asked the Minister for Finance the estimated rise in the consumer price index resulting from the budget.
25.
Ceisteanna—Questions. Oral Answers. - Consumer Price Index.
24.
asked the Minister for Finance the estimated effect of the budget changes in VAT on the consumer price index.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 24 and 25 together.
I estimate that the overall effect of the budget changes in VAT rates, excise duties and other charges will be to increase the consumer price index by little more than half of one per cent.
I estimate that the changes in VAT rates alone will cause the consumer price index to fall by about three quarters of one index point.
Arising from the Minister's reply could he indicate, in the first instance, the manner in which the estimate he has given was arrived at and, in the second instance in regard to VAT, having regard to the fact that the Minister proposes to obtain a yield of £2.6 million more from the new rates of VAT than was obtained from VAT on food how is it that this could result in a reduction in the consumer price index?
The information which the Deputy seeks is very lengthy and complicated. I think it might be appropriate to give it, as I will give it, in my reply to the budget debate. The overall impact, as the Deputy knows, of VAT is such that when it is applied to particular commodities because a certain percentage of any family budget is expended on those commodities it may yield a much higher yield in taxation than if it was applied to some other commodities. I can assure the Deputy that in selecting the items for absolute removal of VAT and items for any increase the Government did endeavour to ensure that a net figure would be reached without any loss or gain to the Revenue. It was not possible to make any further adaptations without a loss to the Revenue which, in the circumstances, would not have been justified.
I should like to ask the Minister if he would provide the calculations on which the reply is based by way of circulation with the Official Report.
The removal of VAT from food leads to a reduction of 1.5. The adjustment in other VAT rates, consumer price index, produces a plus I which leaves a net gain to the consumer of minus ½.
My question was related to all of the calculation which the Minister gave and on which the Minister's original reply was based.
Yes.
Would the Minister be prepared to circulate to Members of the House the basis of calculation?
I will give a more detailed breakdown of all calculations when I am replying to the budget debate. This will go into the Official Report.
Recalling the alacrity of a colleague of the Minister in providing answers by way of tabular statement with the Official Report, I thought the Minister for Finance might take a leaf out of his book.
As the Deputy knows from his experience in the Department of Finance there are very few things that can be rendered by way of a satisfactory explanation in a simple tabulation. Frequently notes of explanation far exceed the explanation given in tabulation.