Jim Walsh (Fianna Fail)

How does the Minister of State propose to police the VAT reductions? We did away with price controls when they were needed at a time of significant growth in the economy.

Consequently, a great deal of profiteering occurred. Previous speakers referred to obtaining good value in hotels and restaurants. That is undoubtedly true of certain establishments. However, it is not true in respect of many establishments. I recently met someone from the Continent who visited Dublin and who stated that it remains hugely expensive.

Newspaper prices have increased significantly in recent months. I presume this is not cost-related because in light of existing pressures, all good businesses are cutting their costs. The only entity not cutting its costs is the public service. I do not expect that the increases in price can be justified on the basis of costs. I wonder if these increases were anticipatory in nature so that when the reduction in VAT arrives, profits will either remain steady or perhaps increase. This type of behaviour will be difficult to police.

In respect of the programme for Government, there were some good innovations in the context of what the Taoiseach did in reconfiguring Departments. I agree with some of the changes introduced but not with others. If the country needs anything, then it must be a Department to deal with consumer affairs and competitiveness. Surely any Government's main objectives would lie in these areas. If it were possible to do so tomorrow, I would advocate reducing wages across the entire economy. However, there would be a corresponding need to reduce prices. If we could engage in such a wholesale reduction, we could make great strides towards overcoming some of the difficulties we are experiencing.

I do not wish to make dire predictions but we are heading towards a point where we will be forced to devalue. The consequences of such an eventuality have not been contemplated at all. The alternative is to reduce costs and salaries across the economy. This constitutes a significant part of the correction that must be made. If we make such a correction, we can then begin to rebuild and restore confidence because we will once again reach the point where wages will increase.

It will not be possible to deal with our current difficulties over the period of a decade. In such circumstances I urge the Minister of State to consider how we might ensure that the envisaged reductions will be passed on to the consumer. If they are not passed on, jobs will not be created. I will be interested in hearing the Minister of State's comments in respect of that matter.