TASC, an independent group that seeks to address economic inequality, is recommending that the Government revisits its plans for a universal free water allowance.
The head of policy at TASC Sinead Pentony has said that the system proposed by the Government is highly inadequate.
“Any system of water charging must prioritise both equality and the environment. Measured against those goals, the system proposed by the Government earlier this week is highly inadequate.
“Providing a universal free allowance to all households, regardless of water requirements or income, is an inefficient use of scarce resources, and may mean consumers paying higher charges on use above the allowance threshold. In addition, if a universal free allowance is allocated on a household rather than an individual basis, larger households may be disadvantaged – and this will have a particular impact on families with children.
“The universal free allowance proposal represents poor targeting of scarce resources at low-income and vulnerable groups. In order to provide a small subsidy to low-income households, the Government will have to subsidise all households regardless of means and circumstances. This universal subsidy will have to be funded either through higher charges or increased taxation, or both. It is neither economically efficient nor socially equitable.
“Instead, TASC advocates the introduction of a graduated water subsidy (sometimes known as a differentiated water allowance), combined with increasing block tariffs designed to incentivise conservation. These proposals are included in TASC’s submission to the Department last February.
“This would mean households receiving a cash subsidy towards their water bills. The level of the subsidy would be determined by factors such as disposable household income and number of householders. In effect, this would mean that, as household income increases, the subsidy would decrease, finally tapering off altogether once household income reaches a certain level. At the same time, a system based on increasing block tariffs would ensure that profligate users pay more per unit of water than those who conserve water.
“TASC would urge the Government to go back to the drawing board and develop a system which prioritises both equality and the environment,” Ms Pentony concluded