Paschal Mooney (Fianna Fail) | Oireachtas source

I support the comments made in the context of the amendment to the Order of Business by our party leader, Senator Darragh O'Brien. It seems this Government plays around with figures whenever it suits, as we have heard in the Seanad referendum debate. With regard to the 9% VAT rate, the figure the Minister for Finance indicated in public within the last week or two was that there was a loss to the Exchequer of €350 million. That figure has been challenged by Retail Excellence Ireland, which has indicated that a recent Deloitte report relayed how the intervention cost the State €88 million in net VAT receipts, with the employment gain equating to €261 million. The net impact to the Exchequer is a benefit of €173 million.

These are the figures but the reality on the ground is that the reduction in VAT from 13.5% to 9% resulted in the creation of 13,500 jobs in the services and hospitality sector. I know from speaking to people in the sector who welcomed the initial reduction, telling me on a number of occasions in my own part of the country - where unemployment is significant - that they had taken on extra workers. The question remains that if the increase in the VAT rate goes ahead in the budget, what will happen all the small businesses? These are coffee shops which employed an extra person when they had two or three already, for example. That is where the 13,500 jobs have mainly come from, rather than the major hospitality areas. Will the businesses have to release the extra people that they took on if they have to pay extra VAT? It seems more likely that businesses will increase prices between now and Christmas, which will prevent people from spending. Getting people to spend money was the main purpose of the exercise.

The Minister for Finance indicated in the Dáil yesterday that this was a pump-priming exercise that had worked but I hope he is right. I understand perfectly well Senator Clune's question of where to find the money and the bouncing around of figures ranging from €350 million to €88 million. It is still a significant sum in the current climate. I plead with the Acting Leader to try to use her best influence in this regard and formulate an opportunity to debate this important for the hospitality sector in the House.