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Yet more on water charges… April 20, 2012

Posted by WorldbyStorm in Economy, Irish Politics, The Left.
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From the Irish Times:

Minister of State for Natural Resources Fergus O’Dowd said this morning people could control their bills for water usage by using less of it. “There were will be a standing charge of €40 every year, then a free allowance, and after that people will be in control of the water they use. The less water you use, the cheaper it will be for you,” he told RTÉ radio.
He said the country’s water infrastructure needed to be improved and that the Government hoped to raise €1.2 billion through the charges.

“The less water you use, the cheaper it will be for you.”

That’s alright then.

Er. No.

The assumptions behind this are telling, aren’t they? It has the same glibness that I recall from a conversation in 1989 when someone (coincidentally another member of Fine Gael) tried to convince me that the UK poll tax was equitable because everyone, whether an ordinary Joe or a Lord, paid the same.

But we know that individual circumstance dictates how much water is used. A larger family, an illness, and any of myriad other factors bear upon that usage. What’s so obvious is that in this brave newish world where there are ‘allowances’ and then flat rates, those who have significant incomes have least to concern themselves about. Whatever the costs they’ll be well able to cover them because clearly they’re not progressively scaled costs.

And by the way, this holds true of many other services from waste collection through to electricity. Those who can afford it will be little put out by the costs, those who can’t must simply try to get by.

In a way it strikes me that one of the areas that social democracy at its peak didn’t bother addressing was this sort of inequity. And that in an area where it could potentially have pushed forward it resiled. But then social democracy has, unfortunately, tended to be oddly hesitant once it moved beyond big ticket (and in fairness not unimpressive) achievements such as the NHS – though we never quite saw anything quite as spectacular on this side of the Irish Sea delivered by the local franchise of the SI.

Meanwhile, here’s a piece on the general topic of regressive charges from Michael Taft.

Key points? Well, unsurprisingly, ‘The impact of water charges is deeply regressive’. But what about this? ‘Regressive taxation made up approximately two-thirds of all taxation raised.’

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Comments»

1. Logan - April 20, 2012

You have to laugh at the way he says “You will be able to control how much you pay by how much you use”, and then a few seconds later blithely proclaim “we plan to raise X amount from it”…

Does he not realise that even a five year old could see that those two statements are incompatible?

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WorldbyStorm - April 20, 2012

That’s an excellent point Logan which I completely missed while getting more and more annoyed at the rest of it. You’re dead right, and it’s a contradictory argument he makes.

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2. John Goodwillie - April 20, 2012

If I understand WorldbyStorm right, he says that people with significant incomes are better able to pay water charges, and then goes on to imply that the same is true of waste collection and electricity. Indeed, it is also true of food, transport, and everything else.

It seems to me that it is much easier to start off with more equal incomes rather than to have adjustable prices for the things people buy with them.

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Ed - April 20, 2012

Well I guess it would be easier if it was the government that decided what everyone’s income should be, and it could just be changed by decree. As it is, ensuring that everyone will ‘start off with more equal incomes’ would be no easy matter. The government would have a few tools available: raising the minimum wage, for example; making it easier to organise trade unions; ending subsidies to private pensions and setting up a proper public pension system.

But one of the major tools they would have would be the tax system, which should be arranged to take more from the top end of the wealth scale. Water charges would be a form of taxation (unless the water supply is privatised, which would be a very bad thing in itself). That’s the obvious difference with food, which is supplied by private supermarkets, bakeries, butchers etc. Having different charges for transport based on your income would be very hard to implement, even though buses, trains etc. are under public ownership (although you could have cards giving people discounts, it works for OAPs).

But we already have an elaborate system for charging people different amounts of tax based on their income and other sources of wealth. A small army of people are employed to keep this system ticking over. If the government chooses to implement water charges based on usage, rather than ability to pay, that is a conscious decision on their part, it’s not because of practicality, they have chosen to raise money in a way that penalises those on low incomes. It shouldn’t be hard to see what’s wrong with that.

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WorldbyStorm - April 20, 2012

John. It would be great to have more equal incomes… but… one caveat, that wouldn’t necessarily address inequalities of usage that spring up (and I’m not talking about waste, which does exist to some degree) in a lifetime for some of the reasons I point to at the start. But in the absence of that I’m with Ed. We have a national broadbased system that can fairly forenscially determine income. Why not use that?

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3. John Goodwillie - April 20, 2012

Taxation is precisely one of the methods that I would advocate to ensure more equal incomes. The point that I was making is that people paying for water is fundamentally no different to people paying for food. Water charges are not a tax any more than bus fares are a tax. Public ownership of the water system does not change this any more than public ownership of railways means that rail transport should be free.

Some things (e.g. public parks) can be free because they cannot be overused. Food can be overused (people taking more than they need) and therefore should be charged for even if there was a monopoly supplier. Water can be overused and it is therefore logical to charge for it. Obviously water is a necessity of life which cannot be substituted for (in the way that one food can substitute for another), but this is adequately dealt with by giving people a free minimum supply.

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WorldbyStorm - April 20, 2012

I’m not sure how that entirely holds up re food or water. You seem to elide, to some degree, individual consumption and limits with collective consumption and limits. For example, an individual mgiht only be able to consume x amount of food or water, but a household/collective might consume many more times that. And that’s still not considering how individual circumstances might vary widely.

And water charges can most certainly be a tax depending on the nature of consumption. A free minimum supply doesn’t address the issues I raised above, does it? If I have some medical conditions, some forms of work, or if I have a larger family, then per definition I will consume more water. Yet my differing circumstance won’t be taken into account.

By the way, I’m not suggesting that food would be free, but what I am pointing to is the ‘ability to pay’ aspect is entirely ignored in these consumption models and that impinges mightily on water, or indeed food.

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John Goodwillie - April 20, 2012

There is a glut of points here so minimally referred to that I would have to ask what some sentences mean. The one point I can see clearly is the idea that households have different numbers of people in them. In principle, it would be better to have a free amount per person rather than per household. But this would require quite a big IT operation.

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WorldbyStorm - April 20, 2012

Hmmm… the basic point I’m making is that ideally in a world, such as we have where income isn’t equal, or anywhere near it, then if one is instituting charges for water etc those should be progressively scaled.

But failing that we could do, as suggested above, the simple thing and instead of depending on regressive consumption taxes go for income taxes.

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John Goodwillie - April 20, 2012

And the point I’m making is that one could argue on the same basis that the price of anything should be progressively scaled. And that water charges are not a consumption tax (a percentage or fixed amount which is added to the price): they are the price itself.

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WorldbyStorm - April 20, 2012

We could indeed argue that. I think that for certain things there’s considerable merit in it.

As regards water charges not being a consumption charge because they’re the price itself I’d be a bit dubious to be honest. You genuinely don’t believe that the rate they’re fixed at is subject to factors beyond cost? Or that they bear more heavily on those on lower incomes?

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John Goodwillie - April 20, 2012

Well, with all prices there are factors beyond cost like oligopoly, loss leaders, supply shortages and gluts. But with a publicly-owned water supplier I think below cost is more likely than above cost (of which a free amount would be an example).

Yes, water charges bear more heavily on those with lower incomes. But the same is true of all prices. The answer is to adjust incomes, not prices. I can’t see why those on lower incomes would in general use more water.

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WorldbyStorm - April 20, 2012

But it’s not about whether they use more water, though in some instances they might well, but about their ability to bear the costs of the charges in the first place.

And short of a somewhat utopian situation – at least from where we stand today – where is this equalisation of incomes likely to come from. Surely the better approach is a) either to fund it from general taxation, or b) to introduce genuinely progressive charging.

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John Goodwillie - April 20, 2012

Ah, but, you see, I think that general taxation should not fund the minority who will use water wastefully. And I think it is easier to get progressive taxation than to get progressive charging (not that either are easy).

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WorldbyStorm - April 21, 2012

So in order to deal with what you suggest is a minority it is better to introduce inequitable measures that bear down most heavily on those with least ability to pay?

In all honesty, given as admitted only today in the IT, that in the UK penetration of metering is only 2/3rds and unlikely to improve any time, and the Irish experience will be similar, leading to the point that up to one third or slightly more have estimated metering costs resulting in the payment of a flat charge the whole thing seems moot, at least in terms of any great principles at work about wastage, conservation or levels of usage etc.

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John Goodwillie - April 21, 2012

I do not accept that requiring anybody to pay water charges is inequitable any more than requiring them to pay for their food. But we clearly are not going to agree on this point.

On the second point, the figure of 2/3 has been denied, but metering will clearly not extend to everyone. The fairest solution would be to meter at the communal supply point and charge individual households a standard charge or the average consumption on that meter, whichever is the less.

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WorldbyStorm - April 22, 2012

If we require people to pay a water charge then I think it only reasonable that that should be a progressive charge. And in truth even the orthodoxy nods in that direction with derogations for various categories, though far from enough and far from sufficent.

The essential problem with ‘standard’ charges is that they’re utterly inequitable by any metric. Some will gain substantially. That can’t be right and it makes a mockery of assertions about equity, conservation and so on.

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Jack Jameson - April 23, 2012

John says:
I can’t see why those on lower incomes would in general use more water.

Those on lower incomes will be spending a larger proportion of their incomes on a basic necessity for living (you cannot survive without water) and hygiene.

What about the public health implications for families with children?

It’s all very well having a theoretical discussion about water charges in a Green Party world where incomes and taxes are more equitable but I’m paying my bills from my dwindling income in the market economy of the here and now.

Household and water charges are being imposed and enforced; fair taxes and incomes are not.

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John Goodwillie - April 23, 2012

“Spending a larger proportion of their incomes” on water is not the same as using more water.

As I said already, there is a case for an allowance per person instead of per household.

I am not going to oppose A because B has not been granted.

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4. dmfod - April 21, 2012

That 2500 word+ Irish Times article of course made no mention of the central reason for opposing water charges – that they are a form of regressive taxation that ignores ability to pay and disproportionately penalises people on low incomes http://www.irishtimes.com/newspaper/weekend/2012/0421/1224315002198.html

Instead we get a completely disingenuous redefinition of flat taxes as taxes that ‘make no distinction between thrifty people and spendthrifts’ and antipathy to this is said to account for opposition to the household charge. This is obvious nonsense as the concept of ‘thrift’ has no relevance whatsoever to the household charge. What both taxes do have in common is flatness vis-a-vis ability to pay.

About the only useful point, buried deep within the article, is a significant qualification of the media trope that rural people are already paying for their water through group water schemes. It turns out these are 80-90% subsidised by the government and so are analogous to private health insurance or schooling, where people who can afford it pay a premium for a superior service. This is the case in my locality, where some people pay extra for private water schemes, while the rest depend on the frequently malfunctioning mains supply.

This could be useful for building wider opposition as people on group schemes probably assume they’re going to be exempt from water charges. This may not be the case given the article claims they’re currently paying €0-€100 a year – a whole lot less than the envisaged charge of €175-400.

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LeftAtTheCross - April 21, 2012

On the rural aspect, one point we’ve been making here in Meath at the public CAHWT meetings is the linkage between sepctic tanks and water supply, the likelihood that both will be administered by the same private water company in the future, and that if people think they’ll escape water charges because they’re on private wells or small group schemes them they’re only fooling themselves because most of the households on such private supplies aren’t hooked up to public sewers either, so if they don’t get to charge for it on the way in they’ll probably catch you for it on the way out.

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5. readingthetwentiethcentury - April 22, 2012

how does this left-wing stance on water changes address the environmental need for conservation or moderation of consumption, without metering or charging? (I agree an indicated 10% drop in consumption isn’t much, but it’s better than nothing… which is what free water encourages)

and are there real examples of progressive charging for fluid (pun unintended) quantities? like would it be a band of charges based on consumption (for the first x, y, and z litres) or actually on income (so you’d pay a certain rate that would be linked to your tax band?)… progressive income taxation works quite well and is fair, but only because it’s complex and different amounts of income are taxed at different rates – it’s not stepped, so people don’t lose out by a slight jump in income. are you suggesting that there would be different water ‘prices’ based on income, or that you would pay an amount exactly proportional to your income? the former sounds like it could be less than fair in a lot of situations, the latter sounds very complicated to administer (though it could create jobs for clerical officers!).

the argument for paying for everything through direct income tax sounds appealing, but although that appears to tackle wealth fairly, it has its limits – namely the ability for those outside PAYE to hide income or to otherwise acquire wealth – so that’s partly why we need a ‘broad-based’ tax system. the better argument is probably not against non-income charges per se, but against them applying to genuinely low- and (low-)middle-income earners for who lack substantial other wealth. so property tax, and possibly water charges, with generous exclusions or (especially in the case of water, for conservation reasons) charges which apply to everyone but start at lower levels.

without some kind of workable alternative, these campaigns, if successful, will just push the idea of broader taxation out of reasonable political discourse – like in the late 70s and early 90s.

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6. Logan - April 22, 2012

I wonder if there is such an environmental necessity to resuce water consumption in Ireland? I know that water resources are precious and should be conserved, but from what I understand, about 30% of the water in Dublin is lost through leaky pipes. If that was fixed, I dont believe there would be an imminent water shortage for a long time to come.
I understand why the Troika wants metering – it will be regressive and make it easier to privatise, but i am not sure why the Green Party seem to think metering is such a necessity in THIS PARTICULAR case?
Is it just they reflexively want to charge by use for everything to make us conserve a resource out of principle? Because it would seem that, if they were being clever politicians they would oppose metering in this case, as it is not vital from a conservation viewpoint, and focus on furthering policies that will cut down on energy use and refuse disposal by utilising the user pays principle (which has made them unpopular enough in a lot of middle income areas already).

Could I ask a Green Party member to tell me, in what way would the environment of ireland be improved if domestic water consumption were reduced by 10% over the next decade?

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dmfod - April 23, 2012

I agree. There may be a water shortage in many countries with different climates to Ireland but there is no shortage of water here and there is no environmental connection between water shortages internationally and water use here.

If we still want to conserve treated water for purely economic reasons, the cheapest and simplest way is to fix the pipes and fund it through increases in progressive forms of general taxation like income tax on high earners, corporation or wealth tax. The real problem is not overuse of domestic water, which proponents of water tax admit can only be reduced by 10-16% at great cost through metering and the introduction of an income-inequitable tax, but leaky pipes, which account for 30-40% of all treated water being wasted.

There is also a major agenda here of seeking to privatise the water supply by first making it profitable through the introduction of charges – just as has happened with refuse – and then developing an export market for privatised Irish water that can be sold to countries with genuine water shortages. This is mentioned in the Irish Times article and is coming up more frequently in arguments for charges.

This is an environmentally-destructive policy as it would allow other countries to exceed their environmental limits by over-using what for them is a limited resource and then importing water. I don’t understand how Irish environmentalists can support this as it would clearly violate the basic green principle of local ecological and social sustainability.

The upshot is that there is no coherent environmental argument for water charges here, even if they might make environmental sense in other countries where water is limited. Basically, an international environmental argument has been inappropriately imported here and is ironically being used to promote socially and environmentally destructive policies.

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John Goodwillie - April 23, 2012

Even if the pipes were fixed, it is still desirable to conserve water because there is a capital and running cost for extra water supply. Consumption is increasing so we are dealing with a moving target. Dublin has an imminent shortage of water which is why they are talking of bringing water from the Shannon.

I doubt if export of water is a realistic proposition. It would probably be cheaper to purify sea water.

How you can regard charging for water as “environmentally destructive” I do not know.

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Logan - April 23, 2012

I agree that the country selling water is probably not a realistic scenario. However, I remember reading somewhere that if Dublin fixed up its pipes properly the whole idea of taking water from the Shannon would become a moot point for a century. I know there are higher fixed costs with greater use, but how does that stack up with the hundreds of millions in capital costs for water meters and the ongoing cost of running a billing system? If one was looking at it from an economic efficiency perspective alone, I think running the water service out of general taxation wins hands down.

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dmfod - April 23, 2012

Exporting water physically might not be feasible yet, but it could be in future if prices rise enough due to major climate change.

However the idea of Ireland effectively exporting water by using it as a selling point for attracting multinationals who have exhausted their domestic water supplies is already being pushed by the government and other interest groups. As quoted in the Irish Times article: “Ireland’s rich water resources will become of increasing strategic importance as the value of water increases globally … Ireland will be one of the few countries that will not be under stress for supplies. It’s an enormous opening; it could be the equivalent of oil to drive the economy.”

So on the one hand, we are being told there’s a terrible environmental water shortage and on the other we’re being told we should conserve it so we can sell more of it to corporations – which means there isn’t a ‘shortage’ in an environmental sense at all.

In effect, we are being asked to conserve our water so that companies can privatise and export it. This means there may be no ‘conservation’ or reduction in Irish water use, just a redistribution and privatisation of water. There might be an economic argument for attracting FDI in this way, but it cannot be said to be environmentally beneficial in Ireland, especially as water is a local resource, so conserving it isn’t globally environmentally beneficial in the same way as reducing carbon use.

The only environmental argument I can see for introducing water charges here is that the extra conserved water supplies might encourage the location of water-intensive industries here, rather than in water-deficit countries, which could help protect local water supplies in other countries. On the other hand, this could disincentivise developing less water-intensive production techniques and would probably mean the goods produced would have to be transported longer distances, if production was initially located closer to intended markets.That might outweigh the environmental benefit of relocating water-intensive production from countries that have a real water shortage, or it might not. In any case, that’s all pretty much irrelevant in terms of the actual debate here in Ireland now, as charges are being sold as an environmental measure with environmental benefits here – not in some other country – or as a general global environment thing like reducing your carbon footprint.

Strip away these illusory environmental trappings and you are left with a straighforward revenue-raising measure levied in an income-inequitable manner – with the added benefit of yet another subsidy to business and yet anoher carrot for FDI.

Because water in Ireland is a renewable resource that is not inherently in short supply, charges as a means of discouraging ‘waste’ make no more environmental sense than saying people should have to pay per use for other renewable resources like healthcare or education because providing them is also expensive and charging for them also disincentivises ‘waste’ through ‘over-use’. The environmental framing of this issue in Ireland simply makes no sense.

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John Goodwillie - April 23, 2012

Healthcare and education are by and large available only through a gatekeeper: doctor who agrees that something is wrong with you, educational course with minimum entrance requirement. There is also a community benefit to having healthy and educated people around.

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Mark P - April 23, 2012

There’s a community benefit to water too, you know.

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readingthetwentiethcentury - April 23, 2012

fixing the pipes sounds like a no-brainer, but it would also be very expensive and disruptive. ideally the money from the charges should go towards funding that, and charges themselves should provide a popular political impetus towards undertaking the work – no-one really cared about the level of wastage until the issue of charges comes along, or the disruption to supply in the cold snap; which in turn belies the idea that water is plentiful. treated, available water is in relatively short supply, and reports at the time pointed out that we have very little spare capacity compared to other European countries. it’s not an infinitely renewable resource, it still needs to be managed to some degree, whether that be through improving the supply or moderating demand. so conservation on an environmental basis still makes sense, albeit not with the same urgency as elsewhere (but why expand our capacity and use more water than other countries if we don’t actually need to? seems basically like greed)

the idea that it’s all going to be privatized sounds a little paranoid but also pointless: either way the logic is that water as public service remains under-funded and unimproved, so people can still have it free as a ‘right’, but allowing the quality to deteriorate to the point where privatisation is more easily sold as an improvement in itself. or people can start paying for it on a per-use basic as a public resource, and fund the necessary improvements directly rather than letting them be long-fingered on the general tax take (after all, with no charges, why be worried about leakages?) with the result that there would be a public argument for reduction in charges (if people use less water, and less is wasted, then it should be cheaper to produce… saving everyone money).

but it’s easier to oppose charges than it is to productively alter the level and use of general taxation. the anti-charges campaign would be alright if it confined itself to campaigning for exemptions or low starting levels of charges, in this case as with property; but in lumping everything back onto the chimera of progressive income tax when there’s no political likelihood in the near future of it being significantly increased, certainly not beyond the level needed to properly sustain education, health (both of which should be free, precisely because they’re often easier to opt out of) and social welfare, is just disingenuous leftism.

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WorldbyStorm - April 23, 2012

It’s hardly disingenuous leftism to be opposed to these measures, whatever that may be, when the state itself acknowledges that 1/3 of those supplied will be charged a ‘flat’ fee entirely unconnected to their actual usage which makes a mockery of the state’s claims on the issue. And it strikes me given polling data from IT/Ipsos MRBI which clearly shows people prefer these services funded out of general taxation rather than charges that you’re being very very pessimistic about the political space for progressive movement on this. Indeed the take away point I’d think from that polling data is that the campaigns for all their flaws have actually pushed the concept of equity into the mix on this issue in a way that it simply didn’t exist previously.

What’s fascinating is that something that was once an uncontentious element of social democracy – service provision by the state paid out of income taxes and not charges is now seen as somehow, well, you coined the phrase ‘disingenuous leftism’. It’s precisely because stands weren’t made in the past over such issues that social democracy, for all the many excellent aspects of it, fractured.

As regards wastage and conservation, what I fear is often the subtext of the ‘people don’t care about wastage and conservation until they ahve to pay’ line – though I’m not suggesting you intend it as such, is really one where those on lower incomes don’t care until charging arrives because realistically those on higher incomes won’t find such charges particuarly heavy to bear. But even were that the case, and frankly it would be interesting to see the effectivity of serious campaigns to conserve etc as against charging people in inequitable ways (after all commercial advertising works reasonably well so why not such campaigns?), it would still leave an inequity extant where those least well able to pay are asked to shoulder a significantly greater burden than those with more.

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readingthetwentiethcentury - April 23, 2012

I’d like to agree with more of that than I actually do, because I’m in firm agreement with the importance of social democracy.
I guess it depends how you look at it, but in that poll result I only saw the peripheral nature of income tax to the discussion – it was almost an add-on to the question, and it certainly didn’t frame it from the beginning. it’s only there because it’s the only plausible alternative to charges – had the question been rephrased ‘would you be willing to pay more income tax instead of charges’ I’m not sure the answer would have been as enthusiastic… more importantly, what would it be from the middle- and high-income earners on whom additional progressive taxes would have to be levied?
(as a side note I agree there is a substantial disingenuousness in the amount that is supposed to be ‘newly’ required for water, as if people aren’t paying a fair share – to some degree – in tax already – as in it may be individually free but not collectively so – but I assume we’re in agreement that overall more state income is required, not least for investment)

the idea that service charges for water and property are part of social democracy seems disingenuous too, though, given that they’re common in the rest of European and have been for some time (unless, um, you’re going for ‘social democracy in one country’!? :) does the purely progressively taxed state even exist, say in Scandinavia? and what about the solidaristic value of universal benefits – preventing the emergence of perceived distinct classes of ‘taxpayers’ and ‘recipients’ – does that not apply to some degree to universal charges?

I think in the end it comes down are some things commodities that have to be paid for – electricity, fuel (albeit with subsidies were appropriate, although there’s an economic argument that subsidies should purely be in the form of income and not ‘in kind’) – or are they things of greater social value – health, education – that deserved to provided as of right, at least up to a certain level or meeting criteria. I’d be a strong supporter of free fees in university, which I guess makes it hard for me to say why people should pay for water but not a college education – and the substantial argument for the latter also being that income tax is a fairer and better way of collecting revenue. but water is a quantity that can and should be conserved, beyond the intrinsic quality of access (which should be guaranteed in some way… the notion of disconnection sounds unpleasant to say the least). so maybe it’s halfway between a commodity and a right. in the case of any form of commodities, though, paying for it is always going to affect the less well-off proportionally more, which should be addressed through income redistribution, not commodity redistribution! e.g. how about a ‘water allowance’ for every family under a certain income – that maybe didn’t replace the whole cost (thus still encouraging some conservation, and earning some money) but would reduce the effective cost to the family?

and as for encouraging conservation, I don’t know if people are susceptible to non-economic reasons for it, especially in a time of great concentration on economic issues to the exclusion of others, including environmentalism.

thanks for replying by the way, sorry if I come across as too combative but I’m really trying to figure out where I stand on this issue, coming from a left background intellectually but turned off by a lot of the current ‘protest politics’ (not much more than I’m turned off by the neoliberal consensus of the Coalition, admittedly).

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WorldbyStorm - April 23, 2012

No, not at all re combative (I’m interested though that this thread is one of the busiest on the site). But to my mind the fundamental problem with your analysis, and why it strays outside even social democracy – and indeed I think I noted in the OP why this was a problem that social democracy failed to address at the height of its influence, is that it ignores (or in a way as in your last point admits) the central feature of these charges which is that by charging in a non-progressive (technical sense) for them it places ‘conservation’ and wastage on those with lower incomes and least capacity to pay for them while those on higher incomes will find this a minor inconvenience, if even that.

Those with most have both ability and choice, those with least have no choice (water being fundamental to life and living) and least ability to pay. Indeed its this usually unspoken assumption which seems to underpin so much of the discourse on these matters. Equity becomes collateral damage in – say – the issue of conservation.

But that’s the essential inequity that exists at the heart of this and indeed in much larger measure than it should in the rest of the society.

Short of progressive consumption taxes, the best possible way to fund these is through general taxation – that being the closest mechanism we have to progressive consumption taxes.

BTW, it’s not that I doubt the sincerity of those who from a Green perspective champion charges but it reminds me of the anecdote of a friend who was at a GP policy meeting some time back which attempted to engage with the issue of mortgages and the problems of those seeking amelioration of their situations exacerbated by the financial crisis. It took about half an hour for my friend to realise that they were the only person in the room who had first hand experience of mortgage problems, one part of those there didn’t have mortgages and were still renting, the others were in a position where the mortgages they had werne’t a financial problem in any sense. And as my friend said, that meant that policy was being discussed in almost a total vacuum. I’m not saying that as a glib ‘middle class GP’ jibe, more to suggest that there’s often a detachment from what life is like for people on lower and lower middle incomes in this society even for those who are best intentioned.

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7. dmfod - April 23, 2012

There’s just as much of a ‘community benefit’ to free access to water – people need it to avoid dying of thirst, to cook food and to maintain basic standards of hygiene. Charging for it will lead to ‘conservation’ below safe levels. Figures cited for the free water allowance would barely cover one shower or use of a dishwasher/washing machine per day, so less well-off people will literally have to cut back on personal hygiene. Others will have their water cut off, depriving them of a basic human right, including children whose parents haven’t paid their water bill.

None of this will affect the better off, so you can be sure the 10-16% ‘savings’ usually cited come disproportionately from the poor – creating yet another resource transfer to the wealthy, who can happily leave the tap on when they’re brushing their teeth or linger under a power shower. This basic inequity exists at the heart of all forms of consumption tax that are not linked to ability to pay, so that the behaviour and pockets of people on low incomes are disproportionately affected. This is bad enough for non-essentials like ‘luxury’ goods, cigarettes/alcohol or petrol (though many of these are also essential in practice), but really pernicious when it comes to a basic essential like water. This is precisely why essential goods/services like many basic foodstuffs, healthcare and education have historically not been taxed and/or have been funded through general progressive taxation.

readingthetwentiethcentury’s argument that people don’t appreciate services unless they pay for them directly is a classic right wing argument used to justify charging for all public services. Let’s abolish free health and education and toll all roads then, as otherwise people won’t demand better services.

Also to claim ‘there’s no political likelihood in the near future’ of progressive taxes being increased is a cop out that provides no justification for supporting unfair taxes instead. Representatives of the campaign on household/water charges always argue that corporation tax should be increased or wealth taxes introduced, so it’s just not true that no alternative is available or is being proposed.

I’m also not saying that conserving water to sell it to multinationals is any way the main reason for introducing charges. That’s just an added bonus of a new tax designed as yet another way of scalping ordinary people, while barely touching the wealthy who control the vast majority of the potential tax base.

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John Goodwillie - April 24, 2012

I think MarkP and dmfod have a view of ‘community benefit’ that doesn’t make sense to me. If community benefit means anything it means a benefit to the community as opposed to individuals. It is individuals that benefit from water: the only community interest I can think of is the avoidance of public health hazards, a problem that can be met by free minimums and no disconnection for non-payment.

It may well be that the minimum will be too low, we don’t know what it’s going to be. But this discussion has been about the principle of water charges, and I am certainly not going to defend the government’s implementation measures.

I continue to insist that water charges are not a consumption tax or a tax of any kind.

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Ed - April 24, 2012

“It may well be that the minimum will be too low, we don’t know what it’s going to be. But this discussion has been about the principle of water charges, and I am certainly not going to defend the government’s implementation measures.”

I’ve seen this trope in discussions of the household charge from Labour loyalists – they prefer to have an abstract discussion about whether it might ever be legitimate to have a tax of any sort on private homes and use that money to fund anything whatsoever, rather than discuss the actually existing household charge in the actually existing context and the actually existing purposes to which it will be put. Let’s stick to what’s actually happening or likely to happen and debate whether or not we should support it.

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dmfod - April 24, 2012

Communities consist of individuals, so individual benefits enjoyed by everyone equally are a community benefit.

You may ‘continue to insist that water charges are not a consumption tax or a tax of any kind’, but that’s precisely what they are in terms of how they have been implemented in other countries and how they are likely to be implemented in Ireland now. I actually thought we were discussing ‘actually existing water charges’ all along, rather than the ‘principle of water charges’ in some imaginary ideal universe, or in some other country where water is a scarce resource.

I don’t really see the point in discussing whether water charges with a reasonable free allowance and levied equitably would be a good idea in principle, as we all know that’s not what is being proposed. The main rationale in the here and now is to raise extra government revenue in a way that avoids targeting the rich and in any case there are major technical difficulties involved in calculating progressive consumption charges where the price per unit is based on income, that together with the cost of metering would probably outweigh any net benefit to the exchequer.

Can you answer a simple question? Do you support the introduction of water charges in the form they are likely to be introduced in Ireland now?

Based on available information, this will likely involve: a minimal free allowance that will not cover basic water needs; a third of households being levied with a flat charge that bears no relation to use; all charges having no relation to income and absorbing far more of the disposable income of low income groups (even if there are some limited exemptions for the very poorest); most conservation therefore deriving from the less well-off cutting back on water use, while the wealthy can keep merrily sprinkling their roses; no guarantee the money will be ringfenced for improving the water network (after all where’s the incentive to go to the expense of fixing the pipes in a time of fiscal crisis if the government can save 10% straight away from ‘conservation’); or the alternative scenario that the money will be ringfenced for fixing the network, so the government can hawk the extra ‘conserved’ water to multinationals as a further subsidy to FDI.

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dmfod - April 24, 2012

above comment is in reply to John Goodwillie

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John Goodwillie - April 24, 2012

It is not me who has entered an “imaginary ideal universe”. I was responding to an actual discussion of whether water charges were a good idea. It is only in the last few posts that present government implementation policy has entered into it.

I hardly think that whether I support things is of world-shaking importance. But my attitude for what it’s worth is No, No, Inevitable, Dubious, Irrelevant, Dubious.

But it would be illogical for me to support a campaign _against_ something which contained a basically good idea when I do not anticipate a better state of things resulting from the victory of such a campaign.

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8. dmfod - April 24, 2012

OK, so if I understand you correctly, you regard the regressive nature of water charges as ‘inevitable’, but still support them as a principled idea, and you think it’s irrelevant whether the money goes into fixing the water network, despite being so concerned with water conservation?

You also say you oppose actually existing water charges, but you wouldn’t support a campaign against them because water charges in principle are a good idea. But do you not think imposing a ‘bad’ system of water charges will delegitimise water charges in principle far more effectively than any campaign against them, so that from your perpsective you might be better off supporting a campaign against actually existing water charges, while arguing for a better model if you want, than supporting introducing them in a bad form that you yourself disagree with – or are you now saying you neither support nor oppose actually existing water charges?

Also, if you ‘do not anticipate a better state of things resulting from the victory of such a campaign’, how would the outcome be worse if the campaign won?

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John Goodwillie - April 24, 2012

The purchase of all goods and services which have a low price elasticity tends to have a regressive nature. Since water charges will not pay completely for water services, it is irrelevant whether they go towards pipes or other expenditure. A campaign against water charges delegitimises the principle of water charges and arguments about not being against water charges in principle will get lost. I support the principle, I oppose aspects of the actually existing charges. If the campaign won I do not foresee a better system of water charges being the result.

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WorldbyStorm - April 24, 2012

But it would at least open the possibility that public pressure would force a shift towards a more rather than less progressive implementation of charges, or better still (from my perspective) the removal of charges and the use of central taxation.

I think there’s an enormous political gulf between us on this issue. As I was saying to twentiethcentury above, the problem seems to be that one view has it that the lack of progressivity results in a collateral damage which is unfortunate but is of lesser importance than water being charged for. I don’t see that as a tenable position for social democrats or anyone left of that stance.

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John Goodwillie - April 24, 2012

I think the gulf is that you regard water charges as a tax and I regard them as payment for a commodity. Therefore the collateral damage is, from my point of view, comparable to the collateral damage from increases in bus fares or electricity charges and, if there is not a community interest such as reducing car traffic, should be remedied by increasing incomes.

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Mark P - April 24, 2012

That’s just the point John. Water is not a commodity. It is a public service. The water charges are about turning it into a commodity, and ultimately privatising it. Just as rubbish collection was a public service and is now a commodity controlled by private monopolies.

In both cases the effects are socially regressive, damaging to those on lower incomes, but profitable for the chosen few.

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WorldbyStorm - April 24, 2012

John, got to admit I’m very taken aback by you throwing bus fares into the mix as well.

From a red green perspective, (which is my own) all these charges are fundamentally regressive, fundamentally impact on those with lower incomes the worst, and in that sense are fundamentally inequitable. But increasing public transport costs – from that red green perspective – they do nothing to increase usage. Quite the opposite. And those who depend on buses have in many cases few alternatives – cycling is a non-starter for those who live long distances, impossible for those who have children, and so on and so forth. So those on low to low medium incomes must simply bear it.

This is simply wrong.

‘increasing incomes’ isn’t going to happen – at least not in the short to far medium term. Which means forging progressive approaches elsewhere.

very good point Mark P re commodity.

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dmfod - April 24, 2012

@john goodwillie I think the gulf derives from your insistence on the rightness/principle of charging for water – even in Ireland where it is not a scarce resource and there is therefore no environmental benefit to charging for it – and your view that this principle trumps concern for social equity or distribution. It just doesn’t make any sense to me from a left perspective to accept the regressive nature of water charges, even more so when there is no environmental benefit, and insisting on the principle in the Irish context seems more like blind adherence to a received environmental nostrum than a logical argument.

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WorldbyStorm - April 24, 2012

I feel much the same dmfod as you do here. It’s not that I doubt john’s sincerity, I just can’t divine what principle is underlies it either from a green or left perspective.

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John Goodwillie - April 24, 2012

Well, I do believe that there is an environmental benefit. Water is becoming a scarce resource, even in Ireland.

I just don’t accept the nostrum that things which are particularly fundamental to consumption should necessarily be subsidised. Subsidisation tends to distort the economy and produce inefficiency. Therefore to justify it one must look for a community benefit. Now with bus services there is a clear community benefit – traffic, lack of substitutes etc. With water supply there is a clear community benefit – public health. Which justifies the subsidy (minimum free supply) but not necessarily unlimited free supply. It is because water can be wasted that it is a commodity.

What I cannot work out from these criticisms is what fundamental left-wing approach is being appealed to, other than ‘To everyone according to their need’. And even those with the confidence that we will arrive there one day would hardly say that that is at hand.

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9. dmfod - April 25, 2012

Several fundamental left-wing approaches are being appealed to: the principle of progressive taxation and opposition to further shifting the tax base towards regressive consumption taxes; opposition to imposing more of the cost of socialising bank debt onto the population through water charges, rather than repudiating the debt or taxing the elites who caused the crisis; opposition to likely future privatisation of a public service; opposition to reducing access to a public good in order to provide a further subsidy to business by freeing up more of the water supply for corporations.

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John Goodwillie - April 25, 2012

These are not what I meant by ‘fundamental’.

I disagree that it is a tax. Talking about bank debt can be used to justify all actions against the government, not specifically this one. I think the danger of privatisation is being exaggerated, and centralisation into one unit, not charging, is the key issue. To ensure corporations invest abroad because we are consuming all the water sounds like cutting off your nose to spite your face.

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10. soubresauts - April 25, 2012

There are several very strong arguments against water charges, but here is the simplest one:

Fluoridated water is poisoned water. Why should anyone pay for poisoned water?

Twelve years ago, Eamon Gilmore was Labour’s environment spokesman and he insisted that there was a need for an independent study on the health effects of fluoridation. He stated (Irish Times, 18 May 2000):
“When fluoride was first introduced, a commitment was made by the Department of Health to undertake studies on possible health implications. However, none were ever undertaken and concerns now being expressed by members of the public should not be ignored.”

The health research hasn’t been started, let alone completed. Fluoridation is still just a reckless slow-poisoning experiment with the health of the Irish population, apart from the fact that, demonstrably, it doesn’t work.

If by some chance they get metering going (and I doubt that they will), plenty of people will refuse to pay unless fluoridation is stopped.

By the way, Fine Gael promised to stop fluoridation as soon as they got into government, citing “serious health concerns”. That promise was issued in 2001 and hasn’t been withdrawn.

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