Donohoe says water refunds will not affect public services

The €178 million cost of refunding water charges will come from Goverment underspending this year and will not impact on public services, Paschal Donohoe has said.

The Minister for Finance said he expects €300 million will be available due to capital and Government underspending this year, of which between €40 million and €50 million will be from the capital budget.

He said the Department of Housing budget, for example, had increased by 50 per cent this year, but due to changes in the planning process some projects will transfer to 2018.

“Many of the political parties said that water should be paid by general taxation. That’s what we’re doing now. We’re making it happen now in a way that public services continue not to be affected,” he said.

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He also acknowledged in the “whole water saga things could have been done differently”.

The Minister said he was looking to “mitigate” the consequences of the water refunds and this can be done “ without raising taxes or changing capital expenditure”.

"Fianna Fáil want people who have paid to be treated equally with those who have not paid. I expect my colleague [Minister for Housing] Eoghan Murphy will be engaging with deputy [Barry] Cowen," he told, told RTÉ's News at One.

Criticised

Earlier on Thursday, Sinn Féin TD Pearse Doherty strongly criticised the prospect of using unspent capitalfunds to repay water charges.

Speaking before the Oireachtas Budgetary Oversight Committee, Mr Doherty said it defied logic to divert unspend housing funds to cover the cost of water refunds in the midst of a housing crisis.

Replying to this point Mr Donohoe replied: “We cannot have our cake and eat it here. We can’t be in a situation where the Oireachtas decides or a political party decides they want to pay for this out of Government expenditure and they want to pay to out of taxation and then when I look to try and do it then be in a position where people say ‘hang on the choices you are making are wrong’.”

Mr Donohoe said he and Fine Gael had argued otherwise during the debate on water charges but lost.

The Minister said the Government had to live with the outcome determined by the Oireachtas committee on water charges.

Meanwhile, Fianna Fáil spokesman on housing Barry Cowen has written to Minister for Housing Eoghan Murphy to express his concern over the lack of clarity on where the money to issue refunds will come from.

Repayment

Mr Cowen said there had been no conversation between Fine Gael and Fianna Fáil about how or when the repayments would be made.

The letter, seen by The Irish Times, says his party finds it surprising there is enough unspent monies in 2017 to cover this cost.

Mr Cowen said: “It is disappointing that this announcement was made without much thought or any discussion at Cabinet or political level.”

Mr Cowen also questioned why the Government cannot identify a method to prevent the 190,000 from keeping the conservation grant even though they did not pay their water charges.

He added: “It is important that people know the extent of how this proposal was actually examined.”