CLONMEL, Ireland — Michael Lumley, a 63-year-old unemployed father of three, is one of the hundreds of thousands of people around Ireland in recent months protesting new water charges introduced by the government. After six years of austerity measures brought in amid the Great Recession, he said, the water fees have brought him to a breaking point.
“I suffer from severe arthritis, and I can no longer work,” said Lumley, via email from his home in County Tipperary. “I receive a disability allowance to survive on each week, and like everyone else, I have bills to pay. I am dreading Christmas, as I will struggle to pay for it. I already pay for my water and can’t afford to pay any more.”
The government’s decision to set up a semi-state company to charge for water usage — replacing the current water system, which is paid for through general taxation — has proved the most controversial of the austerity measures introduced in Ireland since 2008 and has given birth to a mass social movement. The countrywide protests aim to prevent what is seen as double taxation on water for an already cash-strapped populace. A massive national protest is set to take place in Dublin, with others across the country, on Dec. 10 to coincide with Human Rights Day.
It has attracted international attention. Members of the Detroit Water Brigade — where more than 27,000 homes had their water cut off for not paying their bills — will arrive in Dublin to join the protests.
While the rest of Europe levies a direct charge for water, Ireland has until now funded its supply through taxes. The government tried to quell the discontent by publishing the water charges last month after the protest movement reached a fever pitch.
According to the new rates published in a memo of the government’s water services bill, the water bill for a single-adult home will be capped at 160 euros (about $200) per year, and the maximum charge for a multi-adult home will be capped at 260 euros (about $325) per year, regardless of the means of the occupants. These caps will remain in place until 2019, after which the rates may be increased. In the meantime, the government has made no explicit reduction in residents’ general taxes, which have financed the water supply to date.
Lumley feels the government’s move to create an independent charge for water is unnecessary. “Over the past six years we have had to pay an extra 5 percent on motor road tax, 5 percent on vehicle registration tax and 2 percent on VAT [the national sales tax]. This money raises 1.7 billion euros a year towards water services. The government spends 1.2 billion euros on the current water system each year. Where does the rest go?”
Meanwhile, he said, his disability payment has been reduced. "I, along with countless others, cannot afford to pay again for something we already pay for," said Lumley. "That is why I am against this unfair tax — that and the fact that the money raised from it will go to pay off banking debts, not my debt, so why should we have to pay it?”
In 2008, after the collapse of the banking system, the Irish government nationalized the private banking debt of six banks, taking loans of almost 85 billion euros from the European Financial Stabilisation Facility and the International Monetary Fund. The Irish people were forced to foot the bill through a range of austerity measures that have caused social repercussions such as home repossessions, homelessness, cutbacks to social services, unemployment and emigration. For the government to repay the loans, an independent assessor made a number of recommendations, including the implementation of an independent water service provider.
The Irish government set up that company, Irish Water, in July 2013. It is responsible for the operation of public water services, including management of national water assets, maintenance of the water system, investment and planning, managing capital projects, customer care and — most controversially — billing for water usage.
The coalition government of Fine Gael and the Labour Party argue that billing for water usage is needed to provide the funds to modernize an antiquated water infrastructure that has been neglected for decades.
Irish Water has paid out over 85 million euros in fees to consultants, contractors and lawyers as part of a startup budget of 180 million euros. The CEO of Irish Water’s annual salary of 200,000 euros has proved another sore point for voters who are angered by the government’s failure to fully reform the practices of previous governments in paying excessive salaries to CEOs of semi-state companies.
According to most recent data from the Central Statistics Office in Ireland, more than 750,000 Irish were living in poverty in 2012, including 220,000 children and 68,740 pensioners. From 2007 to 2012, the percentage living in consistent poverty nearly doubled, from 4.2 to 7.7 percent. In the same period, the gap between the richest and poorest 20 percent of the population increased by more than 11 percent.
Ireland, whose private banks gambled (and lost) more per capita than any other European country, was disproportionately affected by the economic crisis. The tiny country is paying almost 42 percent of the total European banking debt, despite making up only 1 percent of its population, according to Eurostat.
The crisis has cost Ireland 25 percent of its GDP, compared with 1.5 percent in Germany. While the average cost is 192 euros per person in the EU, the figure stands at 9,000 euros per person for Irish citizens, not taking into account the 18 billion euros put in from the Irish National Pension Reserve Fund.
“I appreciate that any new charge is difficult, especially in light of the last number of years,” said Transport Minister Pascal Donohue. “However, very few people, I think, would disagree with the fact that we need to put a system in place that will allow for adequate investment in our water services.
In 2002, Ireland was condemned by the European Court of Justice over findings of microbiological contamination of the water supplies. An outbreak of waterborne cryptosporidiosis in Galway in 2007 sickened more than 240 people and led to the imposition of boil-water notices there for five months. Nearly 65,000 residents of County Roscommon have had undrinkable water or been on boil-water notices for nearly 10 years because of contamination.
“If we do this, we can ensure people are not on boil notices for undrinkable water in parts of the country for more than a decade,” Donohue said.
“This time last year Dublin nearly ran out of water during the International Web Summit. We cannot allow ourselves to be put in that position again,” he added, referring to water restrictions in the nation’s capital during a summit showcasing Ireland as a good business investment option. “We can prevent the more than 40 percent of our water that is leaking away from doing so, and we can send a message to investors that Ireland is a good place in which to do business.”
The high leakage rate is a result of antiquated pipes in need of replacement.
“We have a broken water system that needs investment to bring it up to standard,” said Jerry Buttimer, a member of the Fine Gael in the Irish Parliament, adding that Irish Water, as a semi-state company, can borrow on the markets 1 billion euros per year for the next 10 years. “If we don’t do it this way, we must either pay a lot more in our income taxes or continue with a broken system.”
Ireland is the only Organization for Economic Cooperation and Development country that pays its water through general taxation.
Irish Water began installing water meters outside homes earlier this year, which led to protests throughout the country. Stories about communities mobilizing against water meter implementations and videos shot on cellphones have trended on Facebook and Twitter feeds nationwide over the last few months.
Irish performance artist Andrew Galvin created a YouTube video, “On the 10th of December Ireland will rise,” in which he calls for the Irish people to take to the streets on Wednesday. The video has been watched more than 27,000 times since its upload Nov. 29.
“The response to this double taxation has been overwhelming … There are now well over 200 dedicated boycotting pages on social media in operation all over the country,” said Tara DeDanann a social media strategist for the Boycott Irish Water campaign.
DeDanann worries that the creation of Irish Water is part of a wider international trend of water privatization, which she sees as wholly unfair.
“If they are introducing independent charges, where is the lowering of the taxes we already pay for the system that is in place?” she asked.
Deirdre Clune Fine Gael MEP for Ireland South argues that water supply was never allocated the adequate funding necessary through general taxation measures.
“General taxation is used for hospitals, roads, etc., and there has never been enough for water. We need a separate entity, a publicly owned utility to borrow to invest in our water system,” Clune said. “The truth is that we haven't paid for our water infrastructure properly."
Paul Murphy, an Anti-Austerity Alliance member of Irish Parliament representing Dublin South-West, has been active in the boycott campaign. He sees the water charges as an overburdensome austerity measure that risks leading to privatization of Irish Water.
“The notion that an independent water company is necessary to have proper investment in water infrastructure is nonsense,” Murphy said. “In Britain, since privatization in 1989, investment has declined, while prices have increased dramatically.”
According to the Water Services Regulation Authority in England and Wales, the average household bill for water in Britain in 2009–10 was 42 percent higher than in 1989, before accounting for inflation.
Murphy supports significant investment in water services but wants to see it funded through “progressive taxation on income, wealth and corporate profits."
Ireland has come under continued criticism from other members of the European Union for its low corporate tax rate of 12.5 percent, which is well below the European average of 21 percent and continues to attract large multinational companies like Google and Amazon to set up shop in Ireland.
DeDanaan said she will keep protesting until Irish Water is abolished.
“Our various leaders have, for many decades under our centralized party system, proved themselves to be weak in the face of bullying from Europe and the corporations who have vested interests in our resources,” she said. “Not only will the Irish people see to the reversal of this latest theft, but a rising number are agreeing that it’s about time we brought our whole governmental system under major scrutiny too. We’re finished giving our money and resources away for other people’s mistakes.”
Correction: An earlier version of this article stated that Paul Murphy represents the Socialist Workers Party. He currently represents the Anti-Austerity Alliance in the Irish Parliament.