Pearse Doherty (Donegal South West, Sinn Fein)

My point concerns section 1. The Minister made an interesting comment on the application and duration of the reduction in VAT, stating the reason the review is built in is that we may not be able to afford - I paraphrase - the decrease to the new VAT rate of 9% until the end of 2013. However, that was not what he led us to believe when he announced the jobs initiative in the House. At that time he led us to believe the review was to ensure the sector was benefiting from the new rate which would run until 2013. There was no issue then about the cost to the State of this reduction. I am very interested to hear why he now states - he may correct me if I am wrong - the reason the review is built in is that we may not be able to afford the reduction in the years ahead.

We are introducing a pension levy to come up with the money necessary to pay for the reduction. Therefore, I do not understand the basis of the Minister's comment. I understand the idea of interim reviews; I welcomed it. The idea of having a review to ensure the sector is benefiting from a reduction in VAT on specific, targeted, focused areas is welcome but the Minister has now led us to believe the reason for the review is that we may not be able to afford to continue this measure. That does not make sense to me given that we are to apply a 0.6% levy on pensions to fund the measure in the first place.

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