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Right2Water Presentation 9 January 2017

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Dave Gibney
Dave Gibney

The document discusses issues related to water services funding and management in Ireland. It provides information on: 1) The establishment of a Water Commission to assess funding options and make recommendations taking into account infrastructure needs, borrowing proposals, conservation, standards, and stakeholder input. 2) Opinions that the current Irish system of funding water through progressive taxation is equitable, and that general taxation is the best method to fund infrastructure investment. 3) Concerns that water metering would cost over 1 billion but not reduce usage, and that related costs could more than double annual spending on water services.

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Right2Water WEXFORD 23-11- 2016 Water Commission Referendum Next Steps?
Water Commission: TOR To assess and make recommendation upon the funding of domestic public water services in Ireland and improvements in water quality, taking into account: The maintenance and investment needs of the public water and waste water system on a short, medium and long-term basis; Proposals on how the national utility in State ownership would be able to borrow to invest in water infrastructure; The need to encourage water conservation, including through reviewing information campaigns on water conservation in other countries; Irelands domestic and international environmental standards and obligations; The role of the Regulator; and Submissions from all interested parties. The Commission will be empowered to commission relevant research and hear evidence to assist this work. The Commission shall endeavour to complete its work within five months of its establishment
Best funding system? "The Irish system of paying for water and sanitation services through progressive taxation and non- domestic user fees, is an exemplary model of fair equitable and sustainable service delivery for the entire world. Maude Barlow Author of Blue Gold, Blue Planet, Blue Future, Blue Covenant Senior Advisor on Water to the 63rd President of the United Nations General Assembly Recipient of 12 honorary doctorates Lifetime Achievement 2008 Canadian Environment Awards, 2009 Earth Day Canada Outstanding Environmental Achievement Award The 2009 Planet in Focus Eco Hero Award 2011 EarthCare Award, the highest international honour of the Sierra Club (U.S.).
European Water Movement "It is clear that the best method of securing access to water, and securing funds for infrastructural investment, is through general taxation. The European Water Movement is an open, inclusive and pluralistic network whose goal is to reinforce the recognition of water as a commons and as a fundamental universal right. We are united to fight against privatisation and commodification of this vital good, and to construct a public and communal management of water, founded on the democratic participation of citizens and of workers.
Maintenance & Investment needs?
Cant afford to build houses? Hospitality Sector VAT rate 620m Budget 2015 Income Tax Change (41% - 40%) 405m USC Changes 237m Budget 2016 USC Threshold Change & Cut 772m Earned Income Credit Changes 61m Knowledge Development Box 50m Motor Tax Cuts 43m Capital Acquisitions Tax 33m Capital Gains Tax (Entrepreneur Relief) 27m Employers PRSI Threshold Changes 7m Budget 2017 USC Thresholds and Cut 390m Earned Income Tax Credit 58m Capital Acquisition Tax Thresholds 22m DIRT reduction 9m TOTAL:
Environmentally Unsound International research shows that installing domestic water meters is unlikely to make any real difference to the amount of water used by families. For example in the UK, Germany, and the Netherlands it has been found that metering each home makes little difference to the amount of water used by families. SIPTU, 2011
No Water Meters Metered Water Charges The UK average is 68,405 litres per person Irish Water - 54,750 litres per person Conservation?
Why the meters? Senior Executive Engineer for Water, Gerry Concannon, estimated that the cost of unmetered water is currently about 350.00 p.a. per domestic unit. When all of the costs of metering involving installation, maintenance, administration and replacement are considered he pointed out that this cost almost doubles. (SIPTU - 2011) The proposed expenditure on water metering would mean spending more than 1 billion which we dont have on something we dont need! Engineers Ireland, 2011
Economically inefficient Bringing in water charges means you increase costs through: Advertising expenditure (3m) Consultants (90m) Call centers Billing cycle (6m) IBEC fees (min 100k) Metering (500m) Debt collection agencies Borrowing repayments interest, etc. 600m per year approx Before you fix a leak or purify one drop of water. Thats more than double the spend on water and sewage in 2013. Right2Water believes that money would be better spent fixing leaks, upgrading infrastructure and incentivising water saving devices.
Right2Water Presentation 9 January 2017
Allowances v agenda? Fiscal Compact encourages off-balance sheet debt/GDP ratio Starts with the revenue raising figure domestic water charges to raise 271m UN resolution 36,500 litres per person (human right to water). If everybody reduces usage to 36,500 litres still have to raise 271m Unit Price Increase Every litre above allowance would be charged at extortionate rate unemployed, underemployed, pensioners, disabled, etc. Income allowances would be eroded over time eg. bin charges Allowances are also a cost - 213m for fuel allowance per annum Pay for what you use? Polluter pays? commercial water charges 90% v 10%
Polluter pays? BRITVIC: Pre-tax profits climbed 10.6pc to 贈147m The operating profit margin rose 100 basis points to 13.2pc, prompting Britvic to raise its full-year dividend 10pc to 23p. Earlier this year Britvic bought Brazilian soft drink maker Ebba for 贈114m, giving it access to the sixth-largest soft drinks market in the world, and the second largest concentrates market. Mr Litherland acknowledged economic conditions in Brazil were challenging, but said the Ebba acquisition would deliver sustainable growth in the coming years
Socially Destructive The original water pricing before the Right2Water demos and government concessions meant a retail worker would have spent approx 3% of their income on water at the schemes inception which is the internationally recognised water poverty rate. The price of water in five US cities Austin, Charlotte, Chicago, San Francisco and Tucson ballooned by more than 50% over the last five years. In the UK, water costs have gone up by more than 313% since privatisation 25 years ago almost double the Retail Price Index (RPI) rate. In the city of Detroit in the United States 70,000 families have had their water shut off in recent years for being unable to pay bills. This has also occurred in Rome, parts of France and Eastern Europe, and the phenomenon is growing.
Privatisation Privatisation Of Irish Water Is Ultimately Envisaged, Eurostat Water as an asset class will, in my view, become eventually the single most important physical-commodity based asset class, dwarfing oil, copper, agriculture commodities and precious metals. Citigroup Chief Economist Willem Buiter Water is now 3 times as profitable as oil or gas
Right2Water Presentation 9 January 2017
Right2Water Presentation 9 January 2017
Right2Water Presentation 9 January 2017
The Water Charges Model In 2013 in Britain, private water companies made profits of: 2.81bn and paid 2.55bn to shareholders while paying only 101m in taxes. Seven water companies paid no corporation tax at all and a report has shown that the industry is failing to help customers with sky- high bills. The largest, Thames Water, made more than 贈1.8billion between 2008 and 2013 and paid more than 贈1.4billion to its shareholders. It paid just 贈2.3million in corporation tax in that period, an effective tax rate of 0.128%. They also paid no corporation tax in 2013 while making 贈145m in profit, and paying out 贈231m in dividends to shareholders.
Borrowings? The huge levels of debt used by the industry to finance its operations are costing UK consumers 贈2bn a year more than if it was publicly financed equating to nearly 贈80 per household. The figure comes from the difference the Government pays to borrow money and the rates that the water companies secure on the international money markets. In total, the companies have amassed debt of 贈49bn and paid more than 贈3bn in interest payments on it in 2012, as well as 贈884m in dividends. Total revenue in 2012 came in at 贈10bn. This suggests that almost a third of the money spent by people on water bills in England and Wales went to paying either interest charges on water company debt or dividends to their owners, most of which are now based overseas.
Right2Water Presentation 9 January 2017
Expert Water Panel An Expert Commission will be set up to assess and make recommendation upon the funding of domestic public water services in Ireland and improvements in water quality, taking into account: The maintenance and investment needs of the public water and waste water system on a short, medium and long-term basis; Proposals on how the national utility in State ownership would be able to borrow to invest in water infrastructure; The need to encourage water conservation, including through reviewing information campaigns on water conservation in other countries; Irelands domestic and international environmental standards and obligations; The role of the Regulator; and Submissions from all interested parties.
Interest Profits Metering process Spending on water and infrastructure
What method would you choose? 0 20 40 60 80 100 120 Domestic Water Charges General Taxation Spending on water and infrastructure Metering process Profits Interest 21 % 13 % 33 % 33 % 100%
Right2Water Presentation 9 January 2017
Referendum
Referendum Article 28 Section 4:2.1 The Government shall be collectively responsible for the protection, management and maintenance of the public water system. The Government shall ensure in the public interest that this resource remains in public ownership and management. FF & FG want amendments!
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Right2Water THANK YOU

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Right2Water Presentation 9 January 2017

  • 1. Right2Water WEXFORD 23-11- 2016 Water Commission Referendum Next Steps?
  • 2. Water Commission: TOR To assess and make recommendation upon the funding of domestic public water services in Ireland and improvements in water quality, taking into account: The maintenance and investment needs of the public water and waste water system on a short, medium and long-term basis; Proposals on how the national utility in State ownership would be able to borrow to invest in water infrastructure; The need to encourage water conservation, including through reviewing information campaigns on water conservation in other countries; Irelands domestic and international environmental standards and obligations; The role of the Regulator; and Submissions from all interested parties. The Commission will be empowered to commission relevant research and hear evidence to assist this work. The Commission shall endeavour to complete its work within five months of its establishment
  • 3. Best funding system? "The Irish system of paying for water and sanitation services through progressive taxation and non- domestic user fees, is an exemplary model of fair equitable and sustainable service delivery for the entire world. Maude Barlow Author of Blue Gold, Blue Planet, Blue Future, Blue Covenant Senior Advisor on Water to the 63rd President of the United Nations General Assembly Recipient of 12 honorary doctorates Lifetime Achievement 2008 Canadian Environment Awards, 2009 Earth Day Canada Outstanding Environmental Achievement Award The 2009 Planet in Focus Eco Hero Award 2011 EarthCare Award, the highest international honour of the Sierra Club (U.S.).
  • 4. European Water Movement "It is clear that the best method of securing access to water, and securing funds for infrastructural investment, is through general taxation. The European Water Movement is an open, inclusive and pluralistic network whose goal is to reinforce the recognition of water as a commons and as a fundamental universal right. We are united to fight against privatisation and commodification of this vital good, and to construct a public and communal management of water, founded on the democratic participation of citizens and of workers.
  • 6. Cant afford to build houses? Hospitality Sector VAT rate 620m Budget 2015 Income Tax Change (41% - 40%) 405m USC Changes 237m Budget 2016 USC Threshold Change & Cut 772m Earned Income Credit Changes 61m Knowledge Development Box 50m Motor Tax Cuts 43m Capital Acquisitions Tax 33m Capital Gains Tax (Entrepreneur Relief) 27m Employers PRSI Threshold Changes 7m Budget 2017 USC Thresholds and Cut 390m Earned Income Tax Credit 58m Capital Acquisition Tax Thresholds 22m DIRT reduction 9m TOTAL:
  • 7. Environmentally Unsound International research shows that installing domestic water meters is unlikely to make any real difference to the amount of water used by families. For example in the UK, Germany, and the Netherlands it has been found that metering each home makes little difference to the amount of water used by families. SIPTU, 2011
  • 8. No Water Meters Metered Water Charges The UK average is 68,405 litres per person Irish Water - 54,750 litres per person Conservation?
  • 9. Why the meters? Senior Executive Engineer for Water, Gerry Concannon, estimated that the cost of unmetered water is currently about 350.00 p.a. per domestic unit. When all of the costs of metering involving installation, maintenance, administration and replacement are considered he pointed out that this cost almost doubles. (SIPTU - 2011) The proposed expenditure on water metering would mean spending more than 1 billion which we dont have on something we dont need! Engineers Ireland, 2011
  • 10. Economically inefficient Bringing in water charges means you increase costs through: Advertising expenditure (3m) Consultants (90m) Call centers Billing cycle (6m) IBEC fees (min 100k) Metering (500m) Debt collection agencies Borrowing repayments interest, etc. 600m per year approx Before you fix a leak or purify one drop of water. Thats more than double the spend on water and sewage in 2013. Right2Water believes that money would be better spent fixing leaks, upgrading infrastructure and incentivising water saving devices.
  • 12. Allowances v agenda? Fiscal Compact encourages off-balance sheet debt/GDP ratio Starts with the revenue raising figure domestic water charges to raise 271m UN resolution 36,500 litres per person (human right to water). If everybody reduces usage to 36,500 litres still have to raise 271m Unit Price Increase Every litre above allowance would be charged at extortionate rate unemployed, underemployed, pensioners, disabled, etc. Income allowances would be eroded over time eg. bin charges Allowances are also a cost - 213m for fuel allowance per annum Pay for what you use? Polluter pays? commercial water charges 90% v 10%
  • 13. Polluter pays? BRITVIC: Pre-tax profits climbed 10.6pc to 贈147m The operating profit margin rose 100 basis points to 13.2pc, prompting Britvic to raise its full-year dividend 10pc to 23p. Earlier this year Britvic bought Brazilian soft drink maker Ebba for 贈114m, giving it access to the sixth-largest soft drinks market in the world, and the second largest concentrates market. Mr Litherland acknowledged economic conditions in Brazil were challenging, but said the Ebba acquisition would deliver sustainable growth in the coming years
  • 14. Socially Destructive The original water pricing before the Right2Water demos and government concessions meant a retail worker would have spent approx 3% of their income on water at the schemes inception which is the internationally recognised water poverty rate. The price of water in five US cities Austin, Charlotte, Chicago, San Francisco and Tucson ballooned by more than 50% over the last five years. In the UK, water costs have gone up by more than 313% since privatisation 25 years ago almost double the Retail Price Index (RPI) rate. In the city of Detroit in the United States 70,000 families have had their water shut off in recent years for being unable to pay bills. This has also occurred in Rome, parts of France and Eastern Europe, and the phenomenon is growing.
  • 15. Privatisation Privatisation Of Irish Water Is Ultimately Envisaged, Eurostat Water as an asset class will, in my view, become eventually the single most important physical-commodity based asset class, dwarfing oil, copper, agriculture commodities and precious metals. Citigroup Chief Economist Willem Buiter Water is now 3 times as profitable as oil or gas
  • 19. The Water Charges Model In 2013 in Britain, private water companies made profits of: 2.81bn and paid 2.55bn to shareholders while paying only 101m in taxes. Seven water companies paid no corporation tax at all and a report has shown that the industry is failing to help customers with sky- high bills. The largest, Thames Water, made more than 贈1.8billion between 2008 and 2013 and paid more than 贈1.4billion to its shareholders. It paid just 贈2.3million in corporation tax in that period, an effective tax rate of 0.128%. They also paid no corporation tax in 2013 while making 贈145m in profit, and paying out 贈231m in dividends to shareholders.
  • 20. Borrowings? The huge levels of debt used by the industry to finance its operations are costing UK consumers 贈2bn a year more than if it was publicly financed equating to nearly 贈80 per household. The figure comes from the difference the Government pays to borrow money and the rates that the water companies secure on the international money markets. In total, the companies have amassed debt of 贈49bn and paid more than 贈3bn in interest payments on it in 2012, as well as 贈884m in dividends. Total revenue in 2012 came in at 贈10bn. This suggests that almost a third of the money spent by people on water bills in England and Wales went to paying either interest charges on water company debt or dividends to their owners, most of which are now based overseas.
  • 22. Expert Water Panel An Expert Commission will be set up to assess and make recommendation upon the funding of domestic public water services in Ireland and improvements in water quality, taking into account: The maintenance and investment needs of the public water and waste water system on a short, medium and long-term basis; Proposals on how the national utility in State ownership would be able to borrow to invest in water infrastructure; The need to encourage water conservation, including through reviewing information campaigns on water conservation in other countries; Irelands domestic and international environmental standards and obligations; The role of the Regulator; and Submissions from all interested parties.
  • 24. What method would you choose? 0 20 40 60 80 100 120 Domestic Water Charges General Taxation Spending on water and infrastructure Metering process Profits Interest 21 % 13 % 33 % 33 % 100%
  • 27. Referendum Article 28 Section 4:2.1 The Government shall be collectively responsible for the protection, management and maintenance of the public water system. The Government shall ensure in the public interest that this resource remains in public ownership and management. FF & FG want amendments!
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