All homes face €175 water bill in Greens' new deal
HOUSEHOLDERS face the prospect of €175-a-year water charges as part of the new coalition deal between the Green Party and Fianna Fail.
The introduction of the charges would bring in more than €200m a year in badly needed Exchequer revenue as the Government desperately seeks out new income.
Charging for water in every house was agreed by the government parties, at the Greens' behest, as a way to reduce waste and fund local government.
Departmental sources say water charges would fall outside Finance Minister Brian Lenihan's definition when he promised no new taxes in the Budget.
"It's not a new tax. It's a charge for a service," a source said.
The sting in the tail is that while it will take up to a decade to put in water meters nationwide, the Department of Finance is proposing an interim charge of €175 per annum.
In a similar vein, the commitment secured by the Greens not to have third-level fees reintroduced is expected to mean further increases on the current €1,500 registration.
The Greens signed up to staying in power with Fianna Fail for the next two-and-a-half years when it got the backing of 84pc of its members for the new programme for government.
The Greens will also be involved in selecting the new Ceann Comhairle to replace John O'Donoghue, who formally resigns tomorrow.
Green junior minister Trevor Sargent's name continues to be linked with the job in political circles, although Fianna Fail TD Seamus Kirk remains the favourite.
The new deal, which the Greens insist will be implemented, includes a commitment to introduce water charges based on a system where households are allocated a free basic allowance, with charging only for the amount used in excess.
But it will take years to install a metering system.
In the meantime, the Department of Finance favours bringing in flat-rate water charges of €175 per annum for every household until meters are installed.
Installing meters in 1.2 million households would cost up to €300m, over five to 10 years, according to briefing papers prepared by the Department of Finance for An Bord Snip.
The Department of Finance confirmed last night that the paper prepared six months ago remains its view on the matter.
But Green Party leader John Gormley is opposed to the flat-rate charge, as he feels it won't be accepted by the public.
"It probably won't be in this year's Budget, but detailed work will get under way between the Department of Finance, Department of Environment and local authorities," a source said.
Mr Lenihan is already finalising the details of the carbon tax to be included in the Budget, so there could yet be two different environmental charges in the Budget. Although the water charges would be highly contentious, there is the temptation of raking in over €200m.
But when weighing up the charges, ministers will have to be conscious of the protests which kicked off in 1996 when the Federation of Dublin Anti-Water Charges Campaign, led by Socialist Joe Higgins, provoked major debate. Mr Lenihan had to fend off Mr Higgins in taking his by-election seat.
Last night, Mr Higgins said the Greens would spark a water war if they tried to bring in the "hated water charges".
"Just as happened in the 1990s, there will be a massive boycott, with people power coming directly into play to defeat plans to introduce a water tax.
"It was such a campaign in the 1990s that forced the Fine Gael/Labour Party government to abolish water charges for the whole country in December, 1996," he said.