Eight reasons why increase in diesel tax would be huge blow to rural Ireland

Extra costs would hurt family, farm, social and business life, says Irish Rural Link CEO

A cost increase for diesel would push more families into poverty
A cost increase for diesel would push more families into poverty
Seamus Boland

Seamus Boland

The rumblings among those who purport to know the contents of the next Budget suggest that diesel prices will be targeted with extra penal taxation.

It is a move, like the more dramatic UK plan to ban diesel/petrol sales by 2040, to reduce carbon emissions and assist the process, already supported by the EU, of significantly minimising the use of the fuel for transport.

Diesel has been held up as an even more dangerous health pollutant than was originally thought.

Like all proposals aimed at doing good, the rumoured and suggested budgetary measures would have a devastating effect on rural dwellers, their businesses and the services they need (already under severe threat).

Here are just some reasons why the Finance Minister should pause before introducing such a drastic provision.

1. Punitive increase in the cost of living

Comparative studies on the cost of living in rural areas have already proved there is a difference of up to €100/week in favour of the urban family. The main reason for the increased cost to rural families is transport and their dependency on the car. Further pressure in this area will increase the income/cost gap and push more rural families directly into poverty.

2. Penalisation of people with jobs (or people who get up early)

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Depending on the distance between home and workplace, many young people cannot afford to take a job unless it is close to where they live. Given the fact that much of the available employment for first-time employees is on or just above minimum wage, it becomes imperative that the cost of travelling to work is minimised.

One way of doing so is to own a cheap second-hand diesel car and take advantage of the lower cost of the fuel and the longer distance gained as a result. For many families it is often more economic to receive social welfare than take up employment that is unsustainable because of the transport costs involved.

3. Damage to social interaction in rural areas

A recent report by Senator Marie Louise O Donnell, 'Finite Lives', highlighted the benefits of healthy social interaction as a means of fighting loneliness. Unfortunately, due to the scattered settlement nature of housing in rural areas many households live far from pubs, halls, football pitches etc.

Many parents find there is a necessity to have two cars so their children can participate in sporting and cultural activities. For hard-pressed families the only decision to make is to forgo the activities so necessary for their children's' development.

We are seeing the demise of the Irish pub partly due to necessary strict drink-driving controls.

For older people the cost of a taxi or other means of transport would also increase if diesel is hit, making socialisation events unaffordable.

4. Increased cost of services

The Post Office, banks, health services and many more tell us they are leaving rural Ireland because remaining there is cost prohibitive. An increase in diesel does nothing to ease that pressure.

Equally for people needing to get to hospital appointments, taking children to schools (remember free school transport only applies outside a three-mile limit) or the many other necessary family events we need to attend, there is already an unavoidable cost. New services, which are already scarce in areas like these, will not be proposed.

5. A blow to investment in agriculture, towns and villages

One of the measures promoted by government policy to raise the profile of villages is the encouragement of job creation. In many rural areas, this means establishing small enterprises. Again because of rural location this can mean some higher costs, particularly if there is a need for a delivery fleet to ensure their products get to market.

There is also an extra cost in getting raw materials to rural locations.

Remember, the average income on Irish farms is just above €24,000. Diesel, essential for running farms, is already a significant cost. Any proposed increase would squeeze incomes and production output even further.

6. There is no provision for alternative transport

Local community transport is still woefully underfunded and the proposed rural taxi scheme failed to take off. Electric cars are not tenable and since goods can only be moved with diesel-based transport, rural areas are a long way from an alternative.

Taxation, particularly tax introduced to encourage development of a public good offers something in the provision of alternatives.

Sadly, as the carbon tax introduced in 2010 shows, people affected cannot easily reduce the use of motor transport. In rural areas it is a necessity. Instead they make savings on food, or other essential services.

7. No ring fencing of monies raised to ease the hardship

The failure to ringfence any of the hated carbon tax and use it to ease the costs of transport should warn us that proposals to use tax earned in this way to help lift the burden in rural regions will fall on deaf ears. The paucity of thinking in imagining alternative transport and alternative tax reliefs is incredible and is guaranteed to lead some into poverty.

8. The proposal will not work

As the carbon tax has shown, reduction in carbon emissions does not follow from the imposition of punitive taxes. Around 40pc of our population live in rural areas. Their cars are not a luxury. The availability of diesel vehicles allows some respite for normal family life.

Of course any threat to health needs to be at least minimised or even ended.

However, it is of no consolation to families whose income is under severe pressure, who must choose other ways that equally affect their well-being (including health), that they must once again take a hit without any benefit.

Remember they will still have to use their diesel cars. Imposing a penal tax without any consultation or counter proposals to ease the pain, simply compounds the feeling that the views and feelings of people most affected are dispensable.

The solution? Acknowledging there is a problem and a little bit of imaginative thinking in resolving it.

Seamus Boland is CEO of Irish Rural Link


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