Michael McGrath (Cork South Central, Fianna Fail)
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Question 983: To ask the Minister for Health the approximate cost to the Health Service Executive arising from the 2% increase in the standard rate of VAT; and if he will make a statement on the matter. [1515/12]

James Reilly (Dublin North, Fine Gael)
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The decision to increase the higher rate of VAT from 21% to 23% was already agreed with the IMF and the European authorities, although it was originally intended to increase VAT by 1 per cent in 2013 and 1 per cent in 2014. The Government has decided, in the context of the budgetary challenges, to bring forward this measure, whilst committing not to increase the VAT rate past 23% during the lifetime of the Government.

The HSE is currently assessing the effect of the VAT increase in relation to its procurement budget but it is not possible at this stage to be definitive. An early estimate of the effect of the rate change has indicated that it could be of the order of €50m and this additional cost will be taken into account in the context of the National Service Plan for 2012.