Michael McGrath (Cork South Central, Fianna Fail)

I am pleased to have an opportunity to make a contribution to the Second Stage debate on this Bill. I commend our transport spokesperson, Deputy Timmy Dooley, on producing it. Very often, the Members of this House are accused of discussing issues that are not relevant to what is occurring outside. Both the Minister of State, Deputy Perry, and the Leas-Cheann Comhairle know the cost of fuel is being discussed by every family in the country.

The primary purpose of this Bill is to offer some relief to motorists. The Bill, as Deputy Dooley outlined, is a modest measure, but it would be helpful. The cost of fuel represents a crisis and it is having a tangible impact on people's lives. In this regard, I fully agree with Deputy Kelleher's statement on the choices people must make. Many people have to commute 20 to 40 miles to work every day. The fuel cost incurred by them on return journeys five or six days per week is crippling. It is affecting every element of their household budgets and every spending decision they make. The price of fuel makes an enormous difference to them.

Consider the Government's strategy to encourage people to holiday at home, which we support. If a family is considering the options of taking a cheap flight abroad to spend a week in France, Spain or elsewhere and touring around Ireland, it must consider the cost of fuel here. The Government is advocating policies that are clearly inconsistent and incompatible with one another. On a micro-economic level, day-to-day trips that people must make to see parents who live 30 or 40 miles away, friends or people in hospital and voluntary trips to support soccer, hurling and rugby teams are all affected by the price of fuel. Nobody can deny this. The price is having a real impact on the lives of the people and a depressing effect on the wider economy.

This is a modest stimulus proposal. It is true, as Deputy Dooley stated, that Fianna Fáil in government increased taxation on fuel on a number of occasions since 2008. The current Government speakers will put this on the record over the course of this debate but none of those taxation measures brought the costs to €1.70 per litre of petrol and €1.60 per litre of diesel. We have now reached a tipping point that is affecting not only individual consumers and those involved in commercial transport but also the wider economy. The figures I have quoted are not outliers; they are confirmed as average by the website www.pumps.ie, the advocacy website, which states the average cost of petrol is now €1.69 per litre and the average cost of diesel is €1.59 per litre.

As Mr. Conor Faughnan of the AA has pointed out, there are three key drivers to the price of fuel that people pay at the forecourt. The first is the exchange rate. As we know, the euro has weakened recently. The second is the cost of crude oil and the third is Government-imposed taxes. It is disingenuous of the Minister, Deputy Noonan, or any other Minister to state the Government does not have an influence on the cost of fuel. People know this to be false because the reality is that approximately 54% of the cost of a litre of petrol at the pumps goes into the State coffers. There are three elements: excise duty; carbon tax; and VAT.

Deputy Kelleher referred to a statement made by the former leader of the Opposition, now the Taoiseach, in June 2008. He made a song and dance about the cost of fuel at the time and stated it was a battering ram against hard-pressed consumers. This was at a time when the cost of petrol was €1.30. It is now €1.70. If the Taoiseach believed it was a battering ram against hard-pressed consumers then, what does he believe it is now? I would like him to come into this House and tell Members what he believes the impact to be.

I want to anticipate what I believe will be the main criticism of this Bill by members on the Government side; they will ask how it would be funded. Deputy Dooley referred to this issue. The growth cost in terms of revenue forgone is calculated by the Department of Finance at approximately €145 million. We believe the net impact on the Exchequer of this measure will be minimal. In support of that, let me quote the statement by the Minister for Finance in the Dáil last week. A colleague of the Minister, Deputy Stanton, tabled a parliamentary question on hauliers and what is being done to alleviate some of their problems, and I took up the issue of ordinary consumers. The Minister denied there is any windfall for the State in net terms from the high cost of fuel. In response to my question, he stated:

What happens is that people who have to use their car to get to work will make savings elsewhere. In other words, they are spending more on fuel and less on something else. While the Exchequer takes an additional amount on VAT from fuel, it loses VAT on other parts of the spending profile.

That is the point. If the Minister accuses Fianna Fáil of dreaming today, he must have been dreaming last week. What we are proposing espouses exactly the same logic outlined by the Minister in this House last week, namely, that if one frees up some of the money being spent by consumers on fuel and allows them to spend it in other sectors of the economy - more productive sectors that are labour-intensive and sectors such as the retail and tourism sectors - there will be a better return. That is what we propose. In no way can anybody suggest this measure will cost the State €145 million. That is rubbish. Would it not be great if the people had a few more bob in their pockets to spend in the shops, go out for a meal with their families or take a trip over the weekend? That would benefit the wider economy and that is what Fianna Fáil proposes in its Bill.

When the Government signed up to the new deal in respect of the 2012 promissory note payment, it incurred an extra €90 million in interest for 2012. Therefore, I asked the Minister last week where he would get the €90 million. The answer was that, in the grand scheme of things, the matter would resolve itself and the €90 million would fall into the overall picture in the public finances. There is no way that the net cost of what we are proposing is anything like €90 million. Therefore, I reject the flippant manner in which the Government has rubbished the proposal of Fianna Fáil. We are making very sensible proposals in respect of the public finances.

This measure will have an impact on consumer confidence. If the logic of the Government were extended and the cost of a barrel of crude oil returned to the level in 2008, at which time it was at a record $148, the price of petrol at the pumps would rise to €2 per litre. Is there any point at which the Government will say enough is enough and that the State should not be benefiting from the crucifying price being charged at the petrol pumps? The logic of what the Government is saying is that it will not intervene at any point.

Deputy Dooley outlined the contribution of motorists to the Exchequer, which is enormous every year. The Minister of State, Deputy Perry, will no doubt refer in his reply to an agreement that Fianna Fáil signed up to in Europe not to revisit in a temporary way taxes on fuel because of any spike in the international price of oil. One reason the European Union is so unpopular is that it is not prepared to respond to the needs of its citizens. With the price of fuel as it is today, there is an obvious need not only for this Administration but also for other countries in Europe to respond with imaginative measures and a flexible tool such as the taxation system. As we all know, all it takes is a decision of this House to reduce the excise duty on fuel, which decision would take effect at midnight on the night of the decision. There are no administrative barriers to my proposal, therefore.

I am sure other colleagues will deal with the issues that affect hauliers and commercial motorists. Those issues are very serious, so much so that we did not want to involve them in this Bill. However, hauliers and commercial motorists will benefit if this Bill is accepted. While they can claim back VAT, they cannot claim back excise duty on fuel. A 4 cent reduction on the excise element would be of huge benefit to anyone involved in transporting goods throughout the country commercially.

We ask the Minister of State to take a second look at this measure, which we believe is proportionate, modest and sensible. Its net impact on the Exchequer is minimal. We know from looking at the EUROSTAT figures yesterday that we are heading towards a deficit of no more than 8.2% in 2012. Therefore, there is headroom for the Government to do as proposed. It is a matter for Government to set the priorities within the overall budgetary parameters and the scope is there to do so. If the Minister believes it is enough of a priority, he has the power to it and we urge him to do so.

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