€60m hole found in Noonan's figures
Published 08/12/2011 | 05:00
FINANCE Minister Michael Noonan has massively miscalculated the amount of money the Government will make from the controversial €100 household charge, the Irish Independent has learned.
And Mr Noonan could end up with egg on his face over his Budget statement that the charges needed to bankroll local services will raise €160m next year.
The Department of the Environment, which will collect the charge, has told the Government that it may raise only €100m in 2012. The €60m shortfall will inevitably lead to many key roads around the country rapidly deteriorating.
The monies raised from the new charge will replace the axed €164m Local Government Fund. There are some two million homes in the country, but around 400,000 households are exempt from the new charge.
In his Budget speech, Mr Noonan said that €160m would be raised by imposing the €100 charge on the remaining 1.6 million householders in 2012.
This, of course, assumes that everyone will pay up.
But the Environment Department, in its recent Comprehensive Review of Expenditure submission to the Department of Public Enterprise and Reform, takes an entirely different position.
It said that "the charge may raise an amount of the order of €100m in 2012".
And it even concedes that some €30m of this will have to be ringfenced by the councils to enable commercial rates to be reduced.
Observers believe that the €160m collection target is far too optimistic given the public response to demands for other charges. If householders refuse to pay the €100 household charge they can be hit with penalties for late payment, similar to the holiday home charge.
The charge must be paid by the end of next March, and a late penalty of €10 will apply if paid within six months of the due date, €20 between six and 12 months and €30 if the payment is 12 months late.
For persistent non-payers, any outstanding payment remains as a charge on their property which they will not be able to sell unless it is paid.
This €60m gap will pose a major headache for the local authorities already grappling with a huge cut in funding for roads maintenance and repair.
But an Environment Department spokesman said last night they were confident the €160m collection target would be met in 2012.
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