It’s time for someone to call it on water charges

Opinion: ‘We do need to invest money in our water infrastructure. This either doesn’t happen or it is paid for via water charges or via general taxation’

Tánaiste Joan Burton faces questions on water charges.

 

Why is it taking the Government so long to tell us what we will have to pay for water under its latest revised plan? It is complicated, for sure. It is hugely politically sensitive, of course. But the uncertainty is now feeding on itself and adding to the public’s view that no-one – even still – has a grip on all this. It is time for someone, somewhere, to call it.

Just look at yesterday. Tánaiste Joan Burton told the Dáil that she believed the annual charge would be less than €200 for a family with two children. Immediately Fine Gael sources were out saying this was too low. Burton’s spokeswoman said the figures included tax relief, which families can claim back, but not till next year.

Now as it happens €200 as a gross charge for a family with two children does look too low to make the numbers add up. If you do calculate in tax relief – or money back via household benefits packages – it might be roughly where we end up. But we are past the time for speculation on what we might have to pay. We need to know what we will have to pay.

The original target was to raise €300 million from households in water charges. Taoiseach Enda Kenny previously said that the average cost per household would be €238. As the number of households chargeable is just under 1.3 million, this all adds up.

The moves to lower the burden on bigger households – particularly families with adult children – will involve a cap on payments, probably at somewhere around €300, at least for a period of years. This will reduce the overall cash yield coming in to Irish Water from charges, though without the detailed data on household sizes it is difficult to say by how much. Still, looking at the figures I would reckon that to make the numbers add up and keep Irish Water off the State balance sheet, at least €250 million needs to be collected from households.

If this does not happen we face the vista, as Taoiseach Enda Kenny pointed out, of the vast bulk of the State spending coming back on the balance sheet for EU purposes, leaving an €850 million hole in the budget figures for next year.

The second part of the relief offered will be via extended tax credits and household benefit packages. For a family on PAYE this means they will still pay the charge in 2015 to Irish Water – meaning the money comes into its coffers – but they can claim money back the following year. How this works may change, but for it all to work the money still has to be paid into Irish Water. This is why just cutting the bills further will not work.

In the rush to fix this, you could also ask what is happening to the original objectives. One was to raise cash for investment in water, without burdening the exchequer. Less will be raised, now, via the charges and the State will have to fund some of it by the back door by granting tax and welfare benefits. The second objective was to get people to save water. But with the fixed charge period possibly being extended, the risk is that the water meters will look like useless little mini voting machines outside everyone’s house.

We do need to invest money in our water infrastructure. This either doesn’t happen or it is paid for via water charges or via general taxation. Now we face the situation where the biggest initial investment is in installing meters that are not going to be used for an extended period. Someone needs to tell us what the new plan is, and quickly.

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