Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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Question 227: To ask the Minister for Finance his views on the contention of the SIMI that there would be an overall benefit to the Exchequer in a 2.5% reduction in each of the VRT rates, as set out in its pre-budget submission; and if he will make a statement on the matter. [34770/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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A 2.5% reduction in VRT rates, as proposed by SIMI, would cost approximately €164 million in 2006. I have no comment on the SIMI contention. However, as has been said to SIMI before, if one believes that cutting the price of cars will generate proportionately more additional revenue, then there would seem to be no reason car dealers should not do so themselves to increase their sales revenues and consequent profits. I am informed that it would take additional sales of 18,000 new cars per annum to offset a VRT cut of 2.5%.

As the Deputy is aware, it is a long standing practice of the Minister for Finance not to comment in advance of the budget on possible budget decisions.