Arthur Morgan (Louth, Sinn Fein)

I welcome the opportunity to address the Estimates of receipts and expenditures. I do so more in hope than expectation because, unfortunately, the poor old Department of Finance has an atrocious record in terms of getting it right. It has got it wrong for some considerable time. In the good old days, it grossly underestimated the receipts and the opposite is the case since the downturn came. While I admit it is a major challenge for anybody to forecast accurately, to continuously to get it as wrong as the Department has done is some achievement.

I note the National Pensions Reserve Fund remains under some pressure. Of course, €7 billion of funding was wasted in recapitalising AIB and Bank of Ireland. This was a huge waste. The money went into the banks to recapitalise them and the expectation we all had was that the banks would begin creating a revenue stream for SMEs, with which Members from all sides of the House agreed. However, we are all hearing stories of viable businesses going to the wall because they simply cannot get enough funding to keep them turning over. The banks have not freed up credit. It would have been much better if the €7 billion, or at least a portion of it, had been put into a jobs stimulus package. We would have had more value from that than from what has happened.

Every Government measure seems to have depressed receipts. The increase in VAT in the budget of October 2008, which I accept was relatively small in that it increased from 21% to 21.5%, had a massive psychological influence in that people began going North in significant numbers. It is not just a coincidence that it is around this time that the exodus to the North commenced really seriously. I hope the Minister will adopt at least one of the measures we put forward in our pre-budget submission, namely, a decrease in excise on alcohol for the Christmas period. We hear figures today that some 48% of all off sales of alcohol consumed in this State are purchased in the North, which is scandalous. If the Minister reduces the level of excise on alcohol for the Christmas period, I have little doubt that it will massively enhance the Exchequer take here.

Alcohol is one of the key factors in people choosing to go North. To give one example, on Sunday last a football club was doing a bag-packing process in Sainsburys in Newry. One of the members of the club told me that three friends in their 20s from County Tipperary came through, saying they had heard of the prices in the North and decided to check them out. The first man had STG£490 worth of alcohol in his trolley, the second had over STG£500 worth and the third had approximately STG£380 worth. They had nothing else but alcohol - no other goods, sweets or confectionary of any kind. The men said the reason they had bought this amount was that when they arrived, they texted home to their friends to tell them deals were available and they were asked to get them whatever they could get.

Alcohol is one of the main motivating factors for people going North. I hope the Government takes the opportunity tomorrow, in the budget speech, to announce that it will reduce excise. It is not just about supermarkets, off licences or businesses along the Border corridor. It is right down as far as Clare and Cork, and the example I have given is a midlands county. We need to do something to stop the haemorrhage of business on one of the anchor products - alcohol. I am not encouraging the use of alcohol by any means. I am simply observing that we need to deal with this issue as alcohol is going to be consumed in any case, which we all know. It is just a matter of dealing with it. I hope that opportunity will be taken tomorrow.

What I would like to see in any event - the Minister will not be surprised at this - is harmonisation of taxes across the island, which would stop the seesaw effect we get, for example, in regard to diesel and petrol, which people come here from the North to purchase. There is no doubt the Border counties on the Southern side are enjoying something of a benefit in that regard. I hope we can get a position of stability so that this seesawing does not happen. It has closed all the Northern filling stations, but it is not that long since most of the Southern ones were closed.

I note that capital gains tax and capital acquisition tax are expected to fall. I have advocated in the Sinn Féin pre-budget submission that we increase the rate of capital gains tax from 20% to 40%. These are wealth taxes - they are not productive taxes - so there is no reason that we could not increase them from 25%, the current rate of capital acquisition tax.

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