The Minister for Financehas publicly backed the reintroduction of water charges, reopening political controversy on an issue which has forced most political parties into humiliating climbdowns in recent years.
Mr McCreevy said yesterday that he wanted to establish the principle of imposing "user charges" in a wide variety of areas including water. "People pay for motor tax, people pay for electricity, people pay phone charges. I think people should pay for water as well", he told the Dublin radio station NewsTalk 106 yesterday.
Asked if this meant he was answering Yes to the question of whether water charges should be reintroduced he said: "Yes." Water charges were abolished in 1996 amid sustained local opposition.
Mr McCreevy failed to convince his Cabinet colleagues to support the reintroduction in the negotiations before the recent Budget. However, his comments indicated that the issue is likely to emerge again later this year in the next Budget talks.
Mr McCreevy would almost certainly win support for the idea from the PD Cabinet Ministers. The PD leader, Ms Harney, provoked major political controversy before the 1997 election by saying that domestic water should not be provided free, and that it had been wrong to abolish water charges.
However, the party quickly abandoned this position amid criticism from residents' associations and disagreement from its potential coalition partner, Fianna Fáil. A party spokesman would not be drawn on the issue yesterday, saying only that there was no proposal currently before the Government on the matter.
The Minister for the Environment, Mr Cullen, strongly opposed the idea when it was proposed by the Department of Finance in pre-Budget talks. The Department, desperately seeking means of reducing financial demands on the Exchequer, had argued that charging for water use could raise €200 million for the State's local authorities, thus reducing the Exchequer subvention to local councils for the services they provide.
Ireland is the only EU or OECD state not to charge for domestic water, and a significant number of politicians privately support such charges.
The European Commission also argues in favour of water charges on environmental and conservation grounds. But the imposition of water tax is seen as hugely dangerous politically for governments.
Just as the PDs supported water charges but abandoned the idea of campaigning on this basis, the 1994-1997 rainbow government supported them, but abolished them in 1996 in the face of political pressure.
The Fine Gael/Labour/Democratic Left coalition feared that some of their sitting deputies - particularly from the two smaller parties - could be unseated by anti-charges campaigners.
While opposing water charges, the Minister for the Environment has set up a review of the local authority system which may address the issue of local government funding.
Opponents argue that income taxes were increased to make up for the shortfall caused by the abolition of rates, and that service charges therefore represent "double taxation".