WATER CHARGES:THE DEPARTMENT of the Environment will sustain some of the largest cuts of any department with funding for infrastructure dropping from just over €1 billion next year to €700 million in 2014, and current spending falling from €599 million to €370 million.
The funding reduction is to be offset by new direct taxation measures including a property tax from 2012 and water charges by 2014.
The property or site valuation tax will go directly to making up what would be a huge shortfall in funding for local authorities.
The tax will be charged at a flat rate of €100 for the year in 2012. It will be based on the value of the site in question from 2013, but is likely to average €200 a household.
The department estimates the tax will yield €180 million in 2012 and up to €530 million over the life of the plan.
Household water charges will not be levied next year and may not be imposed until 2014 following the introduction of a nationwide meter-installation programme. The Government has chosen not to introduce an interim flat rate of residential water tax pending the installation of meters in 1.2 million homes connected to the public water mains supply.
Up to €550 million from the National Pensions Reserve Fund has been earmarked to be used to fund the installation programme, which will be repaid from 2014.
The rates of the water tax have yet to be set, but the Government is proposing to provide a free allowance of 40 litres a person a day. A water regulator will also be appointed to oversee water pricing.
The introduction of water charges will reduce the general Government investment required to fix and maintain water infrastructure, reduce leaks, meet future water demands and comply with the EU water framework directive, the plan states.
The Government estimates water charges could save up to €500 million a year in the operating costs of providing water and further savings on the costs of capital water infrastructure projects in following years.
Funding for local authorities through the Local Government Fund is to be cut by €62 million to €164 million in 2011.
Cuts to the fund for the remaining years of the plan will depend on the revenues from the water and property taxes.
While the funding for infrastructure is substantially lower than expected, agreed projects will be delayed rather than dropped, the department said.
It also expects to get better value for money from more competitive tendering.
