Jerry Buttimer (Fine Gael)

Most of what I wanted to say has been said. If one goes around the capital city of Dublin to places like Dawson Street, Grafton Street, Henry Street, Moore Street, O'Connell Street, or goes to Patrick Street or McCurtan Street in Cork one will see a great number of shops for sale or to let. In addition there is a great number of "sale" signs indicating reductions of 50% or 25% or offers such as "Buy one and get one free" or "Buy two and get a third one free". That applies across the board. This is an indictment of the proposed VAT increase. I am all in favour of shopping around and of competition. At a time when we should be encouraging consumers to spend we are not doing that. It is no wonder we have the flight of the Gaels to Belfast and Newry. People will soon start to travel to Manchester and London with the euro and pound approaching parity. All that may be stopping people is the Ryanair charge for luggage because people might be paying more for their bags than they would save on their purchases. We need to encourage people to spend.

I was in the Stephen's Green Shopping Centre yesterday where a number of shops have signs announcing they have absorbed the VAT increase. Senator John Paul Phelan is right that not everybody can do that. My biggest concern is not for the multinationals such as IKEA mentioned by Senator Quinn, but rather small local shopkeepers we all know who are struggling. We should be asking consumers to support these people. I do not blame people going to Belfast or Newry. I would do it myself if I were living in Dublin.

Related to the VAT increase is the way the banks have collared us all. The purpose of the bank financial support scheme was to allow liquidity into small enterprises. This morning we heard about the €87 million being hidden by a banker, which sounded like something from Alice in Wonderland. However, banks are coming after small business people for money. Senator Quinn has tabled a very good recommendation: "That the VAT Payment Deadline for businesses be extended to 90 days". We should be encouraging people and not discouraging them. I appreciate the Minister has a difficult job to balance the books. In America, President Bush gave a rebate cheque to people so they could go out and spend. Many states in America have sales tax-free days at the time of going back to school in August. I do not disagree with what should be the Government mantra of going out to spend. However, it is not encouraging people. This is a further tax that will discourage people from spending and is wrong.