Fiscal Policies

recommendations were considered as part of the development of this Strategy and were discussed by a number of the expert sub-groups to inform the recommendations in Chapter 10.

That said, in recent years, the tax system, across multiple tax heads (VRT, motor tax, Benefit in Kind, capital allowances, carbon tax) has been leveraged to dis-incentivise the use of high emission fuels and to influence the purchase of more fuel-efficient private cars including EVs.

From a national policy perspective, parking is not managed centrally or nationally and does not fall within any one Government Department’s remit. It is a locally managed service, delivered by a range of different agents in different ways. Parking can be provided by public authorities, by private companies on behalf of public authorities or by commercial entities exclusively. Within the urban realm, parking can be provided on the street and off the street (adjacent to shops or within multi-storeys), at residential and commercial developments, at workplaces and transport hubs e.g., train stations and airports - to name but a few. Significant parking is also available at large out-of-town retail parks, industrial and enterprise zones, and at large tourist sites.

In addition to the above, other fiscal measures that can improve network performance, provide investment for transport enhancements, or help to manage peak-period congestion, where needed, are tolls, road user charging, parking charges, low emissions or clean air zones, mileage allowances, congestion charging, workplace parking levies, and incentives for sustainable business travel. While this is a non-exhaustive list, such measures, along with excise and carbon taxes, are aligned to the user and polluter pays model and can assist in meeting various policy and operational objectives while supporting the ongoing economic and fiscal sustainability of the State. These measures have proven very effective in optimising network efficiency and are among some of the case studies set out in Appendix 1.

A critical issue in designing a credible policy in relation to parking is the lack of data. Secondly, there is no single mechanism that can be deployed to effect a large-scale change in the quantum of available parking nationally so developing a consistent and coherent approach in a fragmented space is challenging. For these reasons, a multifaceted approach is required which should be deployed at various levels, based on a number of key principles as outlined in CAP23. Informed by the sub-group discussions and the work done already in this space, a number of impactful recommendations are made in Chapter 10, notably Recommendations 3, 5, and 30, to begin to chart a significant change in parking policies at all levels.

As highlighted by the analysis done by the Parliamentary Budget Office11 and the Fiscal Advisory Council12, some aspects of climate policies (e.g., transition to EVs) will reduce Exchequer revenues. As the Tax Strategy Group (TSG 18/07) noted – ‘The structural shift to lower CO2 emitting vehicles, and in particular any significant take up in Electric Vehicles (EVs), will severely challenge the revenue base from vehicles across fuel excise duties, motor-tax and VRT’13.

As cited later, the Commission on Taxation and Welfare also examined these issues and made a number of recommendations in relation to transport in the context of mutually achieving climate goals and long-term financial sustainability. For the purposes of this Strategy, there is a need to examine fiscal measures in the round from the perspective of their proven capacity to drive behavioural change, taking account of the impacts on Exchequer revenues over the medium to longer term.

Fiscal Policies

Traditionally, fiscal measures relating to transport were used to raise revenue for the Exchequer.

While the revenue raised was not ring-fenced for transport per se, the taxes and charges applied to private car use largely reflects the under recognised costs to the State of providing and maintaining related infrastructure, particularly the improvement and maintenance of roads and streets, and related services such as lighting and signage.

While most revenue from transport-related taxation is not hypothecated, it is intended that revenue from carbon taxes will be ring-fenced for just transition and other climate initiatives.

Typically, vehicle taxes are levied on ownership while fuel excise and carbon tax are based on usage.

The potential for fiscal measures to be deployed in a demand management context is explored

11 Parliamentary Budget Office - An Overview of EVs and Their Impact on the Tax Base

12 What-climate-change-means-for-Irelands-public-finances-Casey-and-Carroll-2023-Irish-Fiscal-Advisory-Council.pdf

13 Energy and Environmental Taxes - TSG 18/07