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The Government has been urged to examine the introduction of congestion charges as a measure to help tackle the cost of climate change.
In a pre-budget report, following a series of meetings with Ministers, policy experts and other stakeholders, the Oireachtas budget oversight committee said a charge on motorists could be used to enhance other forms of transport.
This followed a presentation to the committee by the Organisation for Economic Co-operation and Development. “The OECD was of the view that Ireland should consider congestion charges. It was outlined that congestion charges should not be seen as a charge on all private vehicles, rather it is to make drivers pay for the negative externalities they are producing.
“Revenue from these charges could fund investment to enhance travel conditions for pedestrians, cyclists and public transport users, and provide income support to vulnerable households. The OECD also noted that the reallocation of road space towards walking and cycling should be prioritised.”
The committee, chaired by TD Neasa Hourigan, also recommended that tax expenditure reviews be published in advance of the budget in mid–October to “allow proper scrutiny”.
In addition, it recommended that any short-term increases in corporation tax revenue should not “be used to fund increases in current expenditure though there may be some exceptions”. This reflects the debate at global level on setting a minimum rate of corporation tax.
It also recommended that the Government’s electric vehicle (EV) strategy be reviewed to ensure it “represents value for money and is achieving its objectives”.
An OECD report highlighted that Ireland has introduced some of the most generous subsidies for EVs. “However, the grant does not cover the differential between an EV and a conventional car and therefore, tends to mostly benefit wealthy households who can afford to bridge the price gap. The level of taxation on conventional cars is also insufficient to encourage a shift to EVs,” the report notes.
The committee will continue its pre-budget scrutiny in September, and publish a final report in early October.