Kieran O'Donnell (Limerick East, Fine Gael)

While I note with interest that the Taoiseach stated we have high excise duties for health reasons, I am not sure that is the full picture. Reducing excise duties has major implications, in particular for Border areas which have significant problems in the sense that alcohol has been a loss leader for shops over the Border, so there is certainly merit in this measure. In the last budget, the Government increased the VAT rate from 21% to 21.5%, which would apply to these alcohol products. I note that the increase in the last budget took effect virtually from budget day whereas the reduction in VAT will only take effect from 1 January next. I would have thought that during the very busy Christmas period it would have made a lot of sense, for the benefit of both businesses and consumers, to bring in that change effective from tonight rather than 1 January. I fail to see the logic of waiting until 1 January when the rates were increased more quickly after the last budget.

Furthermore, the Taoiseach made reference to the consumer price index in the context of boosting the economy. The budget is very short of proper fiscal stimulus in terms of an integrated policy for generating jobs and boosting the economy. The Government has made a token gesture in terms of employers' PRSI but we felt the cost to the employer should be cut by half from 8.5% to 4.25% at the lower rate and by 2% at the higher rate. There is no reference whatsoever to this. We are discussing cross-Border activity. The whole issue of the travel tax appears to be still sitting there. It has had a hugely negative effect on the tourism industry for the amount of revenue it brought in-----

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