Enda Kenny (Mayo, Fine Gael)

-----related to his intention to bring a proposal before the Cabinet for a 2% increase in VAT as an alternative to increasing income tax, which would have a direct impact on jobs. That is a fundamental concern for the Government. The Minister for the Environment, Community and Local Government has pointed out that the income being gained from motor tax has decreased by 3.5%. He has said he intends to bring proposals to the Government. I can genuinely say the tax aspect of the budget has not yet been presented by the Minister for Finance. There has been speculation and comment on the matters mentioned by the Deputy when he spoke about the cumulative effect of the budget because people know they have to be considered. The overall position of the Government is that the deficit will be reduced to 8.6%. A balance will have to be struck between current cuts and tax measures. The Government has set out its stall in this regard. The list on either side is not very palatable. The Government has to make choices and it will do so. We will take account of the cumulative impact of our decisions on people in the harder-pressed sections of our society.

It would be lovely to say we have discovered a new pot that will deal with all of these problems, but we have not. Regardless of the crisis in the eurozone, which is of utmost concern to everybody, we have to sort out our problems here. We cannot do that without making political decisions. I assure the Deputy that the Cabinet has reflected long and is reflecting hard on the decisions that have to be made. Decisions must be made and will be made. Our people know this reality. As the Deputy is aware, a balance always has to be struck in a way that allows for growth to return to the economy, jobs to be created and work to be facilitated. We have to keep that balance. We have a fix on the need to deliver on the 8.6% commitment. It is unpalatable in the extreme to have to decide between increasing tax and cutting current expenditure. The Government will finalise its decisions in this regard in the coming days. I can confirm that the Minister for Finance has not yet brought his tax proposals to the Cabinet.

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