Ruairi Quinn (Dublin South East, Labour)

I thank the Minister for his reply and I hope he did not think I was inviting the current Government to micro-manage anything. It is not capable of managing its present job.

I will turn to macroeconomic management and offer two options which are not subject to international factors, over which the Government has no control. There are two issues of considerable concern currently. The first is the level of inflation, which informs social partnership talks. We have already heard Mr. Paul Sweeney and others for the Irish Congress of Trade Unions discussing compensation for increased inflation. We know from recent data from the CSO and the CPI that the major contributing factor to the current surge in inflation is the international price of oil, over which we have no control. I accept that.

The Government has control over the revenue, tax and VAT which is received from increased prices. Every time the international price of a barrel of crude oil goes up and is factored into the economy, the Government gets a slice of the action. The extra revenues the Minister for Finance gets is above and beyond what was budgeted in December of last year. Revenue incomes are way ahead of what would originally have been forecast. The Government does not need the extra tax revenue.

The surge in cost is putting pressure on inflation, which is in turn informing social partnership wage negotiations. The Government is therefore shooting itself in two feet at once. This Government does not have to depend on the international price of oil, and it could, if it was serious about controlling inflation, decide between now and the end of this year to reduce the revenue take, both in VAT and fiscal terms, in order to ameliorate the increase in price and inflation. Oil prices could subside slightly, as the problem with them is as much to do with refining capacity as supply from oil wells. That political choice is entirely under the control of the Government.

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