Michael McGrath (Cork South Central, Fianna Fail)

The reduction in the lower rate of VAT between the middle of this year and the end of the 2013 will cost approximately €850 million gross and the reduction in the lower rate of PRSI will cost more than €400 million between now and the conclusion of the EU-IMF programme in 2013. Those two measures alone, therefore, have a gross cost of €1.3 billion. Hopefully the net cost will be much less but, clearly, that has to be made up. The Taoiseach recently indicated in the House that it would be by way of adjustment to internal departmental votes, which indicates that it is all spending cuts rather than any other measures. Perhaps the Minister would comment on that.

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