Calls for tax breaks for drivers using optional safety features gathers pace, writes Daniel Attwood
Pressure is mounting on the Minister for Finance, Brian Cowen, to introduce a tax break in the upcoming budget for motorists who have optional life-saving safety features fitted to their new cars.
The call to exempt optional safety equipment from Vehicle Registration Tax (VRT) has been gathering momentum since the Society of the Irish Motor Industry proposed it in its pre-budget submission.
Since then, the Road Safety Authority, which was recently established by the Government to reduce the numbers killed on the roads, has added its voice to the call. "Any mechanism which could make safety equipment more accessible to the public, especially child car seats, should be considered," said an RSA spokesman.
Now the Fine Gael transport spokeswoman has joined the chorus calling for the Minister for Finance to bring in the move as part of the 2007 Budget, which he will announce on December 6th.
Olivia Mitchell, Fine Gael's front bench spokeswoman on transport, said any move to cut the numbers killed and injured on Irish roads should be taken.
"Obviously whatever can be done to improve road safety should be done," she said. "Taxes like VRT should be policy tools and not just revenue raisers."
The Labour Party, while broadly agreeing that such a move could save lives, was more reserved with its comments. Colm O'Riordan, the party's director of policy, said: "We would look seriously at any proposal that would deal with the carnage on our roads."
However, he added that it must be certain that any savings would be passed on to consumers.
This, he said, would have to be addressed before Labour gave such a move its backing.
VRT adds a substantial amount to the cost of any optional safety equipment. As a result, some car importers even strip safety features such as electronic stability programmes from new models to keep retail prices down. Because both VRT and VAT are applied to every optional piece of equipment regardless of whether it is a safety feature or not, as much as 43 per cent extra is added in tax to equipment such as airbags or vehicle stability programmes.
For example, VRT is calculated at 22.5 per cent of the open market selling price of cars up to 1400cc, 25 per cent on cars with engines between 1401 and 1900cc and 30 per cent above 1900cc. Therefore, any optional safety items attract VRT at the corresponding rate. Thus side airbags on a 1.25-litre Fiesta are €400, but cost €425 when fitted to a 1.6-litre model.
This pushes such features out of the reach of many car buyers. Hinting that the Minister may be open to the idea of some form of tax encouragement for safety equipment, a spokesman for the Department of Finance said the idea is being considered in the context of the next budget.
However, he said the Department was concerned over the definition of a safety item, which he said could cover everything from hands-free mobile telephone kits to tyres.
While the argument over what defines a safety item continues, a motor industry spokesman has suggested that as a first step to encourage motorists to buy cars with multiple airbags, the Minister for Finance should deduct €1,500 from the cost of any new car purchased with more than two airbags.
"With the possibility of 200,000 new cars having a minimum of three airbags, the lives saved will more than justify the cost," said Cyril McHugh, chief executive of the motor industry representative body, SIMI.
Whether the Minister adopts the society's recommendation or opts to remove all safety items from the VRT net altogether, there will be significant savings for the safety conscious car buyer.
For example, over €250 could be cut from the price of the optional electronic stability programme (ESP) fitted to a Ford Mondeo. ESP is designed to maintain a car's stability during critical manoeuvres and to prevent a loss of control due to excessive oversteer and understeer.
According to the European Accident Causation Survey, vehicle stability programmes, such as that available on the Mondeo, could save many lives if fitted to more cars. "ESP could have a probable or definite influence in about 67 per cent of fatal accidents involving loss of vehicle control," it said.
Pressure for the Minister for Finance to play his part in cutting road deaths is also mounting after the latest Garda figures on fatal road collisions reveal that 315 people have already been killed so far on Irish roads this year - well in excess of the government's own target of 300 for the entire year.