Kenny: reverse on water charges would need 4% tax increase

Fianna Fáil’s Micheál Martin dismisses Taoiseach’s estimate as ‘utterly bogus’

 O Connell Street on Saturday as thousands flocked to the city to demonstrate against the water charges. Photograph: Cyril Byrne / The Irish TImes

O Connell Street on Saturday as thousands flocked to the city to demonstrate against the water charges. Photograph: Cyril Byrne / The Irish TImes

 

Taoiseach Enda Kenny has said that a reverse of water charges would result in a cost equivalent to the top rate of tax being increased by 4 per cent.

In his first formal response to nationwide protests against water charges yesterday, Mr Kenny strongly defended the establishment of Irish Water while acknowledging that there were serious problems with the new utility.

Fianna Fáil leader Micheál Martin said the claims by Mr Kenny were “utterly bogus” and that a 4 per cent tax increase would provide many multiples of the money to be raised by domestic water charges.

Mr Martin said Revenue figures show a 1 per cent increase in the top rate of tax would raise €233 million in a full year. He claimed that net revenue from Irish Water is set to be about €150 million when recently announced concessions are taken into account.

Mr Kenny framed the water charge protests in the context of the next election, saying those who opposed it had not alternative funding proposals. He was speaking before the Fine Gael presidential dinner in the Double Tree Hotel in Dublin last night.

In a clear reference to Fianna Fáil and Sinn Féin, he said in Easter 2016 the Irish electorate would have a choice between continuing “to re-elect a government which pulled the country out of an economic swamp or hand it back to those who wrecked it or to those who offer no stability or consistency on how we pay for any of those services.”

Mr Kenny said the Government appreciated that people had legitimate concerns but argued there had been a great deal of misinformation peddled, including the assumption that people would be paying money to a private company. “Such is not the case and will never be the case,” he said.

Siptu president Jack O’Connor today backed calls for a referendum on the ownership of Irish Water.

The trade union declined to support yesterday’s demonstrations but said it was now backing calls from Sinn Féin and the Greens for a referendum to ensure Irish Water remains under public ownership.

Mr Kenny said the Government was now preparing a definitive plan to meet the concerns of people. “Over the next couple of weeks we will set out what people really want here which is certainty and clarity about how much they pay and what they pay for, how they can pay that and what they can get in return,” he said.

He said the Government would do this in conjunction with Irish Water and its parent company, State-owned Ervia.

He also argued that the set up of the company was necessary as it allowed a vehicle to be set up off balance sheet that could raise funds to repair the infrastructure and deal with the inadequate water services that had existed until now.

“I am not prepared to increase income tax by four percentage points at the top rate or do away with the tax package in the most recent budget,” he said.

Yesterday tens of housands of people took to the streets in towns, cities and villages across the country to protest over water charges.