Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)

The increase in the standard rate of VAT from 21% to 21.5% will be punitive for a significant swathe of people who will find it increasingly difficult to afford the additional outlay they will be obliged to make in respect of consumables and their household needs. This will not merely have the effect of discouraging further spending by people who come within the remit of the Exchequer. Deputies Morgan and Crawford referred to the increase in the excise duty on petrol and while there has been a steady rise in sales at filling stations in this jurisdiction in recent years as a result of the differential between the price in the North and that which obtains in the South, the reality is that a significant number of people who live in counties immediately on this side of the Border now do their shopping in the North. This is a fact of life.

An increase in VAT will encourage people from Donegal, Sligo, Leitrim, Cavan, Monaghan and Louth who shop in the Six Counties to continue doing so. This increase is an incentive for those individuals to leave their local areas and travel north of the Border. It is proposed in Financial Resolution No. 7 to increase the excise duty on petrol by 8 cent per litre, which will act as a disincentive for traffic from the Six Counties to travel south. This will prove to be a double whammy to local economies in Border counties from Donegal to Louth.

I am deeply concerned with regard to the effect the propositions in Financial Resolutions Nos. 4 and 7 will have. The consequences will be extremely severe. Financial Resolution No. 7 is unquestionably a tax on those who need to use their cars to travel to work. There is no public transport infrastructure whatsoever in the Border counties and the overwhelming majority of people who live there need their cars in order to travel to work. An 8 cent increase in the price of a litre of petrol and a 4% increase in motor tax — dealt with in a later financial resolution — on all cars with engines below 2.5 litres will prove extremely punitive. Ordinary people will find it not just difficult, but impossible to cope. Financial Resolution No. 7 is a disincentive to work.

The collective weight of all these measures will undoubtedly lead people to face the financial reality that, in light of the budget, they would be better off out of work rather than trying to maintain and sustain their families by remaining in employment. I strongly oppose both financial resolutions.

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