Arthur Morgan (Louth, Sinn Fein)

Increasing the VAT rate in the budget was a disaster and had a considerable psychological blow. It is unfortunate in terms of revenue income that the British sought to reduce their VAT rate by 2.5% effectively at or about the same time. The impact was significant. I will not share any more of the incidents from Newry car parks or precincts with the House because the media had a particular interest in those episodes the last time. We will stick with the VAT issue.

Even a marginal reduction would have had a significant positive impact as opposed to the increase's negative impact. I regard it as ham-fisted and unnecessary. We should be seeking to stimulate the economy and encourage people to get back into spending mode, but the opposite is occurring. Consumption rates are decreasing across all indices.

The increase was wrong because VAT has a disproportionate effect on low income families. For this reason alone, it should not have been increased. Many household goods that those families would seek to purchase have been affected. The additional annual cost to them is approximately €500. Instead of increasing the rate, will the Minister consider reducing it at this late stage?

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