Wednesday 28 September 2016

Hydration once again: we can sort this out

Published 05/03/2016 | 02:30

Anti-water charges protesters make their way down Dublin’s O’Connell St in February. Photo: Frank McGrath
Anti-water charges protesters make their way down Dublin’s O’Connell St in February. Photo: Frank McGrath

Let's start with positive news - water charges have passed the point of resuscitation and it's only a matter of time before they are declared officially dead. Some less happy news is that the swollen mega-quango known as Irish Water can't be dismantled without funnelling more money into its swamp-like belly.

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Since we appear to be stuck with Irish Water, at least steps can be taken to make the body fit for purpose. And there are advantages to having a central water utility in public ownership, as with the NRA for roads and the ESB for electricity.

So, the following four measures ought to be introduced. First: establish a system where a fair allowance is allocated based on household size. No change there, but users pay for any excess.

Second: issue a tax credit to those who have paid their water bills to date. Anyone not in the tax net who paid up, such as senior citizens, should receive a refund. Reimbursement must happen so that the State is seen to behave in an even-handed manner towards all citizens.

Third: hold a referendum to ensure water remains safe from privatisation. Public ownership needs to be enshrined in the Constitution - the current situation offers too little certainty because a government can change the legislation without consulting the people.

Fourth: all parties should accept that Ireland must have investment in water. But such a programme needs confidence as regards funding. Parties ought to agree figures for water investment from general taxation for the next decade, with that money protected. Without ring-fencing, competing demands in health, social services or elsewhere inevitably will disrupt upgrade plans for the water network. After a 10-year period elapses, the situation can be reassessed.

At the moment, water charges are being used as a bargaining tool by politicians, partly because abolishing them represents an easy score. The ability to magic away those vexing water bills offers an immediate result for Opposition groupings. See what happens when you vote for us?

The latest quarterly water bills have landed on door mats, and a general reluctance to pay has emerged amid the uncertainty. The six in 10 people who have been compliant - some gritting their teeth and doing it because they cannot bring themselves to break any law, even an unpopular one - now feel like chumps.

"It will be a wet day in hell before I pay again," said a texter to Sean O'Rourke's RTÉ radio show on Thursday. Indeed.

Even if an attempt is made to persist with water charges, realistically they cannot now survive. In much the same way that groupthink can spark a bank run, a collective resistance to paying water charges - the chump factor - will shatter the utility's revenue base.

The current ambiguity is unhelpful on many levels. Abtran, the Irish Water call centre in Cork, has received an increased number of calls since the General Election. But staff must be wondering if there's someone they can call - Micheál Martin, perhaps? The sub-contractor is based in his back yard. After all, they're bound to be feeling insecure about their jobs if water charges are abolished.

Investment in services rather than tax cuts were the primary issue in the General Election. And water does need investment: both to treat supplies, and to maintain and improve the network which delivers them.

Returning water management to local authorities is not a viable alternative to Irish Water. Remember, on their watch consistent underinvestment over a prolonged period took place. Besides, local authorities depend on central government for funds. Money they were counting on would be withheld if the Exchequer came under pressure - no votes in water infrastructure with grannies on hospital trolleys.

There's no help for it: funds must be set aside for a slimmed-down and accountable Irish Water to make the water system fit for purpose. Cash can be found for all sorts when parties are in election mode, and it must be found to modernise and maintain the water network. The public finances were deemed robust enough to eradicate the USC (Fine Gael); remove all but higher earners from it (Fianna Fáil and Labour); and do away with property and water taxes (Sinn Féin).

In one sense, it was odd how public anger coalesced on water bills as opposed to property charges, because at least with water we were offered something in return, theoretically. Clean, treated water (except in areas with 'boil' notices).

But the property tax is a revenue generator and nothing else.

However, the water charges offended people's sense of fairness. Cobbled together in a financially illiterate fashion, its introduction was mismanaged, with money drained away on bureaucracy, bonuses and consultants' fees.

No wonder people demonstrated against this regressive tax which flouts at least one of the three cardinal principles of taxation: efficiency, equity and simplicity.

Efficiency means collection should not consume too much of the tax, equity requires it to be fairly distributed and simplicity calls for it to be readily understood.

Equity is undermined because the charge was capped, with high water-consumption households paying the same as ones having medium water use. We heard a lot about conservation - there was even a misnomer grant for it - but conservation does not figure in the charging structure.

Business representatives are quick to complain they pay for water, and why give domestic users a free pass? In fact, the business world isn't particularly compliant.

A report on water services by PricewaterhouseCoopers found that in 2010 - the most recent figures collated - the commercial collection rate was just 52pc.

Some counties fell below 40pc, including Louth, Wexford, Clare and Offaly. Clearly, certain local authorities were more efficient than others at collection. There was also a lack of consistency regarding the amount charged per usage - another argument in favour of a centralised utility.

No political group can manage a quick fix on the HSE's problems, or put a speedy end to the homelessness crisis.

But water is one issue politicians could sort out soon - preferably without grandstanding, if that's not too much to ask.

Irish Independent

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