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A Right2Water protest in Dublin in August 2015.
water mess

Doomed water charges policy had 'treacherous basis'

A report on the issue will be launched today at a conference called How (Not) To Do Public Policy.

THERE WAS A “serious disconnect” between the policy design and implementation of introducing water charges, according to a new report.

The document, compiled by researchers at the Whitaker Institute at NUI Galway, will be launched this morning at a conference called How (Not) To Do Public Policy.

The report examines the failure of water charges as well as the successful implementation of the Local Property Tax.

The report notes: “The overarching goal of the water sector reform programme was to establish a water utility that could independently borrow to finance a heavy programme of investment in water infrastructure.

“For this to happen, the water utility had to be classified outside the general government sector by passing the so-called ‘Eurostat test’. This was a treacherous basis for policy.”

It also states that policy choices such as the universal free allowance and universal metering were made “before their implications were properly understood and without the alternatives being rigorously assessed”.

The Local Property Tax was successfully introduced because its design was infused with a keen awareness of the importance of anticipating implementation challenges. In this regard, a key moment was the decision to give responsibility for collection and administration to the Revenue Commissioners.

There was a high level of non-compliance and several large-scale protests in relation to water charges. Those who paid the charges have since been refunded.

Labour TD and former party leader Joan Burton, who was part of the coalition government when water charges were introduced, is among those due to speak at a panel discussion at today’s event.

‘Lost the battle’

Economist Jim O’Leary, author of the report and Senior Research Fellow at the Whitaker Institute, said: “A sense of trying to achieve too much too soon is suggested by the approach to the overall water sector reform programme.

“All in all, in examining policy on water, our reading of the evidence is that it was driven by a vision that would have been more appropriate for a 7–10-year timeframe than a 3–5-year period.”

O’Leary added that while the Commission of Taxation’s proposals in 2009 in relation to property taxation provided the blueprint for the Local Property Tax, its proposals on water charges “were ignored and were in several essential respects the antithesis of what government chose to do”.

“At the end of the day, the government decisively lost the battle for the hearts and minds of the people,” he said. 

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