New Lines of Revenue Needed to Alleviate the Burden of Rates for Business
Introduction of Broad-Based Charges Will Reduce Local Authority Budgetary Pressures
Chambers Ireland’s Ratepayers and Local Government Policy Council has today (12/10/10) called on Government to introduce new broad-based revenue streams for local authorities and move forward with the significant cost containment strategies identified in the Local Government Efficiency Review Group (LGERG) Report in order to address the fall in Government Subventions to Local Authorities from 32.44% in 2005 to 24.48% in 2010.
Seán Murphy, Council Spokesperson said, “Local Authorities will spend approximately €4.54bn in 2011 on essential investments such as front line services, infrastructure and water provision. Businesses will directly contribute approximately €1.5bn to this. This is in addition to their contributions to the Local Government Fund (which is derived from motor taxes raised from commercial and domestic vehicles).”
“While the contribution from business has fallen, this is driven by the reduction in the number of operating companies post-downturn and the collapse in forecasted development contributions income from the peak of the building boom. This change underlines the parlous nature of many local authority budgets at this time and their need to be moved to a more sustainable broad-based funding model.”
“Although the Government has made good progress in identifying new revenue streams such as the Non-Principle Private Residency (NPPR) tax which has generated €130m, more needs to be done now to deliver additional revenues locally to fund services. Specifically we need a timetable for the introduction of a domestic water charging regime that will fund the water infrastructure investments needed at the local level.”
“If we are serious about restoring competitiveness, then the Government must also move to reduce the amount of rates and charges that businesses are forced to pay. This can be achieved by executing the €500m cuts identified in the LGERG Report and giving real consideration to applying the costs savings and economies of scale identified in the Brosnan Report on Limerick Local Government nationally and passing the savings achieved back to business by way of reduced charges,” Murphy concluded.
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