Ciarán Lynch (Cork South Central, Labour)

What we are witnessing here is the type of economics written on the back of a cigarette box. We saw it earlier with the calculations of the Minister for Education and Science, Deputy Batt O'Keeffe, on the reintroduction of third level fees. We see it here again this evening with calculations made on a crisis-driven basis rather than with a strategic approach, particularly one to get the country out of the situation the Government to which has brought us.

I will refer to the matters in hand, particularly the increase of VAT to 21.5 % and the 8 cent increase in the price of a litre of petrol. This is a double whammy because the cost of petrol has increased and the increase of VAT to 21.5% is, in itself, an additional increase. The Government is hoodwinking the public because they are not being hit with an 8 cent increase, but an 8 cent increase with an increase in VAT to 21.5% on top of it.

What should have happened — let me make this clear because it has been a matter of record for some time — is that prior to the Government altering the VAT bands, it should have examined what is included in them. I will give an example of an item which has increased in price, and prices are an extremely relevant issue for those who might be termed "Mr. and Mrs 1%" on the minimum wage who are affected by the budget. Their cost of living has not only increased by 1% with the levy, but also by 0.5% in VAT. This is a 1.5% automatic increase in the cost of living for people on the minimum wage as a result of the budget.

A car owner with a child is legally required to place a safety seat in the car. The VAT on this item has increased to 21.5%. It should not be at the top rate of VAT. In fact, it should not be subject to VAT at all because it is a legal requirement for a parent to have it in the car.

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