FIANNA Fail would be willing, under certain circumstances, to participate in an all-party committee to draw up a consensus on the financing of local government, its spokesman, Mr Noel Dempsey, signalled yesterday.
He was responding to the invitation from the Minister for the Environment, Mr Howlin, to the main Opposition parties to form an ad-hoc group to consider the findings of the Government-commissioned KPMG consultants' report on the funding of local government.
The main recommendation of the report was that a local income tax, or local property tax, could replace the existing sources of funding without increasing the overall tax burden. The report also suggested that a local sales tax could provide substantial revenues. However, this would be difficult to formulate to be acceptable under EU regulations on VAT.
Launching two reports yesterday, Mr Howlin said that they now stood at a crossroads. There was a common view that the present system was unsatisfactory and local authorities had inadequate funding for the activities they were expected to do.
"However, while there is agreement on the existence of a problem, there does not appear to be agreement at this stage, either locally or nationally, on a solution. Local government financing is a sensitive and a contentious issue. There are no easy options."
Refusing to offer any Government view on the options put forward by the consultants, Mr Howlin said he was convinced the best way to advance the issue was by political consensus.
He was in favour of a new system of local government funding, he stated, adding that he would be more confident of an all-party approach being successful if it had been embarked on earlier in the term of the Government.
At a press conference, the Minister confirmed that a local property tax was now under consideration.
A tax on agricultural holdings was not excluded. The Residential Property Tax could also be on the table even though, strictly speaking, it was not a local charge.
If the all-party approach failed, Mr Howlin indicated he would bring the matter before Government in the autumn.
He gave no indication that the Coalition would implement new proposals to fund local government before next year's election.
There was no response from the Progressive Democrats to the Minister's all-party invitation last night. The party spokeswoman, Ms Mairin Quill, said the parliamentary party would consider whether the documents disclosed any basis on which a worthwhile all-party approach could be based.
Condemning the Minister for his failure to circulate the reports so that a studied response could be given at the appropriate time, the Fianna Fail spokesman, Mr Dempsey, told The Irish Times there was no way that he was going to let the Minister off the hook on financing while he made all the decisions about the powers and structures of local authorities.
If Mr Howlin was serious, he would propose a genuine, all-party Dail committee, rather than an ad-hoc group, with decision-making powers.
He said he would be prepared to participate in an all-party committee to attempt to arrive at a consensus on the funding if the structures and powers of local government could be considered as well.
The Government, he added, would have to undertake that it would accept and endorse any decisions made by such a committee.
The Fine Gael TD, Mr Paddy Harte, said last night the idea of a local sales tax to replace water charges and a residential property tax was a total non-starter. It was likely to be opposed by deputies of all parties in Border constituencies.
