Timmy Dooley (Clare, Fianna Fail)

The Government is taking that tax and putting it into much more labour-intensive areas of the economy. Deputy Perry is very familiar with the retail sector. Retail Excellence Ireland paid a great deal of attention to what it was promised by Fine Gael and the Labour Party when they were in opposition. The parties in question suggested they had the capacity to address the issue of upward-only rent reviews in a retrospective manner. They fell flat on their faces in that regard when they came into office. We can leave that aside. Now that Fine Gael and the Labour Party are in government, they should listen to what Retail Excellence Ireland is saying about the dampening effect of the increase in oil prices on the spend in the retail sector. It is having a devastating impact. I ask the Minister of State to address that at the earliest opportunity. There is a potential gain here regardless of whether one accepts the Minister of State's point of view or that of the Minister for Finance.

I wish to refer to a study that was recently conducted by the FairFuel UK campaign, which has been highlighting the potential positive impact on the UK economy of a reduction in fuel duty there. The proposal works on the basis that a reduction of 2.5p in fuel duty would result in the creation of thousands of jobs within a year, without any fiscal loss to the UK Government. It has been estimated that such a reduction would lead to a GDP increase of approximately 0.32% in a year and a GDP increase of approximately 0.34% over five years. If an extrapolation of that analysis is applied to the measure we are proposing in this legislation, we estimate that our suggestion could lead to a potential increase of approximately 0.5% of this country's GDP. That would result in an additional gain to the State of approximately €750 million. The Minister for Finance has pointed out that the cost of this measure would be approximately €145 million, but the potential gain is approximately €750 million. I do not suggest that the entire €750 million would come all at once. It is certainly worth a gamble.

The Government took a similar gamble when it reduced the rate of VAT that applies to the tourism sector by 4%. By its own admission, and on the basis of all the figures coming from the various industry sources, that measure worked. I am prepared to accept that it worked. I ask the Government to introduce a similar measure in this sector. I believe the measure we are proposing is conservative. Many people in my party wanted me to propose a reduction of 20 cent or 30 cent because they felt it would be more meaningful. I did not believe such a proposal could be costed, or indeed borne by the State in the current climate. I believe we have an opportunity to reduce the level of excise that is charged on a litre of fuel by 5 cent. I believe that can be costed, based on the numbers we have made available and the analysis in the study that was carried out in our nearest neighbour.

See this speech in context