THE GOVERNMENT HAS finally agreed on water charges, which will see the mythical standard household of 2.7 people paying €240 per year for their water. We will all get a standard free allowance of 30,000 litres per year, and another 38,000 litres for each child in a house.
The Minister for Health has been given the job of drawing up a list of conditions that will entitle someone to further free water.
Paying any new tax or charge to the government is a galling experience. Many people could remove the word ‘new’ from that sentence and say the same. The water tax is arriving at a time when the government has gone through years of raising charges and taxes for other things whilst cutting services.
A good idea
But at its core, the water charge is a good thing; and while it is less than ideally configured today, it is the basis from which future governments can build a fairer and better way for us to pay for water.
Fundamentally, treated water needs to be paid for. There are massive facilities built to capture and filter water, and there is a massive infrastructure to get it from reservoirs to taps. That infrastructure is, we know, creaky and leaky; but for most of the country most of the time it delivers safe, clean, reliable water. Places with boil notices or water shortages are the exception.
One of the biggest deficiencies of the new water charge is that it is an additional rather than a replacement tax. Currently water is paid for out of the big pot of general taxation that comes from everyone’s income and VAT and other sources, and that goes to pay for everything from water to roads to Oireachtas envelopes.
Spending
The standard household with two average industrial incomes already pays out about €170 that gets allocated to water services. They are, clearly, not getting a rebate on that with the new charges. This is because, frankly, the state is broke and can’t afford it.
It could cut spending elsewhere to pay for water, but government spending overall has remained up near 2007 highs all through the recession.
It’s bad at actually cutting overall spending.
In the future however, cuts to income taxes for example could be easier if that tax is not used to pay for something like water. Your income, or how much vehicle registration tax or VAT on buying a new TV or whatever else you pay, has no bearing on how much water you use. Like electricity, we should pay for what we use rather than have it lumped in on top of every other tax we pay.
Leaky pipes
This has the added benefit of helping to keep government more honest. To date we have had leaky pipes that spill a massive proportion of all the water we treat into the ground. And to date, to be honest, nobody has really given a crap about it unless a cold snap caused water shortages or similar.
This problem isn’t new. There are pipes in our cities that were put down when we were still ruled by an English monarch. But nothing has been done. All of a sudden, we have voters on doorsteps asking what will be done about leaky pipes. Action will follow.
Treating water is an expensive business, and it has an environmental impact in that it uses up energy and so produces CO2 emissions. The more water we use, the more we need to consider doing things like tapping the Shannon to feed Dublin.
The more we pay for water, perhaps the more we’ll think about how we use it. Businesses, which already pay water rates, understand this. McDonald’s tout their green credentials in, for example, using efficient urinals in their bathrooms. Actually what they’re doing is reducing their water bill.
Water usage
Flushing a toilet uses about 8 litres of water. People might consider, for example, using untreated rainwater to fill their cisterns for free. Why do we need water specifically treated to be fit for human consumption for that?
Yes, the water charges are coming at a bad time for us all. But in reality, we’d probably complain about them even had they been introduced when we had full employment and everything was rosy. Now is probably the only time a government could get away with introducing them, under the auspices of the Troika.
It will be up to future governments now to pass on reductions in general taxation that used to pay for water. It will be up to each of us to now treat water as a utility like electricity or broadband or anything else, and demand that inefficiency and waste be gotten rid of in order to keep our bills down.
Aaron McKenna is a businessman and a columnist for TheJournal.ie. He is also involved in activism in his local area. You can find out more about him at aaronmckenna.com or follow him on Twitter @aaronmckenna. To read more columns by Aaron click here.
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