Dublin cabinet lurches towards flat taxes

The coalition government in Dublin appears set to move ahead with controversial plans for new water and family home taxes from next year despite mixed signals about the plans at cabinet level.

An announcement on water charges was made on Tuesday by 26-County environment minister Phil Hogan as he discussed the installation of domestic water meters across the state with business figures.

However, in the face of a public outcry over the lack of fairness of imposing a flat tax on the broad population, Taoiseach and Fine Gael leader Enda Kenny appeared to back down.

Kenny told the Dublin parliament he was bringing in a property tax and water charges in order to comply with the requirements of the EU/IMF bailout deal. “The Government have not made a decision yet about the nature and scale of these charges,” he declared.

He was responding to Sinn Fein President Gerry Adams who described the charges as new ‘stealth taxes’ which would hit the poorest the hardest. Minister Hogan, Adams pointed out, had said the purpose of the water tax was to reduce waste, yet 40 per cent of water was lost because of the leaking mains supply system. He suggested the 500 million euro earmarked for installing the water meters be spent on improving the system, creating jobs and reducing waste, without imposing additional taxes on hard-pressed working families.

COALITION DIVIDED?

The issue of new water and property charges has apparently reopened tensions between the government partners, with Labour leader Eamon Gilmore insisting the government has not yet agreed on any such charge for next year.

Hogan, however, later contradicted his cabinet colleagues by insisting he was pressing ahead with the planned imposition of minimum water charges and a flat rate “interim household charge” to be introduced from January 1.

It’s the second apparent split between the coalition partners in as many weeks after last week’s row over reform of wage agreements.

Communications Minister Pat Rabbitte (of the Labour Party) refused to be drawn on whether he would support the charges, but said, “Ireland has been landed in a hole” and his government was trying to find the most “painless way” of dealing with it.

Sinn Fein TD Aengus O Snodaigh said the government was not concerned with improving water services but was “simply swapping one funding mechanism for another.

“Rather than funding essential local services through income tax, which at least pays some regard to the principle of ability to pay, the government are proposing to fund these services through ultra regressive flat taxes,” he said.

“The Minister said that he is considering the use of waivers for those on social welfare but struggling families should not hold their breaths. Instead they should fight to prevent the charges being introduced at all.

“I am meeting with a trade union delegation from the local authority and water services sector specifically this afternoon. At this meeting I hope to discuss what can be done to enhance our water distribution network and services without resorting to regressive charges.”

Eirigi’s Louise Minihan said the planned new charges and taxes were “yet another attack on hard pressed working people already burdened with privately accumulated banking debt.

“The diktats of the IMF/EU are being implemented with vigour by a Fine Gael/Labour coalition that promised change but is simply delivering more of the same neoliberal policies that created the economic crisis.

“The imposition of a water tax is simply the first step on the road to the full privatisation of the domestic water supply and will be resisted by working class communities across the Twenty-Six Counties.”

Urgent Appeal