Watered down - Village Magazine

18 November 2014

F a policy goal is legitimate it is legitimate to use taxation

to further the policy. It is legitimate to tax junk food, to tax

plastic bags and waste, and to tax water. It is not double

taxation to impose charges for any of these any more than it

is to exact road tax or bus fares. And all are legitimate.

This message has been lost as Ireland’s water tax has been introduced

in a furtive and unprincipled (Hoganesque) way and then altered in ways

that make it useless.

The water charge should have been a substitute for a component of

income tax. Indeed income tax hits the ‘good’ of work in general, and

there should be a move towards taxing ‘bads’, like water proﬂigacy.

The problem is that many people simply cannot pay the tax – and that

established State systems can deal more equitably with people who can’t

pay income tax than new charges.

Furthermore there is concern that there is an agenda to privatise the

company, which was established partially to circumvent EU rules on

government borrowing, though squeezing the charges may import

non-compliance. Pathetically it has been mooted that privatisation

would be precluded by constitutional amendment, though Enda Kenny

has sensibly ruled it out. Rather than such a random and ad hoc

referendum, how much better to constitutionally enshrine that all

natural resources must be owned in ways compatible with the pubic

interest, or that all decisions should be assessed for their compatibility

with improved equality in society.

Worse even than not making the principle clear or fair had been the

way the bureaucrats were allowed to go ahead and set up Irish Water

without strict scrutiny at every stage. Consultants were over-paid and

still extract €1m weekly. Bonuses were made available to

underperforming staﬀ – €9,000 even to those “in need of improvement”.

By the time the State company was ready the costs involved meant that

the charges for water were going to be far steeper than anybody had

anticipated. And the Regulator has set Irish Water a target of only a

paltry 8% in cost reductions over the next few years. The percentage is

low because it is obliged to maintain double the necessary 2,000

workforce inherited from local authority staﬀs, until 2025 – following a

deal with unions. John FitzGerald of the ESRI has said the extra wages

and other costs for the 2000 extra staﬀ amount to around €150m a year,

or an extraordinary €90 per household.

Irish Water’s unimpressive managing director John Tierney – former

Dublin City Manager, the acme of local government – has now apologised

to customers for the bungling. No Minister has apologised, though the

issue now threatens governmental stability.

The country is on the march over the issue. Richard Boyd Barrett says

the people sense blood. As the Irish Times’ Fintan O’Toole has noted: “It’s

an expression of anger about bigger things: command-and-control

politics; trust-me-I’m-an-expert arrogance; rotten, feckless disregard

for the realities of life at the bottom of the heap; the feeling that nobody

gives a curse how you live or what you think. It’s about injustice, and it’s

justiﬁed. The recent budget was the fourth regressive budget in a row.

This has nothing to do with ‘austerity’. The ‘austerity’ budgets under

Fianna Fáil between 2008 and 2011 were mildly progressive – they hit

the better-oﬀ harder than the worst-oﬀ. But every budget under Fine

Gael and Labour (Labour!) has quietly reversed this trend”.

Originally it had seemed a home made up of two adults and two

children under would be spending about €370 a year but Minister for the

Environment Alan Kelly has now indicated that he expects imminent

changes to the charges to make them “modest” (and opaque). They will

probably be capped at around €300 a year per household until 2018.

€100 will be rebated to households through the tax or social welfare

systems, leaving around €200 (€100 for single-adult homes).

But this was an issue that should have been uncontroversial. Fintan

O’Toole has asked “How much political brilliance does it take to persuade

the population that it is necessary to change a water supply system that

leaves whole cities (Galway) and almost entire counties (Roscommon)

without drinkable water for long periods? That wastes through leakage

half of all the expensively treated water it produces?”. He might have

noted also that, for example, of the 2,450km of pipes in Dublin only 7km

was being upgraded annually and that under the disparate local-

authorities there was little chance of diverting the Shannon in the

direction of the capital, as seems necessary to maintain supplies.

Furthermore metering is important because multiple studies show 16

per cent less water is used when metered. Irish Water does make sense.

The controversy may show that in contemporary Ireland if you betray

principle you risk derision, dissent and disrespect. If you compound it

with spendthrift incompetence, unfairness, short-termist populism and

bad communication you deserve nothing but the contempt of the

citizenry.

It is however too much to expect that someone would actually promote

the charge as the best of some bad options, and point to a fair vision,

based on a radically improved policy, not just half apologies and

hypocritical U-turn. •

EDITORIAL&OPINION

Also in this section:

John Gormley – Homestore eﬀect 20

Sinéad Pentony on Budget 2015 22

Niall Crwley on equality 25

Constantin Gurdgiev on

competitiveness 26

EDITORIAL

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