Dáil Éireann debate -
Thursday, 12 Oct 1978

Vol. 308 No. 2

Local Government (Financial Provisions) Bill, 1977: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Keating

I should like to summarise the principal points of objection which I have to the proposal before us. I dealt with them at some length prior to Question Time and I do not intend to repeat them at length. The first major point is that the benefit which was promised to all citizens is not being granted. There are approximately 300,000 people in private rented accommodation who are not getting the benefit of the abolition of rates. In passing, one could say that the phrase "abolition of rates" is a misnomer. No matter what way one wishes to analyse it, rates are not being abolished as such because the revenue is being raised in another form.

The first point leads to the second major objection which I hold. It is one that has not been given a great deal of attention and I should like Minister to pay particular attention to it. Old people and people of limited means who have been adjudged to be entitled to a waiver of their rates in previous years are now forced to pay their rates in the context of the direct taxation which will go towards making up the deficit. The Government have ignored this point and I would now draw it to their attention and ask them to reflect on it. There is an anomaly in regard to people who until some months ago had the benefit of a relative financial advantage over their neighbours of anything from £2 to £8 per week, depending on the size of their houses. They are now to be disadvantaged by virtue of the fact that the deficit will be picked up from taxation of one kind or another, which is not going to discriminate against them but which will be levied equally on everybody. The position is that the person who was, by definition, already seen to be a poor person or a person of limited means, now finds that their outgoings on the necessities of life will increase and will include the revenue which the Government now see fit to make up.

It is difficult to overstress the importance of this measure to people in private rented accommodation. I am aware that there is not as high an awareness as there should be among the population of the advantages to which they are entitled and which they were promised 18 months ago. A symbol and a symptom of the Government's attitude to people in private rented accommodation is summed up by their rejection to respond sympathetically to proposals to establish a fair rents tribunal which would give recourse to the courts for tenants and landlords. Compounded as it was by the unanimous support of 84 Government Deputies, I found that rejection particularly sad because it flew in the face of a written guarantee given to the association representing flat dwellers prior to the election that the Government would commit themselves to the introduction of a fair rents tribunal. That letter, dated 7 June 1977 and signed by the National Director of Elections for Fianna Fáil, Senator Eoin Ryan, is there for all to see. There does not appear to be one shred of interest in implementing that proposal, not one suggestion that at some stage in the future that proposal will be implemented.

An Leas-Cheann Comhairle

All we are dealing with in this Bill is rates on flats.

Mr. Keating

I am trying to point out to this House, and I will not be easily diverted from that course, that the attitude of the Government to giving the rates abolition to tenants is epitomised by their attitude to the rents tribunal. This was also a pledge and it is not just being reneged on but is being totally opposed by the Government. If that is symptomatic of their general attitude, then the ratepayers may expect a similar deal in relation to this Bill.

Apart from the ludicrous suggestion that a tenant would take the extreme step of going to court, if the Government are serious about giving some measure of guarantee that tenants in private rented accommodation will get their entitlement, they must do better than the proposal in the Bill. There are a number of insidious aspects of the financial implications for flatdwellers. Until the end of 1976 the landlords association—and I have sympathy with the difficulty they have in trying to maintain housing stock and believe that they have been ignored over the years—consistently maintained they were businessmen, that their flats were business properties and that their incomes and outgoings should be seen as such. By their own definition, if you like, perhaps they should have been ineligible for rates abolition. Perhaps they should not be entitled to it because they saw their role in the community as being a commercial one instead of a social one. It is perfectly clear that the abolition of rates in the context of private rented accommodation only benefits the landlord. I am not against benefit accruing to landlords but no Government has a right to pretend they are giving certain rights and concessions to tenants.

With regard to referring the matter to the courts, I have no doubt that the courts will not be invoked to adjudicate in such cases because anybody in their normal mental state would hardly go to court and immediately incur the wrath of a landlord who could eject them.

Another aspect that is worrying is that there are implications in relation to housing policy generally. Earlier I suggested that the Government should consider the possibility of allowing the rent paid for private accommodation to be offset in part or in whole against income tax. The introduction of such an allowance would be an indication of the Government's desire to ensure that the benefits of which we have heard so much, and which won a massive political endorsement, would be passed on to the people entitled to them. At present the irony in the situation is that there is growing evidence that quite a number of single people are buying family houses because of the mortgage interest allowed. Therefore, there is a growing anomaly in that people who are, to use the Minister's colleague's words, relatively well heeled and articulate are getting benefits and tax concessions from the State while people who are struggling to bring up families, often in shoddy accommodation in which neither the Government nor the local authorities have the slightest interest, are being deprived of a concession.

An Leas-Cheann Comhairle

The Deputy is now doing two things. He is repeating what he said before Question Time and he is not relevant to the Bill. You cannot talk about income tax and taxation.

Mr. Keating

Am I in order to suggest to the Minister ways and means whereby the benefits which I believe that flatdwellers are entitled to could be given to them? Is that in order?

An Leas-Cheann Comhairle

It is in order to deal with the abolition of rates on flatdwellers.

Mr. Keating

I seek a direction. Is it in order?

An Leas-Cheann Comhairle

It is not in order to talk about getting reliefs on income tax to a Minister who has no responsibility for it.

Mr. Keating

I do not wish to argue with you, but I was asked by the other side of the House this morning how this could be achieved and I am responding sympathetically to the question.

An Leas-Cheann Comhairle

It is not in order to repeat everything you have said before questions.

Mr. Keating

Some of the content is not repetitious and it needs to be stressed because the Minister now standing for the Government is not the same man who was there this morning and I have a democratic right to——

An Leas-Cheann Comhairle

The Deputy certainly has a democratic right to air his views here but not to repeat them and the fact that there is a Minister of State standing in for the Minister does not mean that the Deputy repeats his whole speech for the benefit of the Minister of State.

Mr. Keating

I did not do that and it is an improper suggestion to make, with respect to you.

I should like again to draw the attention of the House to the question of valuation. I should like some Government response to the question of the growing fear of people of the new enthusiastic zeal for revaluing property. I want to know the reason for it and whether the Government are willing to deny categorically that there is no suggestion of the rates being re-introduced by a backdoor method under any other guise. It is important to put this on the record.

The question of the sovereignty and fiscal power of local democracies, which I consider to be fundamental in the Bill, is also relevant and very central. I talked about that before lunch. I do not intend to go into it in any great detail except to say that I assume at least that the Government will not be so bold in their reply to this debate as to pretend that controls of a very strict nature to the powers which local authorities have have not been introduced. That is beyond doubt. Indeed the Government side of the House have already admitted that in this morning's debate. What we should be talking about here, if such controls are deemed to be necessary in any situation, is the type of control. There are grave dangers in the Government Bill, in the implications it has for the manner in which local authorities can order their own finances internally and also with regard to their powers for raising money. Indeed, in the Dublin City Council alone we have had examples of this and I have no doubt they are common throughout the country. The Minister of State, as someone with substantial local authority knowledge and experience, will be quick to recognise that. It is very important, unless the whole concept of local government is to become even more farcical than it is at the moment, that it does not become a rubber stamp for central government. Therefore substantial fiscal sovereignty of a clearly defined nature with genuine delegated powers of responsibility should be openly expressed as part of Government policy. Instead of that we have the opposite in this section of the Bill and that is very regrettable.

I assume we will have, in due course, a statement from the Government about the premature disclosure of this Bill. I mention that because I hope it is not being forgotten by the Government. We want to know how it came to be prematurely disclosed by the Government. It is relevant to this Bill.

Finally, I would ask the Government to consider sincerely the concern of all of us who would like to see social justice permeating all levels of our society. I am aware of the discussions which the Government party had prior to the election with the landlord associations. They had two meetings subsequent to which certain guarantees could be given about the kind of actions the Government would pursue in office. I would like to think that the evidence so far, which is that the Government are primarily concerned about some echelons of society to the exclusion, to the detriment, to the impoverishment of other levels of society, will now be reversed and that we will see in practical terms, particularly with regard to people who are in a very difficult plight in parts of "flatland" and urban areas, a reversal of the Government tradition for the last year and a half of caring about only certain levels of society to the exclusion of others.

There is undoubtedly a measure of social justice to be granted to these people. It has not been done. This is in direct conflict with what the Government promised. I know that if the Government wished they could railroad this Bill through the House. The numbers are there. I am long enough here to know that that is apparently the way things operate. I should like to think that we could be more flexible in our approaches than that, that the points being put forward would be seriously considered. If amendments were to be put forward by the Government they would be seen as a sign of strength and not as a sign of weakness. They would be seen as the ability to comprehend that one side of the House does not have a monopoly of wisdom or insight and that there are other experiences and insights which may be beneficial. This Bill falls far short of the promises that were made and the standards of justice for all members of our community towards which most of us in this House aspire.

Mr. N. Andrews

I listened with great interest to what the previous speaker had to say about the Bill. Some of the suggestions were worthy of examination and consideration and I would hope that they would in due course be examined and carefully considered. Obviously it is too soon to hope that any amendment could be made to a Bill of this kind because, first of all, we have to put it into practice. We have to see how it operates in practice and in due course we will see the benefits which have accrued, the faults which will have occurred in the Bill, the difficulties which will have evolved as a result. The suggestion that perhaps we should consider allowing flatdwellers to set off their payment of rent against income tax to some degree is worthy of consideration. There are other suggestions that Deputy Keating has made. I do not intend to repeat them. His contribution was a constructive and positive one. It bodes well for the future of this session in contrast to the contrary behaviour of some of his colleagues last year. There is no doubt that all political parties in the last election intended one way or another ultimately to abolish rates on private dwellings. The present Government undertook to abolish rates on domestic dwellings, schools and community halls. They said in their pre-election programme for the economy in the future that all private houses would be affected by this legislation and that the rates element in the rent on local authority houses would be removed. They also said that the rate content of the rent paid by tenants of privately rented accommodation, as Deputy Keating so rightly said, needs very careful monitoring.

I am not too sure that it is appropriate to take up so soon the suggestions made by Deputy Keating but I certainly see the merit in them. The attraction of our package and the way in which it has been thought out and put in black and white had some bearing on the success of the Fianna Fáil Party in the last election, but it was only one of many attractive items that were put before the people. We are not permitted to go into detail on that.

The inequity of the rates system is general ever since rates were first introduced in the mid-nineteenth century. Adjustments and various modifications were made in the system and as time went on it became more and more inequitable. For instance, a semi-detached house with small front and back gardens might have a rateable valuation of £35 while a very large house with ten or 12 bedrooms on three or four acres of land might have a valuation of about £12. Certainly there was no equity in that system and the reaction among the 850,000 householders who were each year asked to pay in some cases upwards of £500 to £1,000 was growing all the time. We recognised that earlier than the previous Government. Families were in the position that when the rates demands came in all other activities came almost to a halt. It was like a sheriff coming to take away anything that remained. No consideration was given in the rating system to the ability of people to pay. The man on a low income of £40, £50, or £60 a week had to pay the same as the person with £150 or £200.

There is no argument on either side of the House about rates being abolished, I am glad to say, but there is some argument about how rates on private flats or the rate content should be allowed to the tenant of each flat and how people in these flats can get the benefit. The suggestion by Deputy Keating and other speakers that under the system we have set up, whereby the tenants or flatdwellers can go to court to pursue the rate content in the rent, only very few people will do so is not really a serious suggestion. If people feel aggrieved they may appeal to the court. No great cost is involved and if they have a case the courts will support it as laid down under this Bill. The suggestion that they will not do this is, to me, rather arrogant. It assumes that people are not prepared to assert their rights. In my time as public representative of one kind or another I have never noticed anybody slow to pursue his rights whether in the courts, in social welfare or otherwise and I am sure that when the rate content involved in a flatdweller's rent comes in question the matter will be pursued. There is a very vocal organisation as we heard here to-day to support tenants. We had quotations from the Flatdwellers' Association and so on. The tenants have a very professional organisation to support them. I see no reason why the courts cannot be used at least as an interim measure to see how they go in the next year or two.

The fact that the Bill also covers the use of dwellings which provide lodgings and that this will not in itself disqualify premises from domestic status is very important. It means in effect that houses which are listed, as distinct from registered, with Bord Fáilte will not lose their entitlement to domestic rates relief. The Minister has said that registered guesthouses under the Tourist Traffic Act are in a different category from ordinary dwellings and as such cannot qualify for relief as ordinary dwellings under the Bill. That is eminently reasonable and I have heard nobody complain about it. Many registered guesthouses, in addition to accommodation permanently and specifically set aside for guests, will also include ordinary domestic quarters and such a guesthouse will qualify for some reliefs as a mixed premises. These matters have been mentioned by the Minister. His introductory speech was quite reasonable and I do not think anybody can argue with it to any great extent. I feel very much like somebody asked to speak on something on which not only is there unanimity in the House but in the country.

Whether the Opposition care to use every conceivable scare to frighten the people with alternatives to rates, whether they can continue to do that and maintain credibility as a serious Opposition, I do not know. We have heard that as an alternative to rates we will introduce a property tax of some kind and rumours are spread by the Opposition that some separate taxes will be laid on householders for public lighting, sanitary services and all the other services available. This is deliberate scaremongering. Unreasonable approaches of this kind frighten people and they have been frightened enough over the years by the constantly increasing rates bills not to be threatened in this way. It should be emphasised and they should be assured that there is no question of property taxes. Nobody has ever suggested this. A previous speaker mentioned that a house registration tax would be introduced. Where do the Opposition get this information? On what do they base their allegations about substitute taxation to replace rates? It is not a reasonable approach to their own defeat in the election to try to frighten people into disbelieving something which brought great relief to almost 1,000,000 householders.

The Opposition should not continue to suggest that alternatives will be found. If they intend to introduce alternatives if and when they return to office, they should come out and say what their alternatives are. Not once from the Government side of the House have I heard any suggestion from anybody that Fianna Fáil intend to introduce property tax, or house registration tax, or separate taxation for the ordinary services such as sanitation, water, and so on. If the Opposition have such proposals for the future, they should lay them on the line for the people and not attribute suggestions of that kind to us. If they intend to return to a different form of rates or taxation let them say so and not try to pin that on us.

It has been suggested that local government will be undermined and local authorities will increasingly lose their significance and their power. I do not accept that at all. Local authorities must be consulted about various issues such as road building in their administrative areas. The zoning and planning of their areas are subject to their own development plans. The feedback from local councillors and members of local authorities is part and parcel of democracy. I do not accept that this Bill can undermine in any way the autonomy of local authorities. We are told there will be a tight rein on money. Why not? Anybody running a business will ensure that his accountant keeps a very close eye on his accounts and his investments and how his money is spent. Why not? Why should we not keep an eye on how public money is spent and keep control of it?

A certain amount of money is available to every local authority. The suggestion—and I must say I thought it a mean suggestion—that local authorities who would not toe the line would be penalised by the withdrawal of a percentage of their allocations every year is unwarranted. Such an allegation is unworthy in a democratic Parliament such as ours. A suggestion that a local authority who do not agree with the manner in which the central Government are operating will be penalised by the withdrawal of funds or by a reduction in the allocation of funds is mean, and I regret that it was made. I do not think it arises at all.

A suggestion that the powers of the local authorities will be curbed is not on. I do not accept it. This is a very good Bill. It carries out what we undertook to do. We undertook to abolish rates on private dwellings, schools and community halls. We have done that. We undertook to abolish car tax. We did that. Our undertakings have been delivered in this Bill and I cannot see why anybody feels aggrieved about it. Every Bill put through the House is bound to hurt somebody, perhaps half a dozen people, or maybe 100 people. Every Bill makes a change and change frequently hurts a small minority of people. There is no question or doubt about that.

The cost to central funds of £8 million in a full year is an enormous amount. Obviously ways will have to be found to recoup some of the money. The Government have outlined the ways and means in which they propose to do this. Taxation is buoyant and more money than ever before has been flowing in to the Exchequer. The country has never been better. Anyone travelling in rural Ireland will see that money is available in enormous amounts. I am very pleased about that. The return to the Exchequer is there and will continue to rise. As a nation we have money which we must divide in so many ways. The real benefit of this Bill is that it removes the ultimate burden on householders. Every year householders had to find £200, £300, £400 or £500. Whether we like it or not, people had not the foresight to save £10 a week, or £5 a week, or whatever was required. Then the Bill came and contributed to an air of gloom and depression on the part of householders. The gross inequity of the system was such that it was no longer justifiable.

I hope the Minister will continue to review the operation of the Bill in the years to come. As things stand I do not see any necessity to amend the Bill. I am quite satisfied it covers precisely everything we undertook to do. I suppose it is fair to say no other Bill introduced so far has been welcomed by so many people. I congratulate the Minister on introducing this Bill thereby fulfilling the undertakings we gave in the last general election.

Mr. Bermingham

In this Bill the Minister implements the abolition of rates on private dwellings, schools and certain categories of community centres. I approve of that because the rating system was an inequitable system of collecting taxation since it did not take account of a person's ability to pay.

This Bill is designed also to finance the relief of rates and the methods adopted by the Minister for that purpose, despite anything that may be said on the Government benches, do away completely with the powers of local authorities. I say that from bitter experience. I have the honour to be a member of Kildare County Council. As in every other local authority, agreement was reached in Kildare County Council to pay certain increases in income, salaries and wages as a result of arbitration. Now, in my experience, there is just no way a county manager could include that item in his estimates last year. Had he included the Government's recommended 5 per cent increase I wonder what the Minister would have said to him. No way. The increase, of course, worked out roughly at 10 per cent because of productivity agreements.

What would the Minister have said to the county manager if he included an estimate last year of about 11 per cent for this increase?

We have a majority of Government representatives on Kildare County Council and we have always authorised sufficient to cover claims of this nature. It is now necessary to submit these to the Department for approval. Did we get approval? No. The manager was told he would have to find the money from last year's estimates even though he could not estimate for the amount at that time. As a local authority we have no power to overspend. That power has been taken from us under the system adopted for the abolition of rates. There are two options. The increase must be paid. The money will have to be found in the scheme of works we administer. In that eventuality employees will have to be laid off or the schemes will have to be rearranged. In our wisdom, with a majority of Government supporters on our council, we opted for a 16 per cent increase in the rates last year for works that should be done in the county. That was cut by the Minister to 11 per cent. Fair enough. We agreed with the abolition of rates but the Minister now expects us to provide increases in pay for our workers. They are entitled to these increases. As I said, we cannot overspend. All we can do is lay off workers or cut down on schemes. These are the options offered by a Minister who boasted about the money he was providing for the relief of unemployment.

Further restrictions will be imposed on local authorities. I have here circulars sent down from the Minister's Department. They have probably gone to every local authority. One is about housing. The Minister says he is allowing an increase in the loan up to £9,000. Everyone knows that unless you increase the income limit it is ridiculous to increase the local authority loan. No one earning less than £3,500 could dream of paying £90 a month loan repayment. Of course, £9,000 would not buy a house today. The prospective buyer will have to get £3,000 or £4,000 somewhere else. We are told we should encourage people to buy their own houses. It is no part of our responsibility as public representatives to encourage people to go into debt.

Another circular says we should make land available to the speculative builder, the idea apparently being to get this speculative builder to provide houses which should be provided by the local authority. This is the kind of thinking coming from the Department since the abolition of rates. If this is not taking power from local authorities I do not know what it is. There was unanimous agreement on the council that the money to meet the increases in incomes, salaries and wages was necessary and it was right and proper that it should be raised. Yet we were told that we could not do it. Under this Bill we have reached a situation where local authorities cannot do anything without the prior approval of the Minister or his Department.

It is obvious that most of the rates in any one year will go towards the maintenance of services already provided. There is not a local authority in any area who do not wish to improve their services. It has been said that 11 per cent was a very reasonable amount. I do not agree, nor do the council of which I have the honour to be a member. They are one of the most responsible local authorities and it was their view that 16 per cent was necessary. We always drew up an estimate in Kildare which contained a provision for an increase in services and this was to be provided from rates. Last year we were not allowed the increases which we desired. We were told to cut down to 11 per cent. Of course, we had advantages because it was a year in which we were owed certain moneys by the Department and we received certain grants. This year the crunch is coming. The increase of 11 per cent allowed last year was less than the inflation rate from the previous year. I assume that the rate of inflation, whatever way it is compiled, is now less than that. If the amount this year is to be less than the rate of inflation, then it will certainly be a restriction on the members of a council in the performance of their duties and in carrying out their aim of increasing services. This is a just aspiration for every member of a local authority.

In this Bill the Minister is implementing the manifesto promise to do away with rates, but he gave no consideration whatever to how the finance would be provided while leaving some power in the hands of local authorities. There was no idea about how this money was to be provided. It may be said that 11 per cent was a generous allowance. I know that people such as landowners and business people who were not relieved of the necessity of paying rates had to be protected from a huge increase, but the principal consideration was to protect the Exchequer because the Government were committed to the manifesto. No one likes imposing rates and local authorities inquire diligently to see where they can save one penny for the ratepayers. Now they are expected to keep within the limits laid down by the Minister.

Judging from the result of an application by our county manager requesting money to pay an increase in wages and salaries to staff, I can only assume that no matter what emergency arises we cannot overexpend and may have to cut down on services. As a member of a local authority, the Minister knows that there are many cases where money must be spent. The members of Kildare County Council authorised the manager to overspend by £85,000 in order to give increases in wages and salaries to their staff. The manager has now been told by the Department that he must find that money in last year's estimates. This could be done by laying off workers but, knowing the manager, I think that will not happen. The money must be raised by re-arranging at this late date the programme of work for the remaining three months of this year and by leaving out some necessary works. We must raise a further £85,000 and we are told that we cannot spend some of next year's rates. That was always done through the years and if that is not restricting the freedom of the council, what is?

We are told in circulars which are arriving by the dozen of all the ways in which we can spend less money. We can get bigger subsidies for private sites and we can sell these sites at a subsidised price. I give credit to the Minister for increasing the subsidy. We can give a loan of £9,000 in order to build a house on such a site which, at the present market price, will cost £12,000. The person's income must not be over £3,500. This kind of talk is rubbish, and I say that seriously. The Minister knows, because he is a practical man, that a man who has to repay £90 per month on a loan of £9,000 cannot do so on an income of less than £3,500, that he must go elsewhere to get another loan of £2,000 or £3,000.

We have been told to have another look at applicants for local authority houses. Several circulars have been issued to local authorities telling them that they must restrict housing lists to three-member families. I know many people who have not got families through no fault of their own and who are living in extremely bad conditions. Such people are being forced out of the housing lists, and to my mind this is a strategy of the Department to cut their losses through the abolition of rates.

An Leas-Cheann Comhairle

I have given the Deputy a lot of latitude but I would remind him that we are not discussing housing and that he cannot be allowed to go into detail on that matter.

Mr. Bermingham

I am not going into detail. I am talking about the circulars that have been coming to local authorities which are just suggesting ways and means of taking the burden of rates from the Exchequer.

An Leas-Cheann Comhairle

The Deputy may not go into detail on loans, grants and housing costs. He may discuss the financing of local authorities and the abolition of rates.

Mr. Bermingham

Even when they collected rates, the income of local authorities was very limited. The Minister has said that two-thirds of the rates revenue is now payable by the Department. To my mind local authorities will spend 95 per cent of any limited increase in allocation simply to maintain existing services. They will not be free in future to develop those services in the way they would wish because any increase in allocation will barely cover inflation. Indeed, last year it did not even come up to that level.

I have given an indication of the predicament in which the county manager of my area finds himself. He is now in a situation where he cannot even estimate for the current year. It is in this way that the limited powers local authorities had are being whittled away and if this continues councils will become mere talking shops and they will be severely restricted in any improvement they wish to make. This Bill will further restrict any powers they had.

I do not accept that the abolition of rates meant anything to old age pensioners. They already had waiver of rates. Now an old age pensioner is in a worse position. He sees a man living in a £50,000 house in a position where he does not have to pay rates and he does not have to pay tax on the two cars he owns. Although I agree that the abolition of rates has merits, I seriously suggest that it has created anomalies of the type I have just mentioned. If there is to be local autonomy there must be some form of local taxation. I say this while agreeing that rates should have been abolished because they were inequitable in that people had to pay them even though they had not the capacity to pay. The fact that the central Government are providing all the money for local services may make people wild in their demands whereas if there is local taxation in some form they would be more careful. If Government Departments are to have control of local purse strings the local authorities will not have power to do anything.

Let us be honest about it. Local authorities will not have any power unless they have money. I can go to local authority meetings and demand money for road building and for the extension of sewerage facilities but unless there is some money available it cannot be done. In my experience local authorities have been most responsible and have not spent a penny unwisely. That record is there for all to see.

I should like the Minister to explain how local authorities will have powers if there is such a severe limit on their expenditure, as has been proved by our application to overspend a few pounds. If a local authority is to be subjected to such restriction it has no powers. I accept that the Bill was necessary in order to implement what the Minister is proposing. His party gave a promise in their manifesto to abolish rates on private dwellings and on certain other buildings and they are doing that. However, I am justified in saying that they made no attempt to say where the money was to come from. Even with the best will the Minister is controlled by budgetary policy and by overall Government policy. The power of the councillor in the many councils throughout the country will be very curtailed. There must be some other way by which the local authorities can call on finance other than by coming cap in hand to the Department.

I do not know if it is the intention of the Department of the Environment or the Department of Finance to impose some other kind of tax. If that is the intention I am prepared to consider it on its merits. I do not know to which Department the Valuation Office are responsible but I would like to tell the Minister that there is much hurrying and scurrying around my constituency raising the valuations. I do not know at whose request this is being done but I do not think it is at the council's request. I think it is being done because of a Government direction. Valuations in my county are being increased substantially. I do not know the purpose if rates on private houses are gone forever as we were led to believe. Perhaps there is the prospect of imposing some further tax. I presume the Government are not anxious to give our council more money because the fact that valuations are greater increases our demand. I doubt that the Department are so anxious to give us more money that they are hurrying around my constituency increasing the valuations.

Mr. Barrett

Any change in valuation has to be at the request of the local authority.

Mr. Bermingham

I doubt that.

Mr. Barrett

That is the position.

Mr. Bermingham

I accept the Minister's explanation and I thank him. Unless the local councillor has some say in the amount and the method of raising taxation there is no use in our kidding ourselves that we are leaving him with any power. He has no power.

Dr. Woods

I should like to congratulate the Minister and the Cabinet on the measures they are taking in this important Bill. As Deputies from both sides of the House have said, it is a Bill that will honour the commitments made in the manifesto in relation to the removal of rates on domestic property. In the past Fianna Fáil were prepared to lead not only nationally but internationally in providing a scheme for the sale of local authority houses to tenants. That scheme has been modified several times since. It has been widely recognised as being valuable and worthwhile and has been readily adopted by our people. In this area Fianna Fáil led internationally and once again Fianna Fáil are leading in the abolition of rates on domestic dwellings. Other countries have come here, particularly the British, to see how such a measure could be operated. In this respect the Minister and the Cabinet are to be congratulated on the steps they have taken.

I must disagree with my colleague, Deputy Niall Andrews, who said that rates were to be abolished anyway. I think there is a little more to it than that. In fairness to the Coalition I would say that they were prepared to stabilise rates on domestic dwellings and in that sense I would agree with Deputy Andrews. Certainly they showed they were prepared to stabilise the rates but the Minister's statement shows that they were having considerable difficulties in the matter and, in fact, the figures show that the average rate in the £ in the period 1973 to 1977 rose from £6.70 to £9. The Minister went on to say "Our initiative has been bolder and more clear-cut in taking these steps to remove once and for all the burden of rates from over 850,000 householders and other persons who would benefit from these reliefs." It is important that we recognise the step that was taken here. There was no equivocation about it, there were no half measures. A clear-cut and decisive action was taken.

Listening to some of the Opposition Deputies I thought they were not really convinced about what they were saying. They should clarify in their minds whether they are for the abolition of rates totally on domestic dwellings or whether they are against it, not whether they are grudgingly for it. Deputy Bermingham said the proposal had merit but maintained that it was not all that people thought it was. This typifies the approach we have seen in this House since the measure was introduced.

Deputy Bermingham went so far as to suggest that some form of local tax would be necessary in place of rates. The Oppositon should get their minds clear on this. Fianna Fáil were very clear-cut, as the Minister says. They took decisive action, and I hope this Government will continue to keep up this standard shown in making such an effective approach and being so decisive in the effective steps which were taken. Such measures will be feasible only where the people in general act responsibly.

The point has been made that the savings in rates are an increase in net income for the majority of people. The Minister for Economic Planning and Development made this point very clearly at various stages during the last year. I believe that people recognise what has been done and that they will act responsibly, but we must remind ourselves that the majority of people have gained in this way. I like the concept of security in the home irrespective of income or circumstances, because I am very much a family man. Consequently I was very pleased when the Government took this action and when the commitment was made in the first instance in the manifesto. Several people have pointed out that, although this now applies to widows, pensioners, the unemployed and various other people, some of these people would have benefits from the previous system of the waiver of rates. It is important to bear in mind here that this involved the means test which most people regard as demeaning and which always led to a great deal of debate and contention, particularly in border-line cases. Therefore, I very much welcome the view and the approach taken by the Government here.

I also welcome the removal of rates from community halls and bona fide secondary schools. Having been involved deeply in one community hall from the time its foundations were laid by the late President Childers until the hall went into operation, I thought it was scandalous that such a hall should be charged rates and that the people who in a bona fide way worked voluntarily for the community should have to find these rates. I am very pleased that the Minister has taken this step in relation to community halls, and to secondary schools where it would affect particularly the voluntary secondary schools who are already struggling under fairly difficult financial burdens.

Like some other Deputies, I am concerned about the position of flatdwellers. The Minister has provided for them to get relief and he has pointed out that the Bill contains a number of provisions designed to ensure that the benefit of domestic rates relief is passed on to the tenants of rented accommodation. I am pleased that the Minister has attempted to pass on these reliefs. I recognise that landlords in some cases may be reluctant to pass them on and may not do so. I ask the Minister to exert any pressure he can on such landlords to ensure that they pass on the benefit to their tenants.

Deputy Bermingham and other Deputies during this debate raised the question of the loss of power at local authority level, suggesting that without rates the money will come mainly from the central fund. It is clear that approximately 40 per cent of the income of local authorities will still come from the non-domestic sector and from commercial rates. In the short term the Minister has instituted a very fair method of allocating the fund's resources and he has done his best to meet the points raised during the debate on this issue. We all, including Deputy Bermingham, must recognise that there must be financial responsibility at local authority level within the overall plans and achievements of the country as a whole and of the Government in power at any time. It is a good concept to think in terms of us all growing together in relation to our national achievements and ploughing these back into local areas and so working collectively, nationally, to increase the growth of our economy and the wealth of our nation.

The abolition of rates highlights the need for local government reorganisation. I am very much aware that the Minister in his recent speeches has promised a review of local government organisation. I ask him to take early action on this review from a number of points of view. Within the organisation structure as it stands at present or with the changes which are taking place there is a need to look at the delegation of responsibility. I am also concerned that the Minister might consider providing a consultative body for community councils and responsible community associations, preferably before we go into next year's local elections. This is important because the growth of voluntary community organisations and bodies is very much a feature of life today. Whatever the ultimate developments are, it will be very valuable to provide at least such a consultative body who could meet community councils and responsible associations say twice a year for the purpose of putting their views to the elected councils and representatives of the local authorities. I support the Minister's promise to review local government organisation within a reasonable time. I hope that this will be done as early as possible and that he will take action, whatever it may be, preferably in advance of the forthcoming local elections next year.

Debate adjourned.