Published on December 9, 2007. By John Reynolds
Despite claims that we saw a Green Budget last week, environmental taxes are reaping the Government more than 13 times the sum it hands back in green grants for homes and tax breaks for businesses.
According to Government figures, Finance Minister Brian Cowen will divvy out just €260m through grants and tax relief schemes — only about 7 per cent of the €3.6bn it will amass in green taxes.
But last year, we shelled out €2.042bn in tax on petrol and diesel alone. Drivers contribute a further €1.3bn in VRT to the Department of Finance.
“The Budget included motor tax under the climate change and environmental matters heading. But the €83m rise in income hasn’t been ring-fenced for environmental spending. It’s nothing more than stealth tax,” a Fine Gael spokesman claimed.
Homeowners are likely to claw back about €88m in total for biomass heating, solar panels and other eco-friendly measures. Tax breaks for renewable energy through corporation tax relief and the Business Expansion Scheme amounted to only €26m last year. Other green spending includes €20m allocated for research, conservation and wind and wave energy.
“Green grants and tax breaks need to be more heavily rolled out. It would be better to abolish VRT and motor tax and have a fairer tax just on fuel so that you pay every time you drive,” said UCD environmental economist, Professor Frank Convery.
A spokesman for the Department of Energy, Communication and Natural Resources argued: “Over the lifetime of the National Development Plan, we’re investing €8.5bn in energy infrastructure to adapt the electricity grid to renewable technologies. Other green spending includes €500m on smart meters for homes by 2012, €100m in home insulation and a bio-energy action plan.”
“Next year we’re investing €1.7bn in more energy-efficient power generation and transmission, including wind power. Some of this could be described as green,” a spokesman for the Department of Finance added.