Michael McGrath (Cork South Central, Fianna Fail)

When news of the VAT increase leaked in the German Bundestag the Minister was quick to put out his analysis that it would have a greater impact on the better off. However, the distribution effects of VAT in Ireland were examined by the ESRI in a paper published as recently as July. The results were unambiguous.

They showed that those hardest hit by a VAT increase are households in the lowest 10% income bracket, households in rural areas and one-parent families.

The Minister said a few months ago that what we need is for people to start buying again. I would have expected Government policy to underpin that objective. The Government has instead done the opposite.

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