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Denial… is all about water (charges). April 25, 2012

Posted by WorldbyStorm in Economy, Irish Politics, The Left.
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There’s a fascinating piece in the Sunday Business Post by Niamh Connolly which lays bare the thinking about water charges by some in the Labour Party, and it perhaps illustrates a gulf between their conception of reality and actual reality. Connolly notes that:

Labour TDs have reacted angrily to the handling of the water charges issue last week and will call on minister Pat Rabbitte to ensure that those unable to pay will not have their water turned off.
Labour deputies privately believe that Minister for the Environment Phil Hogan should have worked out a better strategy for communicating information about the new water charges regime.

But this seems to me to be an error on their part. It’s a shoot the messenger approach writ large. Of course Hogan misplayed this, but it’s not the misplaying that drives public antagonism to the charges as much as the charges themselves.
Note how one LP TD is quoted:

“Instead, the country went into convulsions at reports of a Ђ300 upfront charge that was in reality a Ђ40 charge for a meter that would not be paid for until late 2014,” said Whelan.

But it’s not just €40. Even if one uses the word ‘just’ in that context. Given that the same paper notes in the same edition that one calculation of water charges sees them at €500 per annum, and this is added to property charges that will equal or surpass that according to other sober calculations then this isn’t just miscommunication but a much deeper dynamic.

No wonder as Connolly notes: The problem is that the campaign on the EU treaty on the doorsteps could now become fixated on the household charge, property tax and water charges.

As Emma Kennedy in the same newspaper notes:

Irish families look set to face even more financial pressure in the coming years, with a property tax and water charges on the horizon. Anger is mounting, with protesters saying that the charges are unfair and an undue burden on those who are already struggling.

And…

A report published by the ESRI last week suggested that the impact of a property tax on low-income groups could be cushioned by the use of an income exemption limit, below which the tax would not be payable. According to figures cited in the report, a property tax based on homeowners paying €2.50 for every €1,000 of house value would raise about Ђ500 million for the state’s coffers.
Another paper published by the same ESRI researchers two years ago calculated that, to raise Ђ1 billion for the exchequer each year, the average household would pay about Ђ950 per annum in property tax.

In other words these are significant figures being bandied about. And the flat component of water charging understandably exercises ire. Cliff Taylor itemises the total as;

… going to approach €1,000 a year and for a significant minority it will be a good deal higher.

But there’s more.

Labour has claimed political credit for its creation of a semi-state public utility rather than a standalone quango that could be privatised – a model that was favoured by some in Hogan’s department.

“We are looking at the next generation of semi-state jobs and Labour is of the view that this is a huge result. We’ve prevented Irish Water from being privatised even though elements wanted it to go in that direction,” Whelan said.

Except, except as the SBP also noted in this most recent edition and the previous one…

Meanwhile, the Department of Environment has contradicted comments made by the Taoiseach, Enda Kenny, who last week denied reports that the establishment of Irish Water could lead to job losses. The department has confirmed that “it may be that, in time, the numbers employed in the sector will be lower than those employed today.”

And:

More than 3,600 local authority staff went to work in the country’s 34 city and county councils last Wednesday with new uncertainty looming over their employment.
The hundreds of engineers, hydrologists, administration staff, caretakers and general operatives working to deliver water to Ireland’s domestic and commercial water consumers cannot be certain that their jobs will remain beyond the next five years.

Is that a good news story? How is that ‘played’ for maximum benefit?

In tandem with the poll in the Irish Times that sees a clear majority, near enough 3 in 4 of respondents, in favour of income taxes over consumption charges one would think that social democrats might shift away from the current position they’ve adopted. One would think.

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1. Denial… is all about water (charges). | The Cedar Lounge Revolution | critical media review - April 25, 2012

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2. FDR - April 25, 2012

Since I presume you do in fact prefer Irish Water being constituted as a semi-state Frankenbody vs. a private entity, it’s amusing that you nonetheless feel ideologically obligated to bemoan the vague possibility that some speculative future doubt may hang over the cosseted heads of these 3600 waterboys. You see 3600 endangered souls, I see e180M per annum (at a highly conservative 50k/skull) out of an annual e1.2B budget to exploit a scarce resource which we then give away free at point of use.

Related, how do you feel about Richard Tol’s observation over on TIE that in the absence of new equity being issued, the creation of IW will involve in part an uncompensated transfer of our state assets to the employees who are part-owners of Bord Gais? I take it you’re OK with those folks paying CGT on the value at the appropriate time?

And I would respectfully suggest that the 2/3 support for income taxes vs. consumption taxes likely reflects a belief that those income taxes would fall on ‘someone else’ (for which read: ‘the rich’). That is, the underlying objection is to paying more tax in any form rather than a principled or reasoned stance on relative tax strategies. Or do you really think that the average punter in Ireland is happy to pay more tax but would prefer to pay it as income tax vs. consumption tax?

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Ed - April 25, 2012

“You see 3600 endangered souls, I see e180M per annum (at a highly conservative 50k/skull) out of an annual e1.2B budget to exploit a scarce resource which we then give away free at point of use.”

An eloquent summary of your thinking – he sees people, you see money. No wonder you can’t even conceive the possibility that people might be motivated by anything other than the obsessive need to minimise their own contribution to society at all costs, regardless of what impact it has.

The claims about it being a “scarce resource” have been addressed very well on another water charges thread, by the way. Sindo rhetoric, nothing more.

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readingthetwentiethcentury - April 25, 2012

It’s hardly ‘Sindo rhetoric’ to point out that water costs a lot of money to collect, produce and distribute. And all resources are scarce to some degree – admittedly on a day like today that really doesn’t seem to apply to water in Ireland. But even though we have an abundant potential supply, it’s said that we only just about store and treat enough to meet demand, in Dublin especially.

As for the obvious response, the leaks… very interesting to read this article in the IT: http://www.irishtimes.com/newspaper/ireland/2012/0424/1224315103843.html
the accompanying table (not sure if it’s online) showed a wide regional disparity in wasted water – ironically with Donegal having the highest and Dun Laoghaire the lowest, just like the Household Charge non-payment rates, though I don’t know whether that’s due to greater local investment or civic responsibility – but it’s also pointed out that a large proportion of the loss comes from individual properties: something owners have no incentive to rectify unless there are charges.

now, obviously repairs (whether on an individual basis or indeed to the system itself) are a financial burden, and we can discuss the best ways of sharing that, or at least subsidising it for people on lower incomes, but the idea that it’s all going to come out of income tax seems like denial in itself. surely without a mechanism for excessive water usage (i.e. including wastage) costing people something directly, and not just an unseen burden on the exchequer, nothing will be done?

incidentally, wbs, I’m still not convinced by that survey showing people “in favour of income taxes over consumption charges”, because that wasn’t really the question asked.

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WorldbyStorm - April 25, 2012

FDR, you’re yet another person who ascribes to me beliefs and thoughts that you could not possibly determine from what I actually write.

I’d be happy enough with the status quo in terms of employment through local authorities etc, so neither Washington or Moscow in terms of you two alternatives but… er… Dublin, I guess.

I’m not ‘ideologically obligated’… I’m referencing articles in the Sunday Business Post, a paper not widely known for its leftist stance on matters but one which for my sins is the only one I purchase each week.

Scarce resource? What Ed said.

Re Tol, my first answer above indicates my view of matters. BTW, I’m not agin a state water company and nor am I agin CGT having paid it myself.

Interesting that you seek to read into the motivations of those who answered the question. I tend to take it at face value. Certainly I doubt there’d be a campaign like the CAHWT against income tax rises as long as they were progressively applied. But I don’t know. And neither do you. What does seem reasonable to posit is that given income taxes are applied progressively (technical sense) that would suggest there would be a more equitable approach and this many would find more palatable (and after all the right of centre throughout this crisis has argued that if only people had stuff explained to them they’d stand the burden… well, here people have had it explained to them ad nauseum what the charges imply and half of those eligible have resiled and now we get polling data like this).

Reading the twentieth…

I’m not sure what relationship does usage have to repairs/leaks?

Repairs are a financial burden, but what principle is at work that it should come out of individual householders finances and why should it be the responsibility of householders in the first place?

I have no idea what leakage if any there is in my house, none I hope because the plumbing was upgraded two years ago, but before that I had no idea either. Again, none I hope. Certainly nothing that caused a problem such as damp etc. But where leaks occur inside aren’t they already the responsibility of the householder? Beyond that I always have assumed they’re DCC or whoever’s fault. And that being the case what’s it got to do with the individual householder. Are you confusing excessive usage with leaks (or are there just people who don’t get leaks fixed which seems odd if habitability is the issue)?

Voters were asked if they agreed with the Government’s strategy of opting for measures like the household charge this year and a property tax in the future as an alternative to income-tax increases.
I read that as being income tax increases (note the word increases in the original) favoured over charges in relation to this issue.

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readingthetwentiethcentury - April 26, 2012

I meant leaks in gardens or elsewhere within the property boundaries, not necessarily within the house but after the point where the supply would be metered. I guess it just disappears into the ground without anybody noticing, except if you saw that the water usage was abnormally high. I’m not concerned too much with whose responsibility or fault it is, or who pays for it, but I’m saying without metering (and charging) it won’t be noticed and acted upon. Leaks are essentially a form of excessive usage, and it’s in the interest of everybody that there’s some incentive for end users to note the amount of water they’re consuming. And again, if people have to pay for water then there’s more pressure and resources to repair the main pipes, which in the end should reduce the cost of supplying water – you don’t have to worry about it being a scarce resource to want it to be less expensive overall.

I’m happy to note the term increase, but I still feel like it’s too easy to read the question and focus on rejecting charges rather than actually assenting to increased income tax. Other than that FG were voted in on the platform of no income tax increases, the government can’t point to an explicit support for charges over income tax, ok – but if the debate were effectively to shift to such an increase, I wouldn’t be surprised if that figure melted away. Plus, if it’s the people with the least income who oppose the charges to the greatest degree, it’s the people with more income that the tax increases would effectively fall on instead… it’s not quite the same constituency.

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