If water investment funded by tax it ‘simply won’t happen’

Relying on financing the State’s water infrastructure from general taxation would mean “it simply won’t happen” in bad times, an economist in the business sector said on Thursday.

Fergal O’Brien, director of policy and chief economist with Ibec, said there was a question over how to deliver and maintain the necessary investment programme in the water infrastructure. The second question was how to pay for it.

He was speaking after internal estimates by Irish Water suggested the abolition of the utility by the next government would cost the State up to €7 billion over the next five years.

Speaking on RTÉ's Today with Seán O'Rourke programme, Mr O'Brien said we could not rely solely on the taxation system and on the "vagaries of political decision-making" that would fluctuate from time to time.

He said that when the financial crisis hit, the first thing to go had been the capital investment programme.

“We shut it down. It’s barely a care and maintenance programme. We are investing nothing at the moment in the country’s much-needed infrastructure. If we rely fully on the financing of our water infrastructure from general taxation, it simply won’t happen in the bad times.”

No certainty

On the same programme, Green Party leader Eamon Ryan said the question was how we would get clean, healthy fresh water into the future and there was no certainty about that.

“We can’t just go back to the old way. The old way was not working. Water is too important, it’s too precious for all of us,” he said.

Mr Ryan said spending on water had to be increased and that was a tough choice when it came to other issues such as housing.

He suggested some funding could come from general taxation, with some from the corporate system. There was also a means of raising money through the European Investment Bank.

Basic water needs should be met for free but a charge should be retained on the “wasteful” use of water, he said.

He believed the current set-up could be changed “at minimal cost” and he did not accept the “inflated, ridiculous” figure of €7 billion that had been reported.

Independent TD Clare Daly said she believed Irish Water in its present form was "gone".

The debate around Irish Water had not, she said, been about improving water infrastructure.

“They tried to package it as that. But the reason why it’s been such an unmitigated disaster has been because of the inefficiencies, the consultants, the bonuses, the advertisements, the wastage and all that scale of things.”

Ms Daly said people “very rarely” wilfully wasted water and she proposed the establishment of a national authority such as a water and sanitation board, which would be “ringfenced” in public ownership.

The service should be funded through “progressive taxation” and it should not be treated differently to any other public service.

Separately Sinn Féin leader Gerry Adams said water charges must be abolished for good, and that now was an opportune time to do so following the "categorical rejection of the Fine Gael/Labour Party Government at the ballot box".

“There has been a seismic shift in politics in this state. We witnessed the rise of people power over the past 18 months, with citizens of the state coming out in their hundreds of thousands to protest against the water charges.”