Billy Timmins (Wicklow, Fine Gael)
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The dramatic decrease in the level of consumer confidence is one of the issues we have been hearing about over recent months. It represents one of the reasons the Government finances are in such difficulty. I cannot understand why the Government has decided to increase VAT by 0.5%. The Minister gave little away in her speech, but €208 million is to be taken every year from an area that needs a boost. The budget should have included measures that assisted in increasing consumer confidence, but instead it has dampened such confidence.

Resolution No. 5 deals with the old reliable of tobacco. Some people claim that it might be the only pleasure that some people have, but I would still support it. There is also to be an 8 cent rise in the cost of a litre of petrol. I would love to know the full amount the Government takes in excise duty on petrol every year. Most of us must use a car as we do not have access to public transport. Prices have rocketed and the Government seems to have no control over them. The Competition Authority is not doing its job. The former Minister of State, Deputy Browne, spoke about the situation in Enniscorthy and claimed that the board of the authority meets once a week to collude to put prices up. Nothing is done to address this issue. I would like the Government to investigate the fuel price rises in recent years relative to the increase in the cost of a barrel of oil, and compare it to the decrease in fuel prices relative to the decrease in the cost of oil. There does not seem to be an inverse relationship between the two and it might do the consumer some good if we got that statistic.

Fine Gael will oppose resolution No. 4 and resolution No. 7. I have mixed views on the betting tax. Much of Charlie McCreevy's heritage is being destroyed this evening. Is the Minister concerned that this move will give rise to on-line betting?

Liz McManus (Wicklow, Labour)
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Deputy Timmins wondered how much money in excise duty on petrol is gathered up by the Government. The increase in petrol prices provides rich pickings for the Government. It obtains 55% of the cost of a litre of petrol, while 37% of the cost is due to refining the oil. It is outrageous that the Government can go back to the well and add to its take when it is already receiving such a substantial source of income from this area. Ministers do not seem to understand how difficult it is for commuters who do not have an alternative to using the car. The public transport infrastructure that should be there is something the Green Party Deputies keep talking about, but they have totally failed to make any difference if this budget is anything to go by. The people who depend on driving their private cars are already paying high petrol prices.

The Joint Committee on Climate Change and Energy Security has carefully examined why petrol prices do not seem to follow oil prices when they fall. They have come down to some extent, but the Government take is inordinately high. The cost of diesel has uniquely been higher than that of petrol, but rather than deal with that issue, the Government has simply decided to raise the price of petrol. That will cause difficulties for people who are trying to manage on incomes that are limited. When the significant increase in tax from this source was pointed out to the Taoiseach, he said they are not spending money on other things. However, it does raise the issue of fuel poverty. The most disappointing aspect to the budget is the fact that there is no recognition of the reality of fuel poverty. People are facing into winter with significantly increased costs in electricity and gas — there are more increases to come — and we get a derisory €2 increase in the fuel allowance. There is nothing else to support people who are struggling.

There is a reference in the section on climate change to the programme known as the home energy savings scheme. This is about insulation. We have argued strenuously for a national insulation programme that would provide energy efficiency across the board and would provide work for many construction workers. That would make sense at a time when we have such difficulties in construction and in meeting our climate change targets. There is a con trick in these figures. We were told in the budget speech that €15 million is going into this energy efficiency scheme, but then we discover in the appendices of the budget that €15 million is being taken out of the greener homes scheme. Windscale was changed to Sellafield, but the leopard never changed its spots. In this case, the Government is putting money into one scheme which is supposed to save energy and taking it away from another scheme which is supposed to save energy. It is a sham.

Pat Rabbitte (Dublin South West, Labour)
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I cannot believe the Green Party would go along with that.

Liz McManus (Wicklow, Labour)
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Not only have they gone along with that, but they have rolled over on the delivery of their agenda. It is pathetic. It is having a social impact, because people will not be able to afford to pay for fuel over the winter months, but neither is it dealing with the major environmental challenges posed by climate change. The only way we will see a significant change on climate change is to have legislation that pins the Government down, so that Ministers do not come in here with con tricks at budget time that leave people in the lurch in terms of fuel poverty.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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I usually welcome the opportunity to say something, but I do not think anybody can welcome the opportunity to say something about this budget. VAT has been increased by 0.5%, which may not look like that much, but it will have a negative effect in a declining market where shop owners are laying off workers. The 5.2% VAT return to farmers has not been re-examined. I am promised every year that this would be re-evaluated, but I do not see any sign of it at all. In light of the fact that farmers are being penalised in every way in this budget, in areas such as the farm retirement scheme, insulation aid and other structures, the VAT refund would have been a useful benefit.

As one who comes from a Border constituency, just like the Tánaiste, one of the benefits is that petrol prices have been somewhat lower in the South recently. This has encouraged shoppers and others to do business around the Border areas. That opportunity will quickly disappear because of this increase. It is sad this is being done by our Government. Many people from Cavan-Monaghan must go to work in Dublin. They will be further penalised. Jobs have not been created for them in their own constituency. I know the Tánaiste will announce a couple of hundred jobs next week. I hope that unlike decentralisation these jobs will come to fruition, but that is another day's work.

There is a major question over the structures of the petrol companies. The banks and the lack of leadership shown by them have been the talking point for the past few weeks, but there must be collusion in fixing the price of petrol and diesel. I acknowledge there is a small difference in the prices. I do not think price fixing is being organised at local level but rather by the companies. Many of the people at the petrol pumps have gone out of business in recent years. They are not the ones making a fortune but the big companies certainly are. I ask that this be investigated.

I have no major problem with the resolution on the price of tobacco and wine, considering the health implications of tobacco and the increased consumption of wine at home.

County Monaghan certainly will not get any decentralisation and the barracks are to be closed. For those people in the barracks the price of petrol or diesel will not be an issue. The closure is an absolute scandal.

Seán Sherlock (Cork East, Labour)
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On the price of tobacco, the Labour Party will support the measure on the basis that it will act as a deterrent. However, in an effort to curb tobacco consumption, we should encourage people to use substitute products and allow those products to be free of VAT. Products such as Nicorette should be delisted — as currently they can only be sold in pharmacies — and allowed to be sold in supermarkets and to a wider range of people. I called for such a measure in the previous budget. I suspect one of the things at play here is that the Irish Pharmaceutical Union is firmly in control of that issue. I take the measure at face value if it is a question of equity but it should be considered in a wider context if it is considered as a health measure.

If I were an average Fianna Fáil voter, a male, who liked to back a horse, maybe enjoyed a glass of wine——

Billy Timmins (Wicklow, Fine Gael)
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And had bought a new house just last week.

Seán Sherlock (Cork East, Labour)
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——and drove a petrol car——

Willie O'Dea (Limerick East, Fianna Fail)
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With an extra mortgage rate.

Seán Sherlock (Cork East, Labour)
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——and I was a lower or middle income earner, I would be apoplectic when studying this budget. Many people who fit that demographic voted for Fianna Fáil in the last election and now they will think seriously about how they will vote the next time. I am also pleased that the Government did not put any VAT on children's clothes or footwear because, by God, if it did, we would definitely be going back to the 1980s.

Paul Kehoe (Wexford, Fine Gael)
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I assure Deputy Sherlock one would not have to be a Fianna Fáil voter to be disappointed with this budget. People are very disappointed because the most vulnerable in society have again been hit. I am annoyed with the proposals for VAT, cigarettes and petrol. The Minister went for the soft target with regard to VAT as it will hit a wide range of areas and many middle-income earners will be affected. The poor and the vulnerable will also be affected. The Ministers were thinking of their own comfort zone when this budget was being considered at Cabinet. They do not have to go to the petrol pump and fill up the car because they have ministerial cars. The Government is completely at sea. I refer to the 8 cent per litre increase on petrol against a backdrop of rising prices for petrol. I am surprised the Minister did not hit diesel prices as well. The Government has not considered areas which would provide more money for the Exchequer. The price of cigarettes will be increased by 50 cent and this is a health consideration and the price of a bottle of wine will be increased by 50 cent. I ask the Tánaiste to say what action the Government has taken in recent years to curb under age drinking. It has done nothing. Will an extra 50 cent on cigarettes stop the teenager from smoking? I do not think so. The same number of teenagers will smoke tomorrow as did today.

Arthur Morgan (Louth, Sinn Fein)
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The Minister for Finance claimed that he is trying to build this economy and yet he introduced a VAT rate of 21.5%. Aside altogether from low income and working families and the nature of the impact of this increase on that category of people — goodness knows, they are very hard hit in today's budget — the small business sector will be affected and it is already crucified with steep charges. I see no encouragement for small business in these proposals and this is a regressive measure. It is the wrong direction to take; the Government should have made a reduction in VAT to 20% or less rather than adding to that scourge of both the small business sector and low income families. I note the resolution proposes that it shall take effect as and from 1 December 2008, so we do not even get Christmas out of it. This is a case of bad Santa. This is a regressive move which is most unfortunate.

The additional cost of fuel and petrol is regressive. It is an attack on workers who have no public transport because, by and large, public transport was neglected by this Government for all of these years. Yet people are supposed to put their hands in their pockets and pay this additional cost.

I note the Green influence in the Government is negated with the additional parking fees at Iarnród Éireann stations. One is ripped off as soon as one goes in the gate to avail of fairly shoddy public transport. The Government is having another go. Somebody on that side of the House should say this is crazy. I agree with Deputy Seymour Crawford's point about the significant custom given to Border petrol stations by people from the other side of the Border. With the introduction of this measure, the days of lengthy queues at petrol stations in Border counties will be well and truly finished. This is most unfortunate. It will penalise people trying to travel to work who must drive because public transport is inadequate.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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The increase in the standard rate of VAT from 21% to 21.5% will be punitive for a significant swathe of people who will find it increasingly difficult to afford the additional outlay they will be obliged to make in respect of consumables and their household needs. This will not merely have the effect of discouraging further spending by people who come within the remit of the Exchequer. Deputies Morgan and Crawford referred to the increase in the excise duty on petrol and while there has been a steady rise in sales at filling stations in this jurisdiction in recent years as a result of the differential between the price in the North and that which obtains in the South, the reality is that a significant number of people who live in counties immediately on this side of the Border now do their shopping in the North. This is a fact of life.

An increase in VAT will encourage people from Donegal, Sligo, Leitrim, Cavan, Monaghan and Louth who shop in the Six Counties to continue doing so. This increase is an incentive for those individuals to leave their local areas and travel north of the Border. It is proposed in Financial Resolution No. 7 to increase the excise duty on petrol by 8 cent per litre, which will act as a disincentive for traffic from the Six Counties to travel south. This will prove to be a double whammy to local economies in Border counties from Donegal to Louth.

I am deeply concerned with regard to the effect the propositions in Financial Resolutions Nos. 4 and 7 will have. The consequences will be extremely severe. Financial Resolution No. 7 is unquestionably a tax on those who need to use their cars to travel to work. There is no public transport infrastructure whatsoever in the Border counties and the overwhelming majority of people who live there need their cars in order to travel to work. An 8 cent increase in the price of a litre of petrol and a 4% increase in motor tax — dealt with in a later financial resolution — on all cars with engines below 2.5 litres will prove extremely punitive. Ordinary people will find it not just difficult, but impossible to cope. Financial Resolution No. 7 is a disincentive to work.

The collective weight of all these measures will undoubtedly lead people to face the financial reality that, in light of the budget, they would be better off out of work rather than trying to maintain and sustain their families by remaining in employment. I strongly oppose both financial resolutions.

Brendan Howlin (Wexford, Labour)
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There are 11 listed speakers and less than 30 minutes remaining for the debate on this group of resolutions. I wish to allow the Tánaiste some time to reply. If Members are not mindful of the time, it is likely that the names of those towards the end of the list will not have an opportunity to contribute.

Bernard Durkan (Kildare North, Fine Gael)
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Any increase in VAT will have a negative impact on business at a time when the latter can ill afford it. Business has come through an extremely difficult time during the past 12 months, particularly in the context of increased oil prices, transport costs, etc. To pile on something of this nature, which will impact on both consumers and those in the business sector, at this stage is hugely negative. This is not a wise decision and I do not know why it was made. It was indicated that the increase will lead to the accrual of €227 million in a full year. That is a considerable sum. When consumers realise the import of what is proposed, the Government will subjected to a reaction that will bear little resemblance to what it received from its backbenchers following the Minister for Finance's Budget Statement.

I am a smoker and I must declare an interest in Financial Resolution No. 5. Everyone welcomes the increase in the excise on tobacco. However, I wish to highlight a matter to which previous speakers did not refer, namely, the old age pensioners who smoke and who received a miserable 3% increase as a result of the budget. These people will lose that increase in its entirety when they buy one packet of cigarettes. Elderly people like their comforts. I accept that smoking may be a bad habit but it is a habit nonetheless. I cannot understand what they have done wrong that they should be punished in this way. Those on the Government benches will feel self-righteous about this matter but they should try to see the other side. It will not be a laughing matter for those who will be directly impacted upon by this particular exercise. The same applies, but not to the same extent, with regard to the increase in the duty on wine.

The increase in the duty on mineral oils will bring in an additional €166 million in 2009. That amount will increase thereafter. Two issues arise in this regard. First, unfortunate motorists are being treated as if there were an alternative mode of transport available to them

Kathleen Lynch (Cork North Central, Labour)
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There is an alternative, namely, the horse.

Bernard Durkan (Kildare North, Fine Gael)
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There is no such alternative available. Pretending that there is by providing a grant in respect of bicycles — a proposal with which they Green Party came up — will prove cold comfort for motorists. I hope the bicycles in question will all have saddles——

Billy Timmins (Wicklow, Fine Gael)
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The Tánaiste's bike will not be safe.

Bernard Durkan (Kildare North, Fine Gael)
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——or people will be even more uncomfortable.

No group in society has been hammered more often during the past two to three years than motorists.

Kathleen Lynch (Cork North Central, Labour)
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Cars are only a luxury.

Bernard Durkan (Kildare North, Fine Gael)
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They are not a luxury. They are being treated that way but they are a necessity. People who use their cars to travel to work and to drop their children to school or college will be hit hard by this provision.

During the past couple of years, the price of diesel has been higher than that of petrol. In a cunning way, the Government has decided to impose an increase in the duty on petrol because it is of the view that this will also drive up the price of diesel. I cannot see what will stop the latter from happening. The price of diesel has been greater than that of petrol for the past two or three years. Does this increase mean that the prices will be brought level or will there be an automatic increase in the price of diesel? Those in the transport sector and everyone else will be hammered if there are parallel increases in the price of both fuels. The Tánaiste knows that will be the case.

Pat Rabbitte (Dublin South West, Labour)
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The Minister for Finance has taken the baton from his predecessor, the Taoiseach, Deputy Cowen, and crashed straight into a wall. The more I consider the macro figures, the more I understand why Ministers were whey-faced on their way in and out of Government Buildings during the past three weeks. The position is disastrous. The Government had a choice involving making expenditure cuts, doing something with the borrowing requirement and introducing tax increases. In my opinion, it got the balance wrong and has chosen to raise taxation at every hand's turn by means of direct tax increases, levies, charges or whatever. When the entire thrust of VAT is towards uniformity, I do not know how the Government can justify increasing the rate of VAT to 21.5%. This move is almost impossible to defend.

Deputy McManus reminded people on the opposite side of the House how expensive it has become to live in this country. Most Members on the Government benches cannot remember when they last filled their cars with petrol on a filling station forecourt.

Mary Coughlan (Donegal South West, Fianna Fail)
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I filled mine with diesel last weekend. We all drive.

Pat Rabbitte (Dublin South West, Labour)
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It is beyond belief when one considers that 8 cent will be added to the price of a litre of petrol. The price of oil is falling at present, partly as a result of the financial turmoil. However, there has not been a commensurate decrease in the price charged for petrol and diesel at filling stations. The Government is now going to drive the price up again by imposing this 8 cent increase. People need their cars to travel to work or to bring their children to their places of education. As Deputy Durkan stated, these people have no alternative and yet the Government is piling on increases willy-nilly.

The Government is going to tip the economy over altogether. For months it denied that the economy was in recession. As the Tánaiste knows, we are now in recession and the Government will tip us over into a depression with the amount of money it is taking out of the economy through the options taken in this budget.

Will the Tánaiste tell us the cumulative effect on the consumer price index of the group of resolutions before us? What do they cost and what will they add to the CPI? Will the Tánaiste explain how the betting tax will be collected and whether it is simply a doubling of the existing 1% charge?

The tobacco and alcohol levies will make a significant enough contribution to the CPI but it would be hard to oppose those measures for arguments that are well known. Representatives of the Irish Cancer Society were in the House recently and several of the Tánaiste's colleagues met them. The representatives argued for a steeper increase in the tax on cigarettes. I am very doubtful about the argument that was advanced to them about such a measure enhancing smuggling in the Republic.

Kathleen Lynch (Cork North Central, Labour)
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The budget hits a particular group of people who can ill afford to be hit with the type of increases the Government proposes. The charge that will affect virtually everybody is the increase in VAT. That increase, as well as the increase in the tax on petrol, suggests that petrol is a luxury item and that VAT is only applied to luxury goods, but that is not the case. VAT is levied on clothing, footwear and many other everyday items and the increase will hit everyone.

The combination of increases proposed here, namely the 8 cent increase on a litre of petrol, the increase in VAT and the €200 charge for a parking space, which is not in front of us now but which will be introduced and which will affect those who, for example, work in factories and are provided with car parking spaces, are harsh. Taxes are being imposed on people on very limited incomes and they will only realise it next year.

A total of €227 million will be raised by the Government through the increase in VAT, which is quite a significant sum. The 1% levy on income is probably the one provision which none of us in Opposition can understand. Had the Minister for Finance said that a 2% levy would be imposed on those earning above a certain threshold, that would be fine.

Brendan Howlin (Wexford, Labour)
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I ask the Deputy to deal with the financial resolutions that are currently before the House.

Kathleen Lynch (Cork North Central, Labour)
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However, the 1% levy will be applied to everyone's income, even those on minimal incomes, which is outrageous.

The increases in VAT and petrol tax will bring in significant income for the Government but we are not sure what will happen to that income. The implication of these increases is that they apply to luxury goods, which defies reason. An increase in VAT at a time when people's incomes are being reduced is illogical. An increase in the price of petrol when we do not have an adequate public transport system is difficult to understand. When the full implications of this budget start to sink in, the average earner or the person who is unemployed and looking for work will be very annoyed.

Ruairi Quinn (Dublin South East, Labour)
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I gather from these resolutions that the Government has effectively abandoned any prospect of getting a pay agreement through the social partnership process. This resolution is levelling an inflationary, regressive tax on the backs of increasingly overburdened working people. In that context, I must assume that is the Government's position on the pay agreement.

On the basis of the figures supplied and subject to correction by officials, I calculate that we are looking at a 0.77% increase in the rate of inflation. There is no figure given for the betting tax, but most of the figures relating to betting are works of elaborate fiction anyway. It appears that the Government is determined to go down a regressive road. The thinking behind this budget, as manifest in this resolution, indicates that the Government has failed the test. This will not correct the main problem that we have, namely, the structural gap between revenue and expenditure. The Government's temporary 10% cut in salary is simply a sop, with no reference made to the postponed pay increase vis-À-vis pensions and salaries.

The Government is dealing a major blow to the tourism industry by increasing costs. That will affect the west in particular, which has become highly uncompetitive as a tourism destination.

I ask the Tánaiste what the critical threshold was with regard to increasing the tax on tobacco. The increase proposed is actually quite small. With regard to smuggling and the criminality associated with it, I was given to understand that the Garda has had a handle on that for some time now and that the kind of smuggling that occurred eight or ten years ago has been dealt with. Would the Tánaiste agree that the Government could have imposed a higher levy on cigarettes, given the extra resources and experience of the Garda in this area?

While this is not directly relevant to the resolutions before us, I ask the Tánaiste to clarify an issue for the House. I presume the €200 per year charge for a car parking slot will apply to these premises and to the entire Civil Service. Will that mean that we will all have a designated car parking space?

Pádraic McCormack (Galway West, Fine Gael)
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It appears that not much thought went into the preparation of this budget. The Government has taken the easy options, particularly in resolution No. 4 which increases VAT. I will confine my remarks to resolution No.7, which imposes an 8 cent levy on a litre of petrol.

Deputy Timmins asked how much of the price of a litre of petrol is tax and he was kindly answered by his constituency colleague. Can the Tánaiste confirm that the figures cited are correct, namely that 55% of the price of every litre of petrol is tax? The proposal in resolution No.7 is anti-rural. Many of those who work in Galway city, for example, come from areas in Connemara including Clifden, Carraroe, Lettermullen and so forth. They work in factories, hospitals, the health service, the local authority and so forth and will be penalised for using their cars to get to work. Many travel between 30 and 50 miles per day and soon they will not be able to afford to travel to work. It will be better for them to stay at home and go on the dole or engage in farming rather than travel to work in Galway city. The €200 charge for a parking space will affect many of the same people. Will those working in factories, for local authorities or in the health services be charged for parking? Will the HSE be obliged to charge €200 to all of the people who crowd out the car park of the University College Hospital every day? I ask the Tánaiste to clarify these matters in her response to our concerns about the 8 cent increase in the price of a litre of petrol. That increase will make it almost uneconomical for people who travel long distances to work to continue to do so. This is particularly true in my constituency of Galway West where many of those who work in the city live up to 50 miles outside it. Such people are being crucified.

Charles Flanagan (Laois-Offaly, Fine Gael)
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With regard to the VAT increase, the motions before us and the previous motions, there is no doubt that this is a turning point for Fianna Fáil. This is the day the Charvet shirt has been replaced by the hairshirt.

Bernard Durkan (Kildare North, Fine Gael)
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Nettles.

Charles Flanagan (Laois-Offaly, Fine Gael)
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I find it extraordinary that we should have such a blunt instrument in increasing VAT across the board in the manner proposed on the basis that this will add to inflation in 2009. Is this factored into the Government's computations? It is unfortunate that the Celtic tiger years did not treat the taxpayer or hard-pressed families any more favourably than to see VAT stay in its current form for the past number of years. The highest it has ever been in the history of the State was 23%. During the past number of years we heard from the Government benches about the success, the celebrations and the corking of the champagne bottles. Now, VAT is on the rise again after a long number of years. It is particularly regrettable that goods and services which are so important for families will be hit in this way.

The 8 cent increase in the price of a litre of petrol will have serious consequences, particularly for people commuting to Dublin. People in my constituency bought into the developer's dream of moving down the country to purchase an affordable house while holding on to their jobs in Dublin. These people will now fork out €100 per tank of petrol to get them to work or college. Their houses on the outskirts of every town and village within a couple hours of Dublin are in negative equity, their jobs are on the line and the response of the Government is to burden them with further increases, in particular a cost on commuting to work.

They have no choice given the absence of an alternative quality public transport. The trains which pass up and down through my constituency are invariably late, overcrowded and utterly unreliable. People have been forced back into their cars and are now faced with car parking charges, be they parking at the station at home or in Dublin. The applause given to the Minister for Finance, Deputy Brian Lenihan, by his colleagues on the Fianna Fáil benches, the Green Party and the remaining Progressive Democrat will come back to haunt them in the not too distant future.

Ciarán Lynch (Cork South Central, Labour)
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What we are witnessing here is the type of economics written on the back of a cigarette box. We saw it earlier with the calculations of the Minister for Education and Science, Deputy Batt O'Keeffe, on the reintroduction of third level fees. We see it here again this evening with calculations made on a crisis-driven basis rather than with a strategic approach, particularly one to get the country out of the situation the Government to which has brought us.

I will refer to the matters in hand, particularly the increase of VAT to 21.5 % and the 8 cent increase in the price of a litre of petrol. This is a double whammy because the cost of petrol has increased and the increase of VAT to 21.5% is, in itself, an additional increase. The Government is hoodwinking the public because they are not being hit with an 8 cent increase, but an 8 cent increase with an increase in VAT to 21.5% on top of it.

What should have happened — let me make this clear because it has been a matter of record for some time — is that prior to the Government altering the VAT bands, it should have examined what is included in them. I will give an example of an item which has increased in price, and prices are an extremely relevant issue for those who might be termed "Mr. and Mrs 1%" on the minimum wage who are affected by the budget. Their cost of living has not only increased by 1% with the levy, but also by 0.5% in VAT. This is a 1.5% automatic increase in the cost of living for people on the minimum wage as a result of the budget.

A car owner with a child is legally required to place a safety seat in the car. The VAT on this item has increased to 21.5%. It should not be at the top rate of VAT. In fact, it should not be subject to VAT at all because it is a legal requirement for a parent to have it in the car.

Brendan Howlin (Wexford, Labour)
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I am anxious to allow another Deputy to speak.

Ciarán Lynch (Cork South Central, Labour)
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I have a final point. The community and voluntary sectors, which cannot claim back VAT, buy photocopying machines and equipment. They will find their costs have increased as a result of this measure. There was no examination of the VAT system; it was slapped on. This is the back of a cigarette box economics and hence the cost of living has increased for community groups and those on the minimum wage.

Tom Hayes (Tipperary South, Fine Gael)
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To say the least, this budget contains draconian measures. The worst is the decision with regard to the medical cards for the over 70s which is unfair to the people concerned. Another measure I consider harsh is the increase in third level registration fees. To introduce such a large increase while we are conducting a review of the cost of third level education is a slap in the face to every parent and young child in the country.

With regard to this resolution, I require clarification from the Minister on the changes made with regard to low level alcohol beer and cider, particularly with regard to cider as it affects my constituency. We have a good story from the cider industry in Tipperary. We have major investment in a modern plant which, for various reasons, has been under extreme pressure to make profits for the past number of years.

Emmet Stagg (Kildare North, Labour)
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I wish to comment briefly on resolution No. 5 as a contributor to the €105 million which the Government will collect from the tobacco industry and from smokers directly. This is not a health measure. This is a direct revenue raising measure.

Ruairi Quinn (Dublin South East, Labour)
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Hear, hear.

Emmet Stagg (Kildare North, Labour)
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Last year, the Government had the nonsense of increasing the cost of a packet of 20 cigarettes by 30 cent to save us all from ourselves. However, the Government also stated it intended to take €63 million extra out of our pockets for it. When I stated this last year there were headlines that "Stagg proposes a €3 increase on packet of cigarettes". If the Government was serious about applying this as a health measure, then the increase would be much greater. Let us see this for what it is. The increase represents what the traffic can bear and what will maximise the take for the Government. It will bring in €105 million in one year.

With regard to resolution No. 8, as Deputy Charles Flanagan stated, the Government's plans forced people out of Dublin——

Michael D Higgins (Galway West, Labour)
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That is right.

Emmet Stagg (Kildare North, Labour)
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—— into the suburbs and then to Kildare, Laois, Westmeath and other areas. It forced them there because it would not control land prices. The price of housing was allowed to increase while planning was encouraged in these areas. The Government party in particular was active in this regard. Now, it will penalise them for travelling and they do not have public transport as an alternative.

In my constituency, there is inadequate public transport to get to and from Dublin. The Government has not done the work on the roads and when one gets near Dublin, the traffic stops. One uses up what will be very expensive petrol in the traffic jams. It will cost commuters coming to Dublin to work approximately €5 per fill, and one needs to fill twice per week to come from where I do in north Kildare. This green envy tax will now affect those commuters coming into Dublin. Out of pure envy and spite, the Green Party could not let it go and wants €200 from everyone who can park for free near their place of work. This is nothing other than Green Party envy and should be labelled as such.

Mary Coughlan (Donegal South West, Fianna Fail)
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Betting tax is currently 1%, collection of which falls on the bookmaker. That will remain the case when it increases to 2%. Deputy Pat Rabbitte asked about the amalgam on the effect of the consumer price index. It is 0.7% but the overall budgetary framework is 0.6%, which is on the basis of a projection of inflation of 2.5% next year. This also includes mortgages.

The reduced excise duty of 50% for low alcohol beer and cider, for beverages with a volume of 2.8%, is to encourage people to move to these products. This is what the industry wanted and I am sure it will be accepted.

Charles Flanagan (Laois-Offaly, Fine Gael)
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They will be drinking cider instead of champagne on the other side of the House.

Mary Coughlan (Donegal South West, Fianna Fail)
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It will work both ways.

Willie O'Dea (Limerick East, Fianna Fail)
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I gave up the drink.

Billy Timmins (Wicklow, Fine Gael)
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Will the Minister, Deputy O'Dea, be cycling the back-streets of Limerick?

Mary Coughlan (Donegal South West, Fianna Fail)
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Between cycling, no smoking and a reduction in alcohol consumption, we will be the healthiest people and, as a consequence, reduce our expenditure in the health sector.

Pat Breen (Clare, Fine Gael)
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That is a very healthy argument.

Brendan Howlin (Wexford, Labour)
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Please allow the Tánaiste to conclude as we have very little time.

Willie O'Dea (Limerick East, Fianna Fail)
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I do not need to cycle.

Mary Coughlan (Donegal South West, Fianna Fail)
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Choices had to be made. There has been a deafening silence on the other side of the House. They do not want any measure that will create revenue but, at the same time, not one of them has said they want to reduce expenditure or want more borrowing.

Deputies:

Yes we have for the past ten years.

Charles Flanagan (Laois-Offaly, Fine Gael)
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That does not wash.

Pádraic McCormack (Galway West, Fine Gael)
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That is not the point.

Brendan Howlin (Wexford, Labour)
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The Tánaiste without interruption.

Mary Coughlan (Donegal South West, Fianna Fail)
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What services do they want reduced? What further cuts do they want outside of today's budget?

Emmet Stagg (Kildare North, Labour)
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That is not true.

Mary Coughlan (Donegal South West, Fianna Fail)
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Regarding the increase in VAT, compared to other EU member states, Ireland applies a considerably lower VAT rate to an extensive range of goods and services. I indicated earlier the goods and services on which this will impact. It is a matter for revenue creation. I do not necessarily agree it will reduce consumer confidence or be a reason for people not to purchase certain items and goods. Its impact will not be as large as some Members have suggested. Basic and important items have not been touched by this increase.

Ruairi Quinn (Dublin South East, Labour)
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Yes, they are being touched. It is the standard VAT rate.

Simon Coveney (Cork South Central, Fine Gael)
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It is fuelling inflation.

Mary Coughlan (Donegal South West, Fianna Fail)
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It will not affect food and children's clothes.

Willie O'Dea (Limerick East, Fianna Fail)
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It is only a 50 cent increase on every €100.

Mary Coughlan (Donegal South West, Fianna Fail)
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Yes, it only comes to 50 cent for every €100.

Emmet Stagg (Kildare North, Labour)
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Pass her another note to guide her.

Pádraic McCormack (Galway West, Fine Gael)
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Ask Ger Loughnane how this will affect the price of hurleys.

Mary Coughlan (Donegal South West, Fianna Fail)
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Many of the Border Deputies raised the increase in the price of petrol.

Ruairi Quinn (Dublin South East, Labour)
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She is back on automatic pilot. She cannot do this on her own.

Mary Coughlan (Donegal South West, Fianna Fail)
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I am aware of that issue. However, when cross-Border petrol prices are compared, there will still be a difference of 18 cent. That figure is based on stability in the foreign exchange rates.

Several Members pointed out that when there is a reduction in fuel prices, it is not seen at the pumps. I agree this is an issue of grave concern to us all, particularly as consumers.

Emmet Stagg (Kildare North, Labour)
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The Minister is supposed to be in charge of that.

Liz McManus (Wicklow, Labour)
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The Government is the main cause of this problem.

Mary Coughlan (Donegal South West, Fianna Fail)
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It is on the basis of that——

Kathleen Lynch (Cork North Central, Labour)
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We need another regulator.

Mary Coughlan (Donegal South West, Fianna Fail)
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We do not need any more regulators; we have enough of them.

Kathleen Lynch (Cork North Central, Labour)
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We do not have enough regulators in certain areas.

Simon Coveney (Cork South Central, Fine Gael)
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We need to change the regulators.

Mary Coughlan (Donegal South West, Fianna Fail)
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We are reducing regulation and the number of regulators. We have enough regulators. I have asked the National Consumer Agency to undertake an investigation——

Michael D Higgins (Galway West, Labour)
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Yet another study.

Emmet Stagg (Kildare North, Labour)
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Another survey.

Mary Coughlan (Donegal South West, Fianna Fail)
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——into this issue and to deal with it as expeditiously as possible.

Michael D Higgins (Galway West, Labour)
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The Minister should not forget the car parks.

Mary Coughlan (Donegal South West, Fianna Fail)
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Regarding fuel poverty, the increase will not impact on home heating oil.

Kathleen Lynch (Cork North Central, Labour)
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The increase in VAT will impact on it.

Mary Coughlan (Donegal South West, Fianna Fail)
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It just deals with petrol.

The tax on car parking is for the facility of car parking in large urban areas, taking cognisance of the fact that in other areas where there is no public transport, this issue will not arise.

Ruairi Quinn (Dublin South East, Labour)
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Who will decide that?

Mary Coughlan (Donegal South West, Fianna Fail)
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That has been set down by the Department. A Member of this House or a person who has that facility can give it back and not pay the €200 tax.

Michael D Higgins (Galway West, Labour)
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That is great. We can all cycle to the bus.

Emmet Stagg (Kildare North, Labour)
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We will all be travelling by green bicycle from now on.

Mary Coughlan (Donegal South West, Fianna Fail)
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There is nothing to stop any Member of the House following the proposed cut in ministerial salaries.

Mary Coughlan (Donegal South West, Fianna Fail)
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I move the following Financial Resolutions: