8th April, 2009

Mark Felton,
President
Greystones Chamber of Commerce.

Dear Mark,

Ratepayers to subsidise Government Deficit

The Government has instructed Local Authorities to hand back all the pension levy to the Government. This will increase rates next year. In my view the savings, in proportion to the amount of wages paid by rates, should be kept by the Council and rates reduced next year. In Wicklow’s case 40% of wages are paid by rates and this would result in about a 5% reduction in rates next year. Instead the Minister is taking this.

Chambers Ireland should lobby on this as it is very anti business. I attach a note about it:

The Minister for Environment and Local Government, John Gormley (Green Party) has instructed Local Councils to give the entire saving on the staff pension levy back to his Department even though the Council funds and pays its staff pensions. This is robbery as staff wages are partly paid from Business Rates and Water Charges as well as the Government Grant. The savings from the wages sacrifice of the staff and Councillors should go to reduce Rates on hard-pressed businesses. This emerged at Mondays meeting of Wicklow County Council when I asked the Manager for information about what happened the saving.

The Minister is going to increase rates when Council’s want to reduce them as this effectively transfers a portion of Rates income to Central government.

In Wicklow the pension levy will raise about €4M a year and would have allowed a 25% rates reduction if the Minister had not grabbed the cash. Commercial Rates fund about 40% of Wicklow County Councils wages bill and the savings even on that part are to be paid back to Central Government. We must reduce business charges in this competitive era and I am disgusted that this move could lead to a rates increase next year. The Minister claims that he is friendly to business while taking this money back from the Council Budget and thus ratepayers.

Yours sincerely

Derek Mitchell