Dáil debates

Tuesday, 6 December 2011

Financial Resolution No. 1: (Tobacco Products Tax)

 

7:00 pm

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I move:

(1) THAT for the purposes of the tax charged by virtue of section 72 of the Finance Act 2005 (No. 5 of 2005), that Act be amended, with effect as on and from 7 December 2011, by substituting the following for Schedule 2 to that Act (as amended by section 16 of the Finance Act 2009 (No. 12 of 2009)):

"SCHEDULE 2

Rates of Tobacco Products Tax (With effect as on and from 7 December 2011)

Description of ProductRate of Tax
Cigarettes .... .... .... .... ....€192.44 per thousand together with an amount equal to 18.03 per cent of the price at which the cigarettes are sold by retail
Cigars .... .... .... .... ....€271.337 per kilogram
Fine-cut tobacco for the rolling of cigarettes .... .... .... .... ....€228.968 per kilogram
Other smoking tobacco .... .... .... .... ....€188.243 per kilogram

".

(2) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

This resolution provides for excise duty increases on tobacco products with effect from midnight tonight. The increase amounts to 25 cent, inclusive of 21% VAT, on a pack of 20 cigarettes with pro rata increases on other tobacco products. The price of a pack of 20 cigarettes in the most popular price category will increase to €8.90. The excise duty component of this price will be €5.45 and the total tax, inclusive of current VAT, will be €7.00. An additional impact will arise from the VAT increase on 1 January.

Ireland has the dearest cigarettes in the EU, which reflects the long-standing commitment by successive Governments to using taxation as an instrument to discourage consumption. This latest increase will ensure that tobacco tax continues to play that important role. Unfortunately, the high prices and taxes also make Ireland an attractive location for cigarette smugglers. The Revenue Commissioners are involved in a major programme of enforcement action against the illicit trade and have achieved notable successes in seizing illegal products and in bringing people involved in this criminality before the courts. This intensive work will continue and will have to look in particular to preventing a situation of further substitution away from taxed cigarettes by consumers.

This measure is estimated to yield €41 million in a full year.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I support the Government's resolution. Everyone knows this is as much about health issues as it is about financial issues. Had the Government gone further, we would have supported it. Some 25 cent will be put on a pack of 20 cigarettes, the standard price of which is approximately €8.65. This is dear compared with other European countries, but it is not half dear enough in view of the damage cigarettes cause to health. We support this modest proposal.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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The Taoiseach mentioned that the increase was due to health concerns. Perhaps he will clarify when those concerns were adopted by both Government parties. I do not have their pre-election programmes before me and I do no know whether they entered into this commitment during the election.

It is a revenue-raising measure. While their are health grounds for the increase, it is not one of the measures that Sinn Féin submitted in our pre-budget submission, as it will negatively affect the finances of those who will not give up cigarettes. I am disappointed, given that approximately €5 billion is lost to the black economy, particularly in terms of cigarettes. This issue has not been tackled. Time and time again, the business community has-----

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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I must interrupt the Deputy, although I do not like doing it. Only matters strictly relevant to the resolution can be discussed.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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It has to do with the increase.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Please do not stray off topic.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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I will give the Ceann Comhairle a commitment.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Other Members wish to speak.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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I will be brief. I have nearly concluded. Of the €5 billion lost, much owes to the illegal importation and black market sale of cigarettes. The Government has not tackled this issue despite this measure to raise revenue and protect health. People are buying cigarettes on Dublin's streets and in towns and villages at half the price charged by retailers. Even a small proportion of the €5 billion would save the State money. This could be done by increasing the number of people working in customs. It would have a greater impact on smokers' health. Regardless of this increase, they will continue to use the black market, which the budget is leaving untouched.

Photo of Joe HigginsJoe Higgins (Dublin West, Socialist Party)
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The last time I was a Deputy, the parties in government engaged in this ritual hypocrisy each year by introducing more taxes on cigarettes and pretending that it was a health measure. The Taoiseach's predecessor, Mr. Bertie Ahern, used to go on about it ritually. This is a revenue raising measure of some €45 million, the bulk of which will come from working class people and poor people. Unfortunately, smoking causes severe damage and should be tackled on a much harder scale than any Government has done until now, including a complete ban on advertising. However, if the Government was serious that this was a health measure, the revenue would be ring-fenced specifically for health issues related to smoking diseases and prevention. That is not the case. I am in favour of a major campaign to convince people not to smoke. I am not in favour of hypocritically putting another tax, under false pretences, on those who are among the poorest in our society. Therefore, I oppose this motion.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Kildare South, Fianna Fail)
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I am happy to support the motion although I see a lot of sense in what Deputy Higgins said, that funding from this source should be ring-fenced for the health needs of people who are damaged by tobacco products. Many members of the public will be disappointed at the failure of this budget to address the issue of below cost selling of alcohol and the ready availability of low-cost alcohol through the chain supermarkets to young people in particular. In his Budget Statement, the Minister for Finance made some reference to this and talked about the report being prepared by the Minister of State, Deputy Róisín Shortall. A number of reports have been produced on this subject and perhaps the Taoiseach has an opportunity, when responding, to indicate what timeframe he is considering-----

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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We are only dealing with cigarettes at this point.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Kildare South, Fianna Fail)
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I am suggesting there is a mistake in not including alcohol as well, particularly the alcohol products-----

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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We can only deal with what is here.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Kildare South, Fianna Fail)
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-----being sold at low prices, which are seriously detrimental to public health.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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We have three minutes left on this motion. I ask Deputy Buttimer to stick to cigarettes.

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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I support the Taoiseach. Despite what Deputy Higgins is saying, this measure is sending a strong message regarding health promotion by this Government. Deputy Sean Ó Fearghaíl was previously Chairman of the Oireachtas Joint Committee on Health and Children. If he takes the Minister's Budget Statement to the House to the next conclusion, he should consider that the health promotion aspect regarding below cost selling is being pursued by the Minister of State, Deputy Shortall, and that below cost selling was introduced by the leader of Fianna Fáil. This has led to an increase in alcohol sales and an increase in the misuse of alcohol in our society. It would be more in our line to work together on alcohol misuse and to pioneer the issue, as we are doing in the Oireachtas Joint Committee on Health and Children. The measure on tobacco sends a strong signal that the Government is intent, regardless the guise in which Deputy Higgins is masquerading, on the point that smoking is wrong. I challenge Deputy Higgins. Would society be better if people did not smoke? The answer is that we would, from the perspective of health promotion, work and recreation. It is important that Members of the Opposition, who come in and promulgate a philosophy and ideology that is outdated and warped, stand behind the Government and the people.

Photo of Joe HigginsJoe Higgins (Dublin West, Socialist Party)
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Whose ideology is warped?

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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Deputy Higgins should listen for once. He does not know everything. He may think he knows everything but he does not so he should listen.

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry South, Independent)
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He is entitled to his opinion.

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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He is but he should listen. Deputy Mattie McGrath should sit down. We have heard him all day.

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
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Excuse me, how dare Deputy Buttimer say that. I asked the Ceann Comhairle to speak long before Deputy Buttimer came in. Deputy Buttimer is not in school now.

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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Regarding the health promotion of the citizens of our country, it behoves all of us to eliminate the damage to public health, and a 25 cent increase in tobacco is a significant step.

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
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Gay Mitchell was a waffler as well.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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I call Deputy Mattie McGrath.

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
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I indicated long before Deputy Buttimer.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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We go to both sides of the House. There is no panic.

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
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I know that but the Ceann Comhairle is always leaning to one side. I am afraid his chair will capsize.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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I did not go to one side. Deputy Mattie McGrath should withdraw that remark.

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
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That is a fact.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputy Mattie McGrath should withdraw that remark.

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
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I have people here who saw me indicate. I indicated long before Deputy Buttimer. I will not be told to shut up by Deputy Buttimer. I would love to see the money ring-fenced for health, especially for people suffering from poisoning from smoking and indulging in those practices. I would like to see this Government removing the fear and scaremongering about which nursing homes it is going to close. There are lists every day and there will be a different list tomorrow. They should put the money into those homes to keep them open for elderly people who are suffering from lung diseases as a result of smoking.

Photo of Peter FitzpatrickPeter Fitzpatrick (Louth, Fine Gael)
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Coming from a sporting background, 25 cent is not enough. The number of young people who suffer from ill health as a result of smoking is a disgrace and I give my full support to the Government.

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry South, Independent)
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I would prefer if no one ever smokes again but unfortunately that is not the real world in which we live. I am against this increase because it is a further attack on poorer families and they will be hit by this further taxation.

Question put:

The Dail Divided:

For the motion: 136 (James Bannon, Tom Barry, Pat Breen, John Browne, Richard Bruton, Joan Burton, Ray Butler, Jerry Buttimer, Catherine Byrne, Eric Byrne, Dara Calleary, Ciarán Cannon, Joe Carey, Paudie Coffey, Áine Collins, Niall Collins, Michael Conaghan, Seán Conlan, Paul Connaughton, Ciara Conway, Noel Coonan, Marcella Corcoran Kennedy, Joe Costello, Simon Coveney, Barry Cowen, Michael Creed, Jim Daly, John Deasy, Jimmy Deenihan, Pat Deering, Regina Doherty, Stephen Donnelly, Paschal Donohoe, Timmy Dooley, Robert Dowds, Andrew Doyle, Bernard Durkan, Damien English, Alan Farrell, Frank Feighan, Anne Ferris, Frances Fitzgerald, Peter Fitzpatrick, Charles Flanagan, Terence Flanagan, Seán Fleming, Eamon Gilmore, Noel Grealish, Brendan Griffin, John Halligan, Dominic Hannigan, Noel Harrington, Simon Harris, Brian Hayes, Tom Hayes, Martin Heydon, Brendan Howlin, Heather Humphreys, Kevin Humphreys, Derek Keating, Colm Keaveney, Paul Kehoe, Billy Kelleher, Alan Kelly, Enda Kenny, Seán Kenny, Séamus Kirk, Michael Kitt, Seán Kyne, Anthony Lawlor, Michael Lowry, Ciarán Lynch, John Lyons, Eamonn Maloney, Micheál Martin, Peter Mathews, Michael McCarthy, Charlie McConalogue, Shane McEntee, Nicky McFadden, Dinny McGinley, Finian McGrath, Mattie McGrath, Michael McGrath, John McGuinness, Joe McHugh, Tony McLoughlin, Michael McNamara, Mary Mitchell O'Connor, Olivia Mitchell, Michael Moynihan, Michelle Mulherin, Catherine Murphy, Dara Murphy, Eoghan Murphy, Gerald Nash, Denis Naughten, Dan Neville, Derek Nolan, Patrick Nulty, Éamon Ó Cuív, Seán Ó Fearghaíl, Aodhán Ó Ríordáin, Willie O'Dea, Kieran O'Donnell, Patrick O'Donovan, Fergus O'Dowd, John O'Mahony, Joe O'Reilly, Jan O'Sullivan, Maureen O'Sullivan, Willie Penrose, Ann Phelan, John Paul Phelan, Thomas Pringle, Ruairi Quinn, Pat Rabbitte, James Reilly, Michael Ring, Shane Ross, Brendan Ryan, Alan Shatter, Seán Sherlock, Róisín Shortall, Brendan Smith, Arthur Spring, Emmet Stagg, David Stanton, Billy Timmins, Robert Troy, Joanna Tuffy, Liam Twomey, Leo Varadkar, Jack Wall, Brian Walsh, Alex White)

Against the motion: 23 (Gerry Adams, Richard Boyd Barrett, Joan Collins, Michael Colreavy, Seán Crowe, Clare Daly, Pearse Doherty, Dessie Ellis, Martin Ferris, Luke Flanagan, Tom Fleming, Séamus Healy, Michael Healy-Rae, Joe Higgins, Pádraig MacLochlainn, Mary Lou McDonald, Sandra McLellan, Caoimhghín Ó Caoláin, Aengus Ó Snodaigh, Jonathan O'Brien, Brian Stanley, Peadar Tóibín, Mick Wallace)

Tellers: Tá, Paul Kehoe and Emmet Stagg; Níl, Deputies Joe Higgins and Aengus Ó Snodaigh.

Question declared carried.