Irish Water must stay on State balance sheet—Eurostat

LuckyLloyd

NorthStars wrote: »

Alan Kelly is taking issue with it, he was on the 6.01 earlier.

I didn't get any clear compelling rationale for disagreement with the decision from that - just broad strokes of 'we'll appeal'.

Uncle Ben

bajer101 wrote: »

Not sure if this has been posted elsewhere, but the Indo have published an article listing the 5 reasons Eurostat have given for why Irish Water needs to stay on the Govt's balance sheet.

“Considerable government control” over Irish Water, “in particular” over board appointments and operations, and the introduction of pricing caps.
· The fact that Irish Water “merely reorganises” the operation of the network from the local authorities, and that a “large majority” of Irish Water staff remain employees of city and county councils.
· The “significant and continuous funding” and support to the company in the form of operational grants and funding.
· The lack of “economically significant prices”, and in particular the cap.
· The fact that sales must cover at least 50pc of production costs. “This is further amplified by the high number of households not paying their bills,” Eurostat said."

http://www.independent.ie/irish-news/five-reasons-why-irish-water-failed-a-crucial-eu-test-
31410448.html

The 53% who haven't paid the bills have been saying all of the above for the last 3 years. Eurostat have just rubber stamped what Ogle, Boyd Barret and Murphy have been said.

Graham

NorthStars wrote: »

So, now that IW is to stay on the state balance sheet until 2020 at least, wouldn't it make more sense for the state to borrow for the necessary infrastructure upgrades at an almost zero interest rate than to allow a failed entity like IW borrow at a far higher rate?

Privatisation would remove the need to borrow any money, it would stop water being a political football and it would clarify the position that water needs to be paid for other something other than long since insufficient contributions from LA subventions.

Uncle Ben

Graham wrote: »

Privatisation would remove the need to borrow any money, it would stop water being a political football and it would clarify the position that water needs to be paid for other something other than long since insufficient contributions from LA subventions.

But IW isn't going to be privatised according to FG/LP!

Graham

Uncle Ben wrote: »

But IW isn't going to be privatised according to FG/LP!

In light of recently changed circumstances they will hopefully reconsider.

SpaceTime

Graham wrote: »

In light of recently changed circumstances they will hopefully reconsider.

Privatisation was obviously the intention of whoever lobbied for this in the first place.

It'd be highly unusual when a country finds itself in the position Ireland did back in 2008/9 that someone wouldn't attempt a good old-fashioned asset stripping.

We got away relatively lightly, given the circumstances.

NorthStars

Graham wrote: »

Privatisation would remove the need to borrow any money, it would stop water being a political football and it would clarify the position that water needs to be paid for other something other than long since insufficient contributions from LA subventions.

Are you seriously suggesting we sell off the complete water infrastructure in the country?
How much a year do you think you'll be paying for your water provision in that case?

Seth Brundle

NorthStars wrote: »

Why do you think we need metering at all?
It's not like there's a shortage of water coming from the sky over Ireland, is it?

The problem is the leakage and ageing infrastructure and no amount of meters will solve that, although they might line the pockets of certain people in the short and long term.

The infrastructure needs investment and if we need to borrow for that the best way is through the NTMA who can borrow at a far cheaper rate than IW ever will be able to.

It's totally arse about face, as is the norm in this country.

Metering is a fair way of charging for water rather than paying a flat rate.
As for there not being a shortage of water coming from the sky, are you prepared to drink rain water?

You also mention leakage being the problem. how do you suggest we fund the repairs without a charging structure? The taxpayer? But sure we're already borrowing way beyond our means. One step to reduce this level of borrowing has been rejected by the no campaigners who wish to increase our tax burden.

As for the NTMA borrowing for water repairs, then this increases the national debt which in turn increases the cost to borrow.

Jawgap

Uncle Ben wrote: »

But IW isn't going to be privatised according to FG/LP!

Perhaps one implication of today's decision is that IW or it's successor body will have to be placed on a more commercial footing - something akin to BGE after it was created.

Once that happens there is potential for privatisation - that's probably not going to happen for a decade, imo. After that who knows? Maybe if the island was organised as a single 'water market' one of the international utility companies might take an interest.

Graham

NorthStars wrote: »

Are you seriously suggesting we sell off the complete water infrastructure in the country?

I think I answered that quite clearly in my earlier post. Yes.

NorthStars wrote: »

How much a year do you think you'll be paying for your water provision in that case?

Not much more than we should have been paying for years.

Given the previous methods of funding the water supply have proved to be dramatically insufficient:

How are you proposing to fund Irish Water?
How would you propose to fund the massive investment required to secure our future water supply without saddling the country with more debt?
How are you proposing to apportion all of those costs fairly amongst the majority of the population that benefit from the water supply?

QuinDixie

IW from the start has been very badly handled. There should have been a 200 euro levy placed on each house, no meters, no credits.
And than over a 10 year period, the levy could have increased modestly. running parallel with this would be meter installations and fixing the network and People than would have plenty of time to fix their leaks.
In time homeowners could choose the fixed levy or the meter.

But no, fools rush in and politics is full of them

Graham

QuinDixie wrote: »

IW from the start has been very badly handled. There should have been a 200 euro levy placed on each house, no meters, no credits.
And than over a 10 year period, the levy could have increased modestly. running parallel with this would be meter installations and fixing the network and People than would have plenty of time to fix their leaks.
In time homeowners could choose the fixed levy or the meter.

That sounds like it would have been a much more sensible approach.

This is where I'd disagree:

QuinDixie wrote: »

But no, fools rush in and politics is full of them

Far from rushing in, successive governments kicked the can down the road hoping it would be down to someone else to fix.

NorthStars

Graham wrote: »

Far from rushing in, successive governments kicked the can down the road hoping it would be down to someone else to fix.

And this government have well and truly fixed it, haven't they?

A national authority, that will co-ordinate water provision throughout this country will be set up and funded by central taxation and the LGF.
IW is an abject failure, has been from the start.
It seems to take a long time for that fact to sink in for a lot of people, maybe that's from being stubborn, maybe it's pride or maybe it's just pure delusion.
But if anyone thinks IW as it stands, will be around forever, they're wrong.
People, form here and from Eurostat have passed their judgement.

QuinDixie

Graham wrote: »

That sounds like it would have been a much more sensible approach.

This is where I'd disagree:



Far from rushing in, successive governments kicked the can down the road hoping it would be down to someone else to fix.

I am not a fan of the water tax, and I do not support any party.

But FG/LAB have made an absolute hash of it, they did NOT choose to implement it, but they chose HOW to implement it. This 100 Euro credit, wtf is that. Whose idea was that.

NorthStars

QuinDixie wrote: »

I am not a fan of the water tax, and I do not support any party.

But FG/LAB have made an absolute hash of it, they did NOT choose to implement it, but they chose HOW to implement it. This 100 Euro credit, wtf is that. Whose idea was that.

The €100 'credit' was nothing short of a bribe being used to get IW to pass the MCT.
That failed too.

Sand

Its bizarre to me that the government can be perceived by some to do such a good job on the grand scale of things, yet be so incompetent in essentially everything it touches. This Eurostat ruling shouldn't have been a surprise to anyone. If I recall correctly, the Irish government tried a similar wheeze in the setup of NAMA, trying to pretend it was a private SPV to hide the spending off balance sheet. They were furious when that was ruled out, and Ireland had to record I think the greatest peacetime deficit in the Eurozone's history.

With Irish Water being now considered essentially a government entity, there is really no benefit to continue with the pantomime. They might as well simply abandon the charges and just increase (or maintain) income taxes to pay for it instead. With all the grants and exemptions for low earners, families and pensions, the water charge is just a difficult and costly to collect, politically poisonous income tax anyway.

Privatising the water infrastructure in the country would be a ludicrously bad idea. Let the private sector develop their own infrastructure if there is profit in it - they wont because there isn't, and they certainly wont develop any infrastructure sold to them. They will simply seek to exploit the monopoly handed to them.

Seth Brundle

NorthStars wrote: »

IW is an abject failure, has been from the start.

I would disagree as it was never given a realistic chance to get going.
The cock up has come as a result of political incompetence and political point scoring.
The government allowed political opponents to dictate the direction of the utility. The government allowed people opposed to paying to dictate the direction of the utility.

QuinDixie wrote: »

I am not a fan of the water tax, and I do not support any party.

...and this kind of crap hasn't helped!

micosoft

Jawgap wrote: »

Perhaps one implication of today's decision is that IW or it's successor body will have to be placed on a more commercial footing - something akin to BGE after it was created.

Once that happens there is potential for privatisation - that's probably not going to happen for a decade, imo. After that who knows? Maybe if the island was organised as a single 'water market' one of the international utility companies might take an interest.

I don't understand this debate on privatization. We have the opportunity to privatize much better assets - the Power Grid and the Gas Grid. Both of whom have well worked out operating models and revenue streams. Yet not a peep about privatising either. On the other hand those against having a functioning Water System are imaging the Government is going to sell at the first opportunity the current neglected and underfunded water grid. Of course that would presume that their position was honest in the first place.

For the record I don't have a problem with privatising the supply of water of water but think the Grid should be state owned. As it is for both Electricity and Gas in this country.

Graham

QuinDixie wrote: »

I am not a fan of the water tax, and I do not support any party.

It's a water charge.

QuinDixie wrote: »

But FG/LAB have made an absolute hash of it, they did NOT choose to implement it, but they chose HOW to implement it.

What commitments had been made around the introduction of water metering and the implementation of the 'polluter pays' policies?

QuinDixie wrote: »

This 100 Euro credit, wtf is that. Whose idea was that.

Agreed, bad idea. They should have stuck to the original plan.

SpaceTime

You could have multiple competing water suppliers in theory but, I can't see private companies opting to build their own reservoirs and there's no "national grid" nor is there ever likely to be one.

So it would inevitably be a monopoly.

QuinDixie

micosoft wrote: »

I don't understand this debate on privatization. We have the opportunity to privatize much better assets - the Power Grid and the Gas Grid. Both of whom have well worked out operating models and revenue streams. Yet not a peep about privatising either. On the other hand those against having a functioning Water System are imaging the Government is going to sell at the first opportunity the current neglected and underfunded water grid. Of course that would presume that their position was honest in the first place.

For the record I don't have a problem with privatising the supply of water of water but think the Grid should be state owned. As it is for both Electricity and Gas in this country.

They would have to pay someone to take the grid off them, no one wants a grid that will cost billions to upgrade and maintain.

micosoft

Sand wrote: »

Its bizarre to me that the government can be perceived by some to do such a good job on the grand scale of things, yet be so incompetent in essentially everything it touches. This Eurostat ruling shouldn't have been a surprise to anyone. If I recall correctly, the Irish government tried a similar wheeze in the setup of NAMA, trying to pretend it was a private SPV to hide the spending off balance sheet. They were furious when that was ruled out, and Ireland had to record I think the greatest peacetime deficit in the Eurozone's history.

The deficit was a result of the Irish Electorates voting in of FF three times in a row to award themselves massive amounts of handouts. Not sure how the current government is responsible for a deficit they inherited.
As for the rest, they got the promissory note which has enormously benefited the taxpayer. You win some and you lose some when your back is against the wall which some people seem to be forgetting we were.

Sand wrote: »

With Irish Water being now considered essentially a government entity, there is really no benefit to continue with the pantomime. They might as well simply abandon the charges and just increase (or maintain) income taxes to pay for it instead. With all the grants and exemptions for low earners, families and pensions, the water charge is just a difficult and costly to collect, politically poisonous income tax anyway.

Or alternatively the simpler thing to do is increase Water Charges. Probably after the election.

Sand wrote: »

Privatising the water infrastructure in the country would be a ludicrously bad idea. Let the private sector develop their own infrastructure if there is profit in it - they wont because there isn't, and they certainly wont develop any infrastructure sold to them. They will simply seek to exploit the monopoly handed to them.

If the state ever had any intention of privitising any network they would have privatized the Gas or Electricity network. They are worth something. The water network is worthless at this time. This is an utterly bogus argument with not basis in evidence of fact and quite frankly tedious at this time.

micosoft

QuinDixie wrote: »

They would have to pay someone to take the grid off them, no one wants a grid that will cost billions to upgrade and maintain.

And has no revenue serious stream.....

It's a bogus argument that's easy to refute yet gets recycled every 100 pages or so here.

QuinDixie

Graham wrote: »

It's a water charge.


What commitments had been made around the introduction of water metering and the implementation of the 'polluter pays' policies?



Agreed, bad idea. They should have stuck to the original plan.

it is a tax, in much the same way as toll charges are a tax.

the gov chose the route IW has took and Lab in particular know this affair could see them destroyed in the next election. alan kelly looks especially worried.

micosoft

SpaceTime wrote: »

You could have multiple competing water suppliers in theory but, I can't see private companies opting to build their own reservoirs and there's no "national grid" nor is there ever likely to be one.

So it would inevitably be a monopoly.

Most likely it would be the supply element (billing, customer service) and private water treatment plants for towns/lands. It will allow for people to consolidate all their bills from one supplier e.g. Electric Ireland for your Gas, Electricity and Water.
The model is already there with Gas Networks Ireland. One Grid. Four supplies (Kinsale, Corrib Gas interconnectors over Irish Sea, Northern Ireland Connector). Yet all the other providers - airtricity, Electric Ireland, Bord Gais, Energia, Flogas, can all sell gas.

So it's been actually been done. The privitisation angle is bogus.

Sand

micosoft wrote: »

The deficit was a result of the Irish Electorates voting in of FF three times in a row to award themselves massive amounts of handouts.

They should have voted in FG then, who were offering more handouts.

Not sure how the current government is responsible for a deficit they inherited.

I didn't actually blame them for anyone else's failing. Just their own errors.

As for the rest, they got the promissory note which has enormously benefited the taxpayer. You win some and you lose some when your back is against the wall which some people seem to be forgetting we were.

They didn't "get" the promissory notes. It wasn't given to them. There wasn't any deal.

Or alternatively the simpler thing to do is increase Water Charges. Probably after the election.

No, the simplest thing to do is to abandon the whole well intended, but completely hopelessly executed Irish Water deal and just increase or maintain income taxes and ring fence spending for infrastructure. Only stubbornness and pride will lead them to try to keep water charges given how politically toxic and utterly pointless they are.

If the state ever had any intention of privitising any network they would have privatized the Gas or Electricity network. They are worth something. The water network is worthless at this time. This is an utterly bogus argument with not basis in evidence of fact and quite frankly tedious at this time.

Yep, so there is one less argument for maintaining Irish Water as an arms length entity. Its not going to be privatised, so what's the point?

Graham

NorthStars wrote: »

A national authority, that will co-ordinate water provision throughout this country will be set up and funded by central taxation and the LGF.

Move the burden entirely onto the taxpayers, increase national debt substantially and offer no incentive to conserve water or moderate consumption.

Are you borrowing fiscal policy from the last millennium? Wasn't most of that approach tried already resulting in the vast underinvestment in the water supply?

Your earlier posts suggest that spreading the costs of water proportionately across the entire Irish Water consumer base was unacceptable yet you think it's a better idea to spread those same costs across a smaller cross-section of the population.

Seth Brundle

QuinDixie wrote: »

it is a tax, in much the same way as toll charges are a tax.

Tolled roads can be avoided - drivers choose to use those roads for the convenience.
Water charges are not mandatory. People can choose to bore and maintain a well, buy water from a shop or even as someone earlier mentioned, use rainwater (which is free).
Taxes are mandatory. Water charges are not mandatory if you don't use the service. If you do, then you should pay for them.

Seth Brundle

Sand wrote: »

They should have voted in FG then, who were offering more handouts.

...or SF who were offering even more than that (and still are)!

Sand wrote: »

No, the simplest thing to do is to abandon the whole well intended, but completely hopelessly executed Irish Water deal and just increase or maintain income taxes and ring fence spending for infrastructure. Only stubbornness and pride will lead them to try to keep water charges given how politically toxic and utterly pointless they are.

By introducing higher taxes, then I pay more for water than I do now and I also will pay more that many other people. How is this fair?

QuinDixie

kbannon wrote: »

Tolled roads can be avoided - drivers choose to use those roads for the convenience.
Water charges are not mandatory. People can choose to bore and maintain a well, buy water from a shop or even as someone earlier mentioned, use rainwater (which is free).
Taxes are mandatory. Water charges are not mandatory if you don't use the service. If you do, then you should pay for them.

VRT, Stamp Duty, CGT, Corporation tax are mandatory in certain situations but can be avoided, but there still taxes.
water tax for me is similar to VAT, practically unavoidable.