HOUSEHOLDERS ARE facing two new bills, a flat-rate household charge coming into operation from January 1st next, with domestic water metering to follow.
Announcing the move yesterday, Minister for the Environment Phil Hogan said he was awaiting the results of a comprehensive departmental spending review in order to determine the exact amount of the flat-rate household charge.
The previous government had intended to introduce a fixed charge of €100 per annum next year, with a value-based addition being introduced in 2013. If that figure was levied on the State’s 1.8 million households, up to €180 million could be raised in a year.
“There’ll be no flat-rate charge for water but we are obliged to bring in a household charge at some stage, in 2012, 2013, and I’m waiting to see the results of the comprehensive spending review to see what level that that will be pitched at and bring the proposals to Government before the summer recess,” Mr Hogan said.
Speaking later on RTÉ's Six One News, the Minister said the interim household charge would come into force from January 1st, 2012. Details would be brought before Cabinet in the next few weeks.
Exemptions were being considered for those on very low incomes and having difficulty paying mortgages or in receipt of social welfare, he said. The money collected would be “ring-fenced” for local government services, such as fire-fighting, libraries and other amenities.
Commitments given in the EU-IMF bailout deal require water and property charges. However, site valuation arrangements required to implement the property tax are not sufficiently advanced, so the household charge is to serve as an interim measure. It should be dropped when the property tax is in place.
Mr Hogan confirmed a procurement process for the installation of water meters was being entered into with the intention of having the necessary infrastructure in place early next year. Metered domestic water charges will then be put in place.
Mr Hogan said people would pay for the amount of water they use “over and above a generous” free allowance for domestic purposes. The free amount was yet to be calculated, he said. The previous administration proposed a free allowance of 40 litres per person every day.
Mr Hogan said water was a finite resource which cost €1 billion to treat every year and it was being wasted by too many people. “I see this not as a charging or taxation issue, I see this as a very important water conservation issue.”
Fianna Fáil environment spokesman Niall Collins accused Mr Hogan of creating confusion and accused him of planning “stealth charges akin to the reintroduction of domestic rates”.
He called on “the Labour TDs who have strongly opposed water charges until now to demand answers from their Environment Minister”.
Labour in opposition opposed water charges, but the party’s Government spokeswoman yesterday pointed out water metering was contained in both the programme for government agreed by the Coalition partners and the Memorandum of Understanding with the EU-IMF.
The programme for government committed the Coalition to creating a company to manage the State’s share in the semi-States, and to co-ordinate investment in priority areas including water. A new State-owned water utility company, Irish Water, will take over responsibility for the water maintenance programmes.
Prof Richard Tol of the Economic and Social Research Institute said metering would be unpopular. Speaking at a conference on the topic in Croke Park yesterday, he expressed scepticism about the proposed Irish Water company. “To create a new semi-State monster at a time when discussions are going on about privatising ESB and Bord Gáis and hopefully CIÉ is very ironic,” Prof Tol said.