Ireland in too deep over water charges

Last week here saw the publication of the Report of the Expert Commission on Domestic Water Services, supposedly the first step in trying to bring some sanity into the debate on how water services in Ireland will be funded in the future.

Ever since the abolition of domestic rates in the 1970s domestic water has been completely free in Ireland, but that can no longer continue and the whole question of how it is to be paid for has been the hottest political potato here in the last few years.

You will remember the mass anti-water charges protest marches that bedeviled the last government and no doubt were part of the reason why Fine Gael barely made it back into power leading a minority administration. Water has become such an explosive issue here that our politicians don't want to touch it.

Ireland, as a result, has become a bit of a joke among EU countries because of its failure to convince people here that they have to pay for water. Something that is normal in every other country in Europe -- and most developed countries around the world -- is seen by too many people here as unacceptable.

Everyone knows that we desperately need investment in our water infrastructure, both for the provision of fresh water and the management of waste water. We lose over 40 percent of the clean water we produce through leaking pipes, many of which date back to Victorian times. Raw or partially treated sewage is still being released into our rivers and the sea near our coastal towns.

The situation is a national disgrace -- yet attempts to get people here to pay for water services have turned into a nightmare. This is largely because Irish politicians on all sides have made such a mess of it. The loony left, Sinn Fein and even Fianna Fail have all exploited the issue for their own reasons.

Proof that @fiannafailparty promised to get rid of Irish Water. @OCallaghanJim @SaturdayRTE pic.twitter.com/HEsv0iuh5H
— Gemma O'Doherty (@gemmaod1) December 3, 2016

The behavior of Fianna Fail has been particularly nauseating. Even though they were the party which accepted the principle of water charges when they were last in government, they have now flip flopped several times in a cynical attempt to win favor with voters.

It's not like we have a choice. Apart from the fact that water services in Ireland are a shambles and urgently need billions in investment, we are out of line with EU rules which say consumers must be charged for water.

This EU policy is there both to stop people wasting fresh water supplies and to impose acceptable standards for sewage and waste water treatment across Europe. We either comply with this or face massive fines.

Added to this was pressure from the trioka, when they were here after the bailout. They also wanted water charges introduced because they recognized that if the state had to borrow the estimated €13 billion needed to update our water infrastructure it would make it far more difficult to get our finances back in balance.

The then minister for the environment in the last Fine Gael-Labour government, Phil Hogan, set the ball rolling in 2014 by setting up a new utility called Irish Water which would meter every home in the country, start charging for water, and start fixing the system. It sounded good but it was a disaster from the very beginning, not least because the new utility immediately started spending vast sums of money on swanky offices, high salaries, consultants, a massive call center and on putting in the meters outside homes before it even began the real job of fixing the leaking pipes all over the country.

The public were so disgusted by this that many normally law abiding citizens decided that they were not going to pay, and the whole issue spiraled out of control. As the pressure mounted, the last government basically caved in, cut water charges to a minimum and even gave a grant of free cash to try to get people to accept the new system.

It was joke. Many people took the money and still refused to pay their water charges. The government said no one would be cut off, removing any compulsion to pay.

Faced with this mess, the present minority government has been too weak to carry through what needs to be done. So they kicked the watering can down the road by doing the usual dodge, waiting for a report by a "commission of experts."

That commission's report, published last week, will go to a special all-party committee of the Irish Parliament who will consider it and then make recommendations to the government, who may (or may not) act on them. So a lot of infighting and delay still lies ahead. It's all as clear as muddy water.

One thing is clear, however. The commission's report, despite supposedly being scientific and objective, implicitly accepts the current political reality that imposing water charges is now impossible because Fianna Fail will not support them and too many people refuse to accept them.

Time for Fine Gael to refund those coerced into paying into #Irishwater fiasco #not1pipe pic.twitter.com/DIyVeYDbuG

— Mick Caul (@caulmick) December 3, 2016

So it has come up with a compromise. A normal level of water use will be free but excess water use will be billed. The report does not decide what a normal or excess level is, saying that this is a matter for the politicians to decide.

This, of course, is a cop out. But there seems to be a general acceptance that "normal" use means that unless you are washing your car and spraying the lawn every day and running taps in the house for hours on end you won't be paying any charges. Instead, the report says, the cost of providing water services to the vast majority who won't have to pay anything should be funded out of general taxation.

There are a couple of issues with this. It all depends on where the bar will be set for excess use.

If it's very high and very few households have to pay, then it's hard to see how this will comply with EU rules on water conservation. It will also mean that all the money that has been spent on meters so far will largely be, er, like water down the drain. Their only function will be to confirm that there has been no excess use and there are cheaper ways of doing that.

The waste involved is colossal. Nearly 900,000 of the 1.4 million homes in the country had meters installed by the time the program was halted last year at a cost of over €500 million. The remaining half a million homes will cost at least €300 million to meter, if it is decided that it is still worth completing the work, which is doubtful.

Meanwhile, very little is being spent on improving the national water infrastructure. Just two weeks ago we had another annual environmental report which identified over 30 locations around the coast where sewage is being released into the sea near towns and cities. It's medieval stuff and it's a disgrace.

There are other complications as well. Around half the population have paid their water charges to date. Should they be getting their money back if the other half are allowed to get away with not paying? Or should the non-payers be pursued through the courts, even though this is likely to be ineffective because they can't all be jailed? Even members of the government are divided on this and don't seem to know what to do.

Then there are the three-quarter of a million people who live in rural areas and either drill their own wells or pay to be part of a small local water scheme. They have been paying for their water for years, usually far more than the now suspended water bills were for the rest of the population.

Now, if water is to be funded almost entirely through taxation, they will be paying not only for their own water but for everyone else's water as well, which is clearly unfair.

We go again, we march. #Right2Water #Abolish #IrishWater #watercharges #FlipFlopFF #rtept #vinb pic.twitter.com/PqeYEEECAi
— Pillar_Citizen (@Pillar_Citizen) November 29, 2016

There is another difficulty also. The original reason for keeping the €13 billion cost of fixing our water infrastructure off the books of the state was to allow us more quickly to get the country's finances under control again. Irish Water was going to borrow the money in the market and pay for it through ongoing water charges on homes and businesses.

But this model now goes out the window if the money is to be raised through taxation (the commission does not say what kind of tax).

Unless we raise taxes significantly, we will have to cut spending in other areas -- like hospitals, or schools? Or else the state will have to borrow even more, failing to meet the agreed timescale under the bailout program for getting the state finances back in balance.

All of this farce exposes just how poor politics is in this country and the absolute lack of any real leadership. The right thing would have been to keep water charges but turn them into a tax and give the Revenue Commissioners (with all their power) the job of collecting it.

It could have been amalgamated with the local property tax which Revenue is already collecting. This would mean that it all goes on to the state's books but at this stage that seems inevitable anyway.

And rather than wasting all the money spent on meters, we should be using them and relating the tax progressively to the amount of water used.

Selling that to all those who have swallowed the leftie/Sinn Fein line about water being a human right that must be free -- when the reality is it costs money to produce -- would not be easy. It would, as we said, take real leadership. Sadly that is in short supply here right now.