Party will not wash its hands of the hard decisions such as the introduction of fair and transparent water charges. We will stand up for the introduction of fair and transparent water charges. I do not believe a person in a household would have a difficulty in paying for good quality water and a service that was reliable, safe and sustainable. Everything happens in a context. The historical political context to the urgent imperative to introduce water charges dates back to a previous power grasp by the Fianna Fáil Party when it was desperate to win an election and its then leader Jack Lynch infamously introduced the 14 point manifesto. The Fianna Fáil Party got its result, but in the process it sold out the country yet again and bankrupted local government. That reckless and unnecessary abolition of domestic rates and road tax is the genesis of where we are today, in requiring resources to fund vital services such as the provision of water. It is high time we put people before political profit and did not take the soft options. It is high time we put people before false prophets. There is no such thing as free water. Somebody must pay the price. If we do not introduce fair and transparent water charges to help finance the provision of the service and encourage conservation, we will pay a high price with wholesale rationing, disruption to business and the loss of foreign direct investment due to our inability to ensure the security and quality of our water supply.
As a journalist by profession, I can scarcely complain about the occasional exaggeration. I have been known to be given to the odd bit of hyperbole myself. However, in this House we cannot afford to speak out of both sides of our mouths and, on the one hand, agree in principle with the need to introduce water charges and, on the other, scaremonger with the warning that families will not be able to afford to bathe their children on a Saturday night. I come from a generation when more than one child was washed in the same bath water, but let us not throw out this baby with the bath water. I am not in the habit of buying bottled water, but as an exercise in research for this discussion and debate I found that the smallest bottle of water in the shops cost about €1. One will not wash too many children, prepare too many meals and have too many showers, much less a bath, with that drop of water, yet people gladly pay €1 a day for a bottle of water on their way to work or over lunch. It takes eight pints of water to brew a pint of beer; on average, an individual uses 155 litres of water a day and it takes 1,000 litres of water to produce a kilogramme of beef. We each use 22,000 litres of water every year just to flush the toilet. We do not expect a free pint or a free steak and we all know there is no such thing as a free lunch. How can we continue to expect to have free, clean and safe water in our home every day?
It is worth noting that whatever food source is at the end of the latest deadly E. coli outbreak in Germany, scientists now agree that the cause is probably contaminated water which kills more people worldwide each year than food shortages or starvation. To paraphrase what a Deputy said in the Dáil last week, we cannot pretend that we are all Manolos and pretend we know nothing. We know in our heart of hearts that it is not economically or environmentally possible or sustainable to pretend that we do not have to charge for a secure quality water supply and wastewater management system. We must encourage people to conserve water and, where possible, to turn to non-treated water supplies for such industrial, commercial, agricultural and domestic tasks as watering the garden or washing the family car, as appropriate. Fair and equitable charges will encourage this.
We have no water reserves and our supply levels are at the maximum. The supply-demand balance is on a continuous knife-edge. Even allowing for the best remedial actions and repair works to an archaic pipeline system, we will reach a critical shortage of water to supply the greater Dublin area by 2016 or, in the best case scenario, by 2023, leading to wholesale rationing and water shortages. We have not built a reservoir in more than 50 years, not even at the height of the boom. This is yet another example of lack of vision and leadership. Bord na Mona, one of the country’s most progressive and forward-looking organisations, has such a plan. It has a plan to build the Garryhinch eco-park and water storage treatment facility on 1,500 acres of cutaway bog on the Laois-Offaly border. Its development is vital and would solve our water supply, water security and sustainability issues for decades to come as it would be capable of supplying water to Dublin and ten surrounding local authority areas. It would be State-owned and operated, avoiding problems encountered elsewhere when such a strategic asset was privatised. Furthermore, it would set aside the need to establish yet another unnecessary quango at a time when it is Government policy to reduce the plethora of such agencies, boards and bodies.
Senator John Whelan: No, Bord na Mona should be the agency involved. We already have enough chiefs and chief executives but not enough people working. This brilliantly conceived and visionary project would create 1,000 jobs at the construction stage alone and hundreds more thereafter in its operation and spin-offs in eco-tourism and leisure activities. The capital cost of €470 million would be borne by Bord na Mona which has a superb track record in large project management and delivery in consultation with local communities and in harmony with the environment. With such a facility, we could secure safe and sustainable water supplies for households, businesses and industry right across the eastern seaboard.
These are the important strategic decisions we should be taking, embracing them and not shying away from reasonable and fair water charges. “Water is a very valuable commodity. Minimising leakage and charging for use above a certain level are a vital part of its timely conservation.” These were the words of the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, on Monday last. Government policy is crystal clear. I call on the Minister to consider my proposal to incorporate Bord na Mona in the roll-out of the water authority and water utility company.
Senator Thomas Byrne: I am glad to speak to the motion. It is important to recall its genesis, the genesis of the Hogan tax. We have heard of the Tobin tax and now we have the Hogan tax. Metered water charges are mentioned in all the manifestos of the main political parties. The Labour Party held out for a long time against them, but the Tánaiste, Deputy Eamon Gilmore, reversed course from one statement in June 2010 to another in October 2010. On 6 May the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, went on national television and spoke about a household utility charge to pay for water metering. That was the first time a household utility charge had been brought into play at any stage of the game. Then we had contradictory statements from the Minister himself, the Tánaiste and the Taoiseach. Tonight there is nothing about the household utility charge in the Minister’s statement which conveniently is presented in very dense print. There is nothing also about the property tax. The reason there is nothing about the property tax or the household utility charge in this statement is that these are a function of the Department of Finance. When my colleagues and I lobbied to stop the household charge, I lobbied the Minister for Finance. When the Minister for the Environment, Community and Local Government came out and spoke about a flat-rate household utility charge, I was very concerned because I knew immediately that it was different from the household charge the Department of Finance would propose and which was included in the EU-IMF agreement. The Minister has rolled back somewhat from that position, but not in the official speech provided for him by the Civil Service. Nothing in the statement presented tonight in the Seanad indicates that flat rate water charges will not apply and that there will not be a household utility charge, separate from the site value tax and the household charge, which I would have thought would be introduced by the Department of Finance. I do not know what the Minister for the Environment, Community and Local Government is doing dealing with a household charge, but in the previous Government the then Minister, former Deputy John Gormley, had nothing to do with it.
That is from where the confusion stems. We want to tell people that if they are against flat rate household charges, against which I have consistently been, as have many of my colleagues, particularly for water, they should support the motion. If they wish to allow the Minister to do his own thing and introduce a separate flat rate charge to pay for metering, then they should support the Fine Gael proposal. That is very clear. We are not saying people will not be able to afford to bathe their children or to afford to drink water. We are not scaremongering, but we are looking for direction and leadership. The Opposition should not be blamed for causing the confusion. Fianna Fáil’s position was very clear; it supported metered water charges and a household charge. What is the reason for supporting a household charge? In the IMF document and our stated policy document it is not to fund water metering but to readjust the entire taxation system because the taxation policies of the previous Government, of which I was a representative, were found to be wanting. We reduced income tax rates too much and the property tax base was narrowed significantly. These policies were fully endorsed and supported by Fine Gael and the Labour Party throughout the years of the boom. That is why the Fine Gael-Labour Party Government is bringing in a site value tax now. It has nothing to do with water charges. Let us keep water charges as a separate issue. Metered water charges have their advantages. However, Fianna Fáil Senators want to know if there will be a separate household utility charge, separate from the household charge proposed by the Department of Finance. That is the key question and it has not been answered. The Minister for the Environment, Community and Local Government, for all his bluster about charges, has not addressed this key issue.
The other day Senator Sean Barrett spoke about local government efficiency. I support the introduction of a new water company. Provision of water is better done at a national level. The Minister also talks about retaining expertise in local government. That cannot work. We need to provide water as efficiently as possible and staff will be transferred from local government to the new water company. This could be done in the manner of the transfer of a business. Staff will be retained by local government, creating a big issue for the Government. If we have a water company as well as separate local government water services, water charges will be very expensive, even unaffordable. It is important that the supply and metering of water be done as efficiently as possible. Water metering must pay for itself and become a mechanism to ensure efficiency, reduced consumption and reduced cost to the State.
I share some of the concerns expressed by Sinn Féin about where the money will go. There is never a reserved pot of money from specific charges. Taxation income is never ring-fenced, no matter what anyone says. It all goes into the Central Fund. Senator John Crown is right to mention this.
For all his criticism of Fianna Fáil, the Minister praised the previous Government for the investment it made in water services. He has boasted about what the Department has done. It did this under a Green Party Minister in a Fianna Fáil-led Government. We are glad the Minister has acknowledged that significant improvements have occurred. However, the confusion remains. Everyone says we will have a metered water charge. It is said the Government has not made a decision on the household utility charge. The Minister tried to say the household utility charge was, in fact, the flat rate household charge mentioned in the IMF agreement.  What does the Minister for the Environment, Community and Local Government have to do with the household charge? It is not his function. That is why I am not surprised he did not mention the flat rate charge, as it has nothing to do with his Department. Perhaps he might clarify the matter.
We have raised serious issues and I call on anyone opposed to flat rate water charges to support the Fianna Fáil motion. Those who are willing to go along with the confused position may support the Government. The confusion stems from the Government side, not the Opposition.
Senator Paul Bradford: I am glad to have an opportunity to comment on the Private Members’ motion before us. I welcome the political discussion we are having. It would be preferable to have the discussion in the form of statements than a debate on a Private Members’ motion. The attempted provocation by Fianna Fáil Senators is amusing. It must be difficult for the Fianna Fáil Party even to dream up a Private Members’ motion. It was in government for the past 14 or 15 years and had numerous opportunities to deal with these issues.
Senator Paul Bradford: Trying to reinvent history and give a nuanced presentation of politics is a difficult feat, particularly with regard to water charges or anything to do with local government. I heard my Government colleague, Senator John Whelan, speak about the 1977 Fianna Fáil manifesto. Some 34 years on local authorities are still trying to deal with the crisis caused by Fianna Fáil’s first bankrupting of the economy in 1977 and 1978.
When I entered politics in the local elections of 1985, there was only one topic on the doorsteps — service charges. The Coalition Government had introduced service charges, with the intention that domestic consumers would pay for water and refuse services. The proposal was viciously opposed by Fianna Fáil and the electoral result of Fianna Fáil’s commitment to abandon service charges was virtually every local authority was dominated by Fianna Fáil in 1985. Six months after the election the Fianna Fáil Party, in its local authority Estimates meetings, had an opportunity to put into practice what it had promised six months previously, to abolish service charges. It did not, of course, do so.
To use an awful phrase, we are where we are. It is time we had a balanced and mature debate on water charges and the broader question of local authority funding. Our system of local government is broken. Rather than a simplistic motion on water charges or household charges, the Seanad should debate the funding of local government which is a topic of serious concern. If this debate took the form of statements, it would be helpful.
I appreciate much of what has been said by Members on the other side of the House. The classic argument can be made against taxation in the form of a flat charge not based on ability to pay. Probably the most successful tax introduced by any Government in recent years is the €200 tax on second houses. It has not brought in a huge amount of money, but it has yielded what it was scheduled to bring in. From a classic taxation perspective, it is not entirely fair. It is not related to family wealth, the size of the second house or the use to which it is put. However, because the tax is minimal, clear cut and can be simply paid on-line, 95% of those liable to pay have done so. In that regard, the concept of a low rate service charge is something we should not automatically rule out.
I did not hear the Minister’s speech, but I read his script. He has reminded us of the commitment Ireland entered into as part of the bailout conditions. Charges are now on the agenda and we need a detailed and serious debate. Water is not free. Somebody, that is, the taxpayer, is paying for it. There is no free service. One of the great scandals is the amount of water being wasted throughout the country. Every local authority is to blame in this regard. The piping network in many towns, cities and villages is very old and urgently needs to be repaired. The Minister of State, Deputy Fergus O’Dowd, has come into the House and I know he has responsibility for the broader project of the NewERA document. That is the route we must travel. We need to replace our water system and the piping network both in town and country. I have read that as much as 70% of water is wasted. We must address this problem. Doing so will be expensive.
I do not have all the answers. I recognise that water services must be paid for and that local government is grossly underfunded. Income tax is at a penal level for most. People claim there are billions of euro to be collected in wealth tax. They make projections and statements for base political motives, but the figures do not stack up.
Senator Paul Bradford: The Department of Finance provides projections. I am glad of the interjection by Sinn Féin. Sinn Féin economics was practised, although not in this country. It was practised beyond the Berlin Wall throughout eastern Europe. Not only did it ruin half a continent, it also ruined people and families.
Senator Paul Bradford: Seeing as Sinn Féin has tried to travel to the middle ground, it has had to change many of its policies, not just those on economics but also those on history and mayhem. I welcome its conversion from bullets to ballots but——
Senator Paul Bradford: I welcome Sinn Féin’s conversion from bullets to ballots and its recognition of this House and its presence herein. The Sinn Féin Senators’ colleagues will tell them that, in the past ten to 15 years, I have had many fruitful discussions with Sinn Féin, North and South. I welcome people who have decided democracy is the way forward.
We are debating water charges. I reject the simplistic motion before us. We need to continue this debate in a mature fashion. Water must be paid for and local government must be funded. The Minister’s contribution has been helpful and I look forward to further analysis of his proposals and those of the Minister of State who has been given the enormous task of introducing the NewERA policy and putting in place a base for water services.
Senator Feargal Quinn: I had the opportunity to visit Chile some years ago. Anyone who wants to know something about conservation should consider the history of Easter Island. Every Member should do so, if only on the Internet for ten or 15 minutes. The island is so interesting. It had a very established civilisation 500 years ago but the inhabitants did not understand conservation. They cut down its trees for various reasons, mainly, I believe, to build big statues, and when the last tree was cut the last of the population disappeared. There was no way they could live.
We must recognise that we must do something about the conservation of water. There is a limited supply and the amount of water we are using in the world is such that we will not be around in hundreds of years.
I am sure many of us regard fees for water as a consequence of the bailout. We must realise, however, that water is an extremely valuable commodity. We live in a changed world in which population increases have put massive pressure on resources and water supply. The world’s 6.5 billion people use 990 trillion gallons of water every year. Trillions do not mean anything to me; I cannot quite figure them out. That said, water consumption has increased twofold in the past 25 years while the population has increased by only 1.5 times in the same period. We are, therefore, using far more water and there is a limited supply.
I have reservations about the introduction of a flat rate for water. Would anyone expect to pay a flat rate for unlimited food, petrol or diesel? The flat rate may be an interim measure and I gather from the Minister, Deputy Hogan, that it is. Metered charges seem to be much more efficient. The United Kingdom had a flat rate for water but the water regulator discovered that consumption typically declines by 5% to 10% in metered households.
I have a daughter living in France, where there is metered water. Bills show how much water one has used and give a report on the quality thereof. My daughter happens to live in an area with water of very good quality and people often visit her with empty drinking bottles to take water from her tap. I hope that when we introduce water metering, the bills will show not only the quantity of water used but also the quality.
The Minister is arguing that charging people for water is a conservation measure and not a matter of taxation. If he were so worried about conservation, he would be targeting farmers. Water is wasted in the main by farmers. According to research published in The Economist, agriculture uses three quarters of the world’s water. Urban users use only a trivial amount. Most people drink two or three times per day on average, but 2,000 to 5,000 litres of water per head are used to make the food they eat. If the Government was truly interested in water conservation, it would be targeting farmers and getting them to conserve more water through taxation or even tradeable water rights. The EU-IMF deal leaves us with no choice but to implement the charges.
A rain harvest mechanism was recently pitched on “Dragon’s Den”. The concept of conserving water caught the imagination on the programme. Authorities in cities such as New York are now implementing measures to conserve rainwater. Last year New York unveiled an ambitious plan to clean up its waterways instead of spending billions on new tanks and pipes for grey water infrastructure which takes years to build and never quite addresses the problem. New York intends to invest in what is called green infrastructure, such as roofs covered with vegetation, porous pavements and kerbside gardens. The scheme involves a fundamental shift in approach as opposed to treating rainwater as waste to be whisked away as soon as possible. The Minister of State, Deputy O’Dowd, will know New York fairly well. I understand his relatives are to continue to stay there. The authorities in the city are trying to ensure water is being used for very definite reasons.
I was at the Bloom 2011 festival last week. A very interesting effort was being made there and the concept of rainwater conservation was being sold. There are so many things we can do. This debate begs the question as to whether we will have metered water charges. Metered water should be introduced as soon as possible. The Minister of State says the flat rate to be introduced is not for water and that it is an overall charge. Regardless of circumstances, water must be metered. Water charges must be introduced at some point and this is the right direction to go. Let us ensure we introduce charging in a sensible way.
Senator Ivana Bacik: I welcome the Minister of State. This is his first time here. I am glad to have an opportunity to speak to the motion and to follow my colleague, Senator John Whelan, who led for the Labour Party. He gave a very clear account of the need for a metered system of water charging.
As the Minister, Deputy Hogan, said, it is somewhat ironic to be lectured by Fianna Fáil about water charges. The Minister has pointed out there is a certain collective amnesia being demonstrated by Fianna Fáil Senators in tabling their motion given the commitment to introduce domestic water charges was made by a Fianna Fáil-led Administration.
That is a water conservation measure. Senator John Whelan has stated people will be given an allowance. The idea is that there would be a charging system based on usage above a free allowance. That is clearly outlined in the programme for Government. Our colleague in the Dáil, Deputy Ciarán Lynch, pointed out that the Labour Party welcomed the remarks made by the Minister, Deputy Hogan, to the effect that there would be no introduction of domestic water charges until a metering system was put in place. A flat rate water usage system does not provide the incentive to conserve water that a metered system provides.
That is the bottom line for all of us who are concerned about the protection of the environment and seeing a charge brought forward that would have as its objective the conservation of water and increased environmental sustainability.
Senator John Whelan outlined some interesting points, particularly in reference to whether there was a need for a new water utility governmental organisation or whether an existing body such as Bord na Mona could be used. I would be interested to hear the Minister’s views on that matter.
We must be clear on the need for the Government to act to ensure the security, safety and sustainability of the water supply, as Senator John Whelan said. We are all aware of the prospect of water shortages. A headline in yesterday’s farming supplement in the Irish Independent read: “Drought takes toll on crop growth and yield”, and pointed out that the east of the country was suffering from drought, that is, in the month of June that has not been the driest or the sunniest we can recall, yet prolonged drought in eastern counties is causing crop losses and forcing livestock farmers to supplement scarce grass with silage and concentrate. I point out to Senator Feargal Quinn, regarding the use of water by farmers, that farmers currently pay for water.
The programme for Government outlines a system under which we will move to metered usage which clearly will take some time to introduce. We will then be able to charge for usage over and above the free and equitable allowance that will be provided for. That is essential. I accept the good will shown in the amendment tabled by the Sinn Féin group. None of us wants to see low income households suffer. We do not want to see people placed in even more severe poverty because they have to pay a new charge, but we must incentivise to avoid excessive usage and wastage of water.
Senator Michael Mullins: I join others in welcoming the Minister of State, Deputy Fergus O’Dowd, and thank the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, for coming into the House to clarify the Government’s position on water charges. Contrary to what has been reported in the media, we have seen that there is unanimity among the Government parties on the way to proceed on this matter.
Senator Michael Mullins: They have forgotten who was in government for the past 14 years. The motion is ill-timed because if we were to be honest with each other, we would agree that water charges need to be put in place because of the financial position in which the country finds itself.
Senator Michael Mullins: There was much talk about fairness, but nobody has referred to the fact that thousands of families in households throughout the country are already paying water charges through group schemes, including in the farming and business communities. It was a major bone of contention and topic of debate at local authority meetings the length and breadth of the country when farmers were charged for water. It was put to all of us as local authority members at the time that it would be much fairer to have all households pay for water because, as previous speakers stated, it is a finite resource and something we must cherish. Those of us who are fortunate to live in urban areas have water and sewerage services for which we do not pay a charge, yet someone connected to a group scheme must pay for them. They must provide their own septic tank and pay for it. We will soon have a situation where septic tanks will have to be licensed. In that regard, payment for water by metering is fair and equitable.
It is hoped the introduction of the charges will enable us to reduce the cost to business in the years ahead. Reference was made to the need to put a scheme in place to help businesses. If we could reduce the cost to them, that would be welcome.
The Government faces a major challenge. After years of under-investment in infrastructure, the country is broke. We are in hock to the European Union, the IMF and the European Central Bank. We all want world class infrastructure that will drive investment. We want clean, safe water when we turn on our taps and, following a few days of warm weather, do not want to be concerned that we will face water charges as alluded to. However, water will have to be paid for. It is the Government’s job to govern and it should get on with it. We should introduce a system that is fair and equitable. I know the Minister will take on board what has been said about people on low incomes and the vulnerable and that a proper waiver system will be put in place to deal with such circumstances. Installing water meters will lead to the creation of jobs.
I have every confidence that the Minister is a man of action who will take on the Department and give the country a system that is workable. We all know how difficult it has been to have water schemes in various counties. I welcome the investment made by the Minister in County Galway, to which Senator Trevor Ó Clochartaigh referred, in Clifden, Casla, Claregalway and Milltown.
Water is a necessity. I have always believed essential services such as a water supply should be delivered as a public service. A flat household charge would be unfair and would not discriminate between houses with five bathrooms or none. Metering is unworkable, as the leader of the Labour Party, Deputy Eamon Gilmore, stated in the Irish Examiner on 28 June 2010.
Having listened to Senator Ivana Bacik’s contribution, she should have no difficulty in supporting Fianna Fáil’s motion because I will be supportive of metered water charges when meters are installed. We all agree that water must be conserved, but what we are doing in tabling the motion is trying to get clarity, given the confusion caused in the past two weeks by what the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, said before he was reined in by the Taoiseach, and by what the Tánaiste and some of Senator Ivana Bacik’s Labour Party colleagues said compared to what some of the Fine Gael Senators said about the issue. The motion asks the Government to state clearly whether it will introduce a flat rate household water charge in January 2012. In his response the Minister said there were no answers to any of the questions asked. Therefore, I am none the wiser as to whether a flat household charge or water charge will be introduced in January 2012.
I am glad we are debating the issue. I was glad to hear Senators John Whelan and Ivana Bacik clarify their positions and say they supported metered water charges. I agree that is the right way forward and my grouping has no difficulty in supporting this. The motion was not tabled to make political points on the issue, but there is total confusion regarding the Government’s stance on it. We gave an opportunity to the Minister and I was glad he addressed the House in an attempt to clarify the position, but it has not been clarified. He stated previously, as Senator Cáit Keane stated, that the household charge — we still do not know when it will be introduced — was not a water charge. He said we would not have water charges until meters were in place. That is welcome and that is what the motion states, but he stated the money from the flat household charge — we do not know how much it will be or when it will be implemented — would be used to pay for water metering. If that is what I understand from this debate, it is a relatively new departure.
I do not agree with the Sinn Féin amendment. We cannot be in a position where necessities such as this precious resource are not paid for. That is not possible or feasible and the people are entitled to know where the Government stands on the issue. If I am correct in understanding what was said on the Government side, there will be no water charges until meters are in place. That is what I understand from what was said by a number of contributors to the debate, but that is not what I understand the Minister to have said because he did not say it in his statement. However, the implementation or otherwise of the household charge is still hanging over proceedings. The position is not clear. Will it be a flat charge? If it is, we will oppose it. The terms of the EU-IMF agreement do not set out a flat water charge. Senator John Whelan stated the previous Government had shirked its responsibility to make tough decisions. As somebody who supported that Government as a backbencher, I know that many extremely difficult and unpopular decisions were taken. If we cannot have clarity from Government Members on issues such as water charges or JLCs, God help them when they get to the budget.
The former Tánaiste Dick Spring introduced water charges back in 1983 when he was Minister for the Environment. It was done on a flat rate basis and, as Senator Rónán Mullen pointed out, to address the fiscal difficulties of the time. I remember chairing the local authority in my own town when we had a majority on the council and we debated the issue because there were differences in Fianna Fáil about whether they should be supported. We came to a conclusion that the local authority needed the funding and that it was not unfair to apply water charges. I have not changed my mind since and I notice that Sinn Féin has not done so either. Shortly after we made the decision locally, Sinn Féin mounted a campaign against water charges. I remember attending one of its public meetings and when prevailed upon to make the case for the charges, I pointed out that the small cost involved — I think I said it would only cost the price of a glass of Smithwicks per week — was only a fraction of what we were charging for electricity. When I asked which utility people would choose in the event of an emergency where they had to do without one of them, most found it difficult to make the decision because they were both absolutely essential. I have not changed my mind since.
Water is a finite resource. It is not just a valuable resource; in fact, it is essential to sustaining human life. There is a need for conservation and to recognise, as many economists have pointed out, that it will be the oil of the future. We have a role to play in that respect.
Metering is a fairer way to charge for water. I was very disappointed with the contribution of the Minister for the Environment, Community and Local Government. He brought the contents of the EU-IMF agreement to our attention, but he did not go on to say whether the assessment required under the agreement had been undertaken. Has there been a cost-benefit analysis of providing a meter system? According to one report, this will cost €500 million. What benefit will be derived from it? It would seem to have benefits, by way of encouraging people to conserve their water supply. However, no evidence has been advanced on whether any particular study has been conducted. In the situation in which we find ourselves we need to question any expenditure of that magnitude.
There has been no indication as to what the charge is likely to be. I note that Labour Party Members are seeking refuge in the fact that the Minister has stated that when the charge is introduced, it will be done on a metered basis. My prediction is that we will be faced with a household charge of some description on a flat rate basis which will be introduced from 1 January 2012. Whether it is in place as a water charge on an interim basis, or a property charge, or something else by another name, it will happen.
In the current climate we need to spread the tax base. My real view is that we must reduce public expenditure drastically. Fianna Fáil made an attempt to do this with some effect, but it did not go far enough. However, the attempt was not very popular with the public. I would be very concerned about the reaction of the Government to any unpopular measures in seeking to defend the interests of the parties, rather than the interests of the country.
What efficiencies have been identified by introducing a water company on a national basis? Will we end up with a semi-State body with average salaries of around €80,000 per annum and a chief executive paid in excess of €500,000, just like in the ESB? Will the cost escalate when compared with the cost of the local government operational system? How many redundancies will result at local government level? We need further debate on this issue. The Minister has skirted over the issues involved and there was no meat in what he had to say. We need to have a proper debate because the uncertainty is only going to cause resentment among consumers. Unless we develop consumer confidence and spending, the economy will stagnate for as long as that condition continues.
Part of our current problem stems from the fact that we have gone for so many years without charging for these services. It would have been much better if we had been paying a little during the years. People in rural communities came together some years ago to put together group water schemes. The European Union carried out tests and found that the schemes were not up to standard. Therefore, we had to spend large amounts of Exchequer and EU funds to bring them up to standard.
Metering will lead to the creation of jobs which we need. There are many people who were employed in the construction sector and who would be well able to carry out these jobs. People will receive a generous allowance. The current allowance is 50,000 gallons and any household should be able to do with this amount. If such an allowance is put in place, it will alleviate any problems.
We should look at water harvesting, for which there are grants payable in the agriculture sector. It is nonsense to think we use expensive treated water to wash down machinery, milking parlours and farmyards.
There is a system across the European Union that is better for water management than our own. We will upgrade our schemes which will create jobs and ensure water is not lost into the ground. In particular, I welcome the establishment of a water company because when I worked with the IFA, we found that there were different charges across counties. If we had one national water company looking after the water supply, we would have a balanced cost across the country.
Water is a finite and precious resource. Good quality water is an even more precious resource and precious resources do not come cheap. I have always been an advocate of fair and equitable water charges and the proposals of the Minister and the Minister of State are exactly that. People in some parts of the country did not have any water last Christmas and they would have paid any amount of money to get it. The crisis made us realise that we took it for granted, that water was precious and that we needed to respect it. When I was a young lad, I heard an old saying that wilful waste could lead to woeful want. In recent decades there has been a complete waste of water, with no respect for the fact that at some stage somebody will have to pay for it. Ultimately, the taxpayer has ended up paying for it. Unfortunately, even in the good days, we did not have the resources to put in place the infrastructural measures necessary to ensure a supply of top quality water and throughout the country there are pockets where the water supply is particularly bad. With water charges, there must be an investment to upgrade water facilities throughout the country.
I hope the Minister and the Minister of State will consider households with children with disabilities as they use more water to bathe and care for them. I suggest cognisance be taken of this when the process is being framed and the quantity of free water allowed should be far more generous for families with children with severe disabilities.
Senator Rónán Mullen: I thank Senators Comiskey and Conway. I hope I do not let down Senator Conway. I also wish the Minister, Deputy O’Dowd, well in his brief. As interested as I am in seeing how he discharges his brief I am also looking forward to seeing how he casts his vote for the Presidency nomination when the time comes.
Senator Rónán Mullen: I am rather astonished at the lack of clarity on this issue given that the debate about water and water charges began many months ago under the previous Government. There still seems to be a considerable lack of certainty about it. One thing is sure, which is that it is naive to think water must not be paid for. There are two ways in which water is already paid for, which are through group water schemes in which many of us are involved or from which we benefit, and through the fact that it costs millions to have treated drinking water in our country.
While Senator Crown is right to emphasise the importance of conservation measures, we need to link these as much as possible with the metering of water by users and payment accordingly. A number of principles are important in this. We must have regard to the specific needs of families and Senator Conway was right to mention families with disabilities. If there is to be payment per usage, it must be done in a way that acknowledges the important role of the family and the importance of looking out for children in particular. Accordingly, there must be an adjustment of the pay per user system.
As it stands, the idea of a flat tax is not acceptable. A water charge that is totally divorced from meter usage would simply be a tax masquerading as a conservation measure. Water leakages will continue unless there is an incentive for users not to waste water and for the State to put in place measures to prevent the massive wastage of water. The problem with having a State monopoly running the water supply is that it has no incentive to spend a genuinely scarce resource — capital — to save on a non-scarce resource, which is water. In the proposals hinted at by the Minister, the cost of subsidising a creaking and leaking system would simply shift from the State and ultimately it would be the taxpayer who would end up absolving the water supply network and the Government of any pressing need to spend money on repairing the system.
We need to be realistic about paying for water. It must be on the basis of metered usage. There must be a move to investment, and already there has been some investment, in curing the problem of massive leakage. Of course the money generated through metering water will contribute towards the cost of repairing our water system but there must be an acknowledgement of the importance of family life and of the specific needs of children in order that, as I stated last week, we do not get to the stage of it being Saturday night and not a child in the house washed.
Senator Diarmuid Wilson: I welcome the Minister of State, Deputy O’Dowd, to the House. This is my first opportunity to congratulate him officially on his appointment. I wish him well in the years ahead in his portfolio.
I thank colleagues on all sides of the House for their contributions. I ask my colleagues on the Committee on Procedure and Privileges to consider extending the time allocated for Private Members’ business. We now have many groups in the House and many colleagues wish to contribute to debates and perhaps we should consider extending the time by half an hour. We can examine this in the coming weeks.
Senator Diarmuid Wilson: I thank Senator Bacik for her commitment to this. It has been Fianna Fáil policy and in our manifesto we stated we agreed with water charges but only when meters had been installed in all houses and not before. We are totally opposed to a flat rate and we believe this is not fair.
Legal colleagues, including Senator Bacik, would agree that one should always take a very close look at the small print and we have been attempting to do so over the past two hours. I hope the programme for Government is in slightly larger print or the Labour Party is in for an eye-opener.
Senator Diarmuid Wilson: To summarise this very densely worded speech will not take very long. The Minister referred to my Fianna Fáil colleagues as having amnesia. He has the shortest short-term memory I know of because between starting and finishing his speech he changed his mind three or four times and began to confuse us even more. In summary, he stated water charges will be introduced only by meter and there is nothing wrong with this. He stated there will be no flat rate charge and there is nothing wrong with this either and it is Fianna Fáil policy. However, he then confirmed in a roundabout way that a utility charge which will incorporate a water charge and a property tax will be introduced from next year. The confusion continues.
|Crown, John.||Cullinane, David.|
|Ó Clochartaigh, Trevor.||Reilly, Kathryn.|
|Bacik, Ivana.||Bradford, Paul.|
|Burke, Colm.||Byrne, Thomas.|
|Clune, Deirdre.||Coghlan, Paul.|
|Comiskey, Michael.||Conway, Martin.|
|Cummins, Maurice.||D’Arcy, Michael.|
|Harte, Jimmy.||Hayden, Aideen.|
|Healy Eames, Fidelma.||Henry, Imelda.|
|Higgins, Lorraine.||Keane, Cáit.|
|Kelly, John.||Landy, Denis.|
|Leyden, Terry.||MacSharry, Marc.|
|Moloney, Marie.||Mooney, Paschal.|
|Moran, Mary.||Mulcahy, Tony.|
|Mullen, Rónán.||Mullins, Michael.|
|Noone, Catherine.||Ó Domhnaill, Brian.|
|Ó Murchú, Labhrás.||O’Brien, Darragh.|
|O’Donovan, Denis.||O’Neill, Pat.|
|O’Sullivan, Ned.||Sheahan, Tom.|
|van Turnhout, Jillian.||Walsh, Jim.|
|Whelan, John.||White, Mary M.|
|Bacik, Ivana.||Bradford, Paul.|
|Burke, Colm.||Clune, Deirdre.|
|Coghlan, Paul.||Comiskey, Michael.|
|Conway, Martin.||Cummins, Maurice.|
|D’Arcy, Michael.||Harte, Jimmy.|
|Hayden, Aideen.||Healy Eames, Fidelma.|
|Henry, Imelda.||Higgins, Lorraine.|
|Keane, Cáit.||Kelly, John.|
|Landy, Denis.||Moloney, Marie.|
|Moran, Mary.||Mulcahy, Tony.|
|Mullins, Michael.||Noone, Catherine.|
|O’Neill, Pat.||Sheahan, Tom.|
|van Turnhout, Jillian.||Whelan, John.|
|Byrne, Thomas.||Cullinane, David.|
|Leyden, Terry.||MacSharry, Marc.|
|Mooney, Paschal.||Mullen, Rónán.|
|Ó Clochartaigh, Trevor.||Ó Domhnaill, Brian.|
|Ó Murchú, Labhrás.||O’Brien, Darragh.|
|O’Donovan, Denis.||O’Sullivan, Ned.|
|Reilly, Kathryn.||Walsh, Jim.|
|White, Mary M.||Wilson, Diarmuid.|
|Bacik, Ivana.||Bradford, Paul.|
|Burke, Colm.||Clune, Deirdre.|
|Coghlan, Paul.||Comiskey, Michael.|
|Conway, Martin.||Cummins, Maurice.|
|D’Arcy, Michael.||Harte, Jimmy.|
|Hayden, Aideen.||Healy Eames, Fidelma.|
|Henry, Imelda.||Higgins, Lorraine.|
|Keane, Cáit.||Kelly, John.|
|Landy, Denis.||Moloney, Marie.|
|Moran, Mary.||Mulcahy, Tony.|
|Mullins, Michael.||Noone, Catherine.|
|O’Neill, Pat.||Sheahan, Tom.|
|van Turnhout, Jillian.||Whelan, John.|
|Byrne, Thomas.||Crown, John.|
|Cullinane, David.||Leyden, Terry.|
|MacSharry, Marc.||Mooney, Paschal.|
|Mullen, Rónán.||Ó Clochartaigh, Trevor.|
|Ó Domhnaill, Brian.||Ó Murchú, Labhrás.|
|O’Brien, Darragh.||O’Donovan, Denis.|
|O’Sullivan, Ned.||Reilly, Kathryn.|
|Walsh, Jim.||White, Mary M.|
|Last Updated: 08/03/2013 20:21:56||Page of 11|