The former Minister for Finance has already indicated our objection to this particular proposal. We believe that, again, it is inequitable relief in that, while it is admitted that poorer families pay more for food, this relief will benefit the well off, the rich and the very rich to an even greater extent. We had proposed that instead of removing the tax on food we would make appropriate compensation to the less well-off amongst us, for example, by considerably increasing the children's allowance payments. There are other objections also that we see to it. I shall not go into them in detail. I will enumerate them very briefly. One is that we believe, as indicated by Deputy Colley, that the removal of value-added tax on food will certainly not be reflected in a reduction of food items. The Minister in his statement today said that special vigilance will be exercised in this respect. He gave no indication as to the manner in which this would be done. We know all too well that the exercise of vigilance over retail prices is something that it is very difficult for any Government to do and to have it done effectively would require very many more inspectorate staff than we are likely to have available.
I want to remind the House again of what was said in relation to the introduction of the decimal coinage system. Again to repeat what the then Deputy Cosgrave said, it resulted in an explosion in prices. It is true that any change of this nature increasing tax on commodities generally inevitably leads to a much greater increase in prices. This is something I would like the Taoiseach to tell us about in relation to the extra vigilance that he says will be maintained on these prices, the extra vigilance which, he said, would be required to ensure that the reduction in the value-added tax on food items will be reflected in across-the-counter payments.
I think this will add tremendously to the problems of the ordinary housewife who does her shopping, particularly the housewife who goes to the supermarket and puts into her basket food items such as cheese, butter, bread, and who at the same time will have to buy other commodities like soap powder and so on. She will find herself having to deal with two rates of tax on what she regards as essential items. I am sure also it will impose an extra burden on retailers.
Therefore, it will be interesting to hear from the Taoiseach, first of all, how the vigilance will be exercised and in what way confusion can be avoided and, secondly, in relation to the commodities which are regarded as non-luxuries. The Minister spelt out some of these today in his budget statement and included sweets, ice cream, confectionery, soft drinks and oral medicines. If somebody has to buy a bandage or a plaster for a cut hand, that item has to bear the extra tax. The Minister also mentioned some of the other items that will be excluded.
