Kathleen Lynch (Cork North Central, Labour)

The budget hits a particular group of people who can ill afford to be hit with the type of increases the Government proposes. The charge that will affect virtually everybody is the increase in VAT. That increase, as well as the increase in the tax on petrol, suggests that petrol is a luxury item and that VAT is only applied to luxury goods, but that is not the case. VAT is levied on clothing, footwear and many other everyday items and the increase will hit everyone.

The combination of increases proposed here, namely the 8 cent increase on a litre of petrol, the increase in VAT and the €200 charge for a parking space, which is not in front of us now but which will be introduced and which will affect those who, for example, work in factories and are provided with car parking spaces, are harsh. Taxes are being imposed on people on very limited incomes and they will only realise it next year.

A total of €227 million will be raised by the Government through the increase in VAT, which is quite a significant sum. The 1% levy on income is probably the one provision which none of us in Opposition can understand. Had the Minister for Finance said that a 2% levy would be imposed on those earning above a certain threshold, that would be fine.

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