I propose, with your permission, a Cheann Comhairle, to take Questions Nos. 50 and 51 together.
The value-added tax applies to food and other essentials at exactly the same effective rate as that which applied under the former sales taxes and it was, accordingly, estimated that the introduction of the tax would not be a factor in causing the prices of these commodities to rise.
With regard to certain household goods, constituting a relatively small fraction of household expenditure, it was not possible to align precisely the incidence of the VAT with that of the former taxes. It was expected that there would be a need for minor price adjustments in such cases which should not, however, affect significantly the level of prices generally.
It is not possible to assess precisely at this stage the likely overall increase in 1973 in the price of food and household items arising from EEC entry and other factors, including normal market forces. In this regard, I would refer the Deputy to my reply to Deputy O'Leary on 14th November in which I agreed with the general tenor of the Economic and Social Research Institute view, published in the Quarterly Economic Commentary for autumn 1972, that food prices seem likely to rise in 1973, although not so rapidly as in 1972. The rise in nonfood prices has slackened off considerably during this year and it is hoped that this trend will be maintained in 1973.