Dáil Éireann debate -
Wednesday, 22 Jan 1997

Vol. 473 No. 4

Financial Resolutions, 1997. - Financial Resolution No. 3: Value Added Tax.

The Taoiseach

I move Financial Resolution No. 3:

(1) That in this Resolution—

"the Principal Act" means the Value-Added Tax Act, 1972 (No. 22 of 1972);

"the Act of 1996" means the Finance Act, 1996 (No. 9 of 1996).

(2) That the rate of value-added tax on the supply of livestock and live greyhounds and the hire of horses be increased from 2.8 per cent. to 3.3 per cent. of the taxable amount or value of such goods and services, and that, accordingly, the Principal Act be amended in subsection (1) (inserted by the Finance Act, 1992 (No. 9 of 1992)) of section 11 by the substitution in paragraph (f) of "3.3 per cent." for "2.8 per cent." (inserted by the Act of 1996).

(3) That the rate of flat-rate addition to prices of agricultural produce or agricultural services supplied by unregistered farmers be increased from 2.8 per cent. to 3.3 per cent., and that, accordingly, section 12A (inserted by the Value-Added Tax (Amendment) Act, 1978 (No. 34 of 1978)) of the Principal Act be amended by the substitution in subsection (1) of "3.3 per cent." for "2.8 per cent." (inserted by the Act of 1996).

(4) That this Resolution shall have effect as on and from the 1st day of March, 1997.

(5) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

Resolution No. 1 relates to tobacco products. This involves an increase of 7p on a packet of 20 cigarettes and pro rata increases in other tobacco products. It is expected to yield £14.9 million in 1997 and £17.6 million in a full year. The consumer price index effect is estimated at 0.1 per cent. There has been a fair degree of success with the tax stamps programme which is designed to deal with tax evasion in the cigarette area. Consumption of cigarettes on which duty was paid increased by 1 per cent in the last 12 months. A packet of cigarettes is 19p dearer in Northern Ireland than it is here at the moment. As a result of this increase the differential will be 12p.

Resolution No. 2 refers to hydrocarbons. Here the increase in duty on leaded petrol is 2.5p on a litre or 11.5p per gallon. The increase in duty on super unleaded petrol, inclusive of VAT, is 2p per litre or 9p per gallon. The increases in duty on unleaded petrol, inclusive of VAT, amounts to 1.5p or 7p per gallon. The increase in duty on autodiesel, inclusive of VAT, amounts to 1.5p per litre or 7p per gallon.

Dr. O'Hanlon

How much is the increase on ordinary petrol per gallon?

The Taoiseach

The increase for leaded petrol is 2.5p per litre, or 11.5p per gallon.

Dr. O'Hanlon

How much is the increase in duty on super unleaded petrol?

The Taoiseach

The increase in unleaded petrol is 1.5p per litre or 7p per gallon.

Dr. O'Hanlon

How much is the increase in unleaded petrol?

The Taoiseach

The increase in unleaded petrol is 1.5p per litre and the increase in leaded petrol is 2.5p per litre.

Dr. O'Hanlon

How much is that per gallon?

The Taoiseach

That is 11.5p per gallon on leaded and 7p per gallon on unleaded petrol.

An Ceann Comhairle

The Taoiseach should be allowed to make his statement. Members may ask as many questions as they desire after that, up to the appropriate time.

The Taoiseach

Petrol is cheaper here than it is in Northern Ireland. Leaded petrol will be approximately 5p per litre cheaper here after the increase. Unleaded petrol will be 6p per litre cheaper here after the increase. Leaded petrol prices decreased by nearly 15 per cent between 1987 and 1996 in real terms whereas inflation has been about 25 per cent up in real terms in the same period. Unleaded petrol prices here have also decreased by 15 per cent over the same period.

Resolution No. 3 relates to value added tax. This will increase the flat rate of farmers' rebate from 2.8 per cent to 3.3 per cent. This is effectively due to the fact that farm output prices have fallen while input prices have not. The net position of the farmers in terms of the differential between sales and inputs has disimproved and there is a justification for this increase in the VAT rebate. The value added to products has decreased, therefore the value added tax rebate deserves on the formula to be increased. This formula is revised every three years and the revision is substantial on this occasion. The increase in the rebate for farmers is timely and significant. Farmers clearly need some assistance because of falling product prices for many of the principal farm outputs, notably beef but also in milk prices. I am sure Deputies understand the way the rebate works. If they do not I can elaborate. We are talking here about two measures of increase in taxation and one measure of reduction in taxation.

Mr. B. Ahern

The resolution on farming uses a formula that appears every year. Will the Taoiseach indicate in value terms what this would mean to the agricultural community? We know the difficulties being experienced. The additional cuts announced last week will create further difficulties. What does the increase of 3.3 per cent mean and what will it provide by way of refunds based on the position in 1996?

As Minister for Finance I imposed big increases on tobacco products. Will the Taoiseach outline the assessment of what this measure will do in 1997? How will it affect employment and consumption? He stated that it will bring the differential between here and Northern Ireland to 12p or 13p, but that neither the Revenue Commissioners nor the Government consider this will create a great difficulty.

I spent much of my time as Minister for Finance dealing with the stamp system. It is not working. It is difficult to avoid people selling non-stamped cigarettes on the streets. I raised this matter last year and the previous year. It goes on unabated, entailing a huge amount of cigarettes, despite the supposed involvement of drug barons, warehousemen and others. In many parts of the city more cigarettes are sold on the streets than in the shops. I am glad to see that the Taoiseach spent a considerable time yesterday visiting one such local community. His visit was appreciated. Had he walked through the area with me he would have found that cigarettes could be bought cheaply on street corners.

The Taoiseach

One could also buy a few good horses.

Mr. B. Ahern

It demonstrates that the control of horses legislation is not working. Nor are the stamping proposals working. Shops which pay high rates are unable to sell cigarettes because thousands of packets are sold on the streets. No attempt is being made to regulate this. This was not the intention of the Government, of which I was the Minister for Finance, nor of the Revenue Commissioners, who researched the international situation when compiling their proposals.

It may be a matter for the Revenue authorities or the Garda. In the meantime, no serious attempt is being made to control this appalling problem. Vast numbers of people are engaged in the selling of non-stamped cigarettes.

The Taoiseach

If that is the case there must be a dramatic increase in cigarette consumption because stamped cigarette sales have increased by 1 per cent.

Mr. B. Ahern

That is why I challenge the Taoiseach's assertion that there has been a 1 per cent drop in consumption.

The Taoiseach

There has been a 1 per cent increase in consumption.

Mr. B. Ahern

I would not expect the Taoiseach to give his time to this, but he should ask his advisers or Government colleagues to take a walk through one or two streets of my constituency — the Minister of State at the Department of Enterprise and Employment, Deputy Rabbitte, would know them well — and see where dozens of people sell cigarettes.

Do such activities comply with the law? Does it matter? Are we imposing a percentage increase because it does not matter if hundreds of people are engaged in defying the law? This was not the reason, as Minister, I introduced legislation. At the time I had harsh words for some Members on the matter.

I have only had the opportunity to raise this matter under Financial Resolutions in the past few years. It is an appalling situation. Will the Taoiseach outline the views of Revenue on the matter? Can Revenue not get the Garda Síochána to act? Does nobody walk through the main streets of the capital city to know what is going on?

There is major disappointment with the budget outside the House and shock that the expectations which were raised gravely misled the public. Only tiny percentage changes have been made to the taxation position, entailing 1.5 per cent for those in middle income brackets. The Government built up a false expectation of a huge tax package and then spread the package it produced very thinly.

Will the Taoiseach justify the increases of 11.5p for a gallon of leaded petrol, 9p for super unleaded petrol and 7p for leaded petrol and diesel? They filter through to the public and are a charge on transport. Cars are no longer a luxury for the vast majority of people. The increases are penal and are against the spirit of removing the burden of taxation. They may appear lower when expressed in terms of litres, but this cannot disguise the size of the increases in terms of gallons, especially when the high powered cars of today use so much petrol.

My colleagues from the Border areas will express their views on this issue. The Government never appears to listen to anything regarding Border areas, indeed it does not have any Deputies from the region.

Minister of State at the Department of the Taoiseach (Mr. Carey)

I represent Border interests.

Mr. B. Ahern

I know the Minister of State tries to represent County Clare well, but people from the Border region are never listened to by the Government while those who attempted to make representations to Members have been ignored. What is the Taoiseach's justification for this and what are his views on the costs to industry which these increases will impose?

The Taoiseach

I am surprised at the Deputy's remarks on tobacco. While I would not claim to be familiar with the sale of cigarettes, either duty or non-duty paid, there has been a 1 per cent volume increase in cigarette consumption, on which duty has been paid. A very big increase in the sale of non-duty cigarettes, as suggested by the Deputy, would mean that there has been a big increase in cigarette consumption. I do not believe this is happening. Cigarette consumption appears to be stable; perhaps it is not falling as much as one would like but it is stable.

There is good co-operation now between the Revenue and the Garda. A year ago the Deputy would have been right, when this problem was more severe than today and there was not the kind of co-operation there should have been. However, there has been a higher number of seizures of illegally untaxed cigarettes and a higher number of prosecutions. This can be documented. There is a review of the penalties to see if they can be increased and there is also a review as to whether additional powers are necessary to stamp out the problem completely. Perhaps there should be a European Union initiative to deal with the issue of cigarettes on which duty is not paid. That is all I have to say on the matter. We will intensify efforts to deal with the problem but I believe the situation is improving.

With regard to the value of VAT refunds to farmers, in 1996, on the basis of the existing rate of refunds — 2.8 per cent — the amount of VAT paid by unregistered farmers was £107.51 million on total sales of goods worth £2.8 billion. The increase in the rate from 2.8 to 3.3 per cent will have a proportionate effect in increasing the amount of the refunds. A figure for the total amount of the refunds which will result from such action is not available but I will endeavour to provide it to the Deputy later in the debate. However, a substantial sum of money will have been paid to unregistered farmers off a VAT bill of approximately £107 million to £110 million. Therefore, that will be substantially reduced.

The Deputy also raised the issue of hydrocarbons. I am not altogether convinced by his concerns regarding the Border areas because the price of petrol is currently cheaper in the Republic than in Northern Ireland.

Mr. D. Ahern

Not by 11p.

The Taoiseach

Therefore, the Deputy's concerns are not valid.

An Ceann Comhairle

In order to utilise time effectively, I remind Members that a question must be put in respect of Financial Resolutions Nos. 1, 2 and 3 at 9 p.m. Therefore, brevity might be the keynote of our proceedings.

Mr. M. McDowell

I support the increase in the duty on cigarettes because I recently produced an alternative budget which suggested a more stringent increase. Therefore, I will not make an idiot of myself by stating I now oppose such an increase.

I agree with Deputy Ahern because during the first week of the 1989 general election campaign the then Taoiseach, Mr. Charles Haughey, stated he never realised that health was an issue. This shows how one can become cut off from ordinary people. If the Taoiseach visited the pedestrianised areas of north inner city Dublin to which Deputy Bertie Ahern referred, he would see droves of people selling illegal cigarettes. The reason they are engaged in this activity is that a major market for such cigarettes exists and these people are not wasting their time. I am worried not merely about the loss of revenue to the Exchequer but about the black market that is being created. These markets are not dominated by the Sisters of Charity but serious black marketeers. The way such people protect their patch or enforce their rights in these markets is to break the legs, or worse, of their competitors.

There is ample evidence that trading in cigarettes on which duty has not been paid is the preserve of some well organised crime bosses. I am convinced that it could be stopped rapidly if there was a will to do so. I am not suggesting the introduction of draconian measures but one would have to walk around with a paper bag over one's head to be unaware of the extent of this significant problem. Such illegal trading is a source of crime, it induces people to become involved in crime and extends the influence of criminals. Many of those involved in the actual selling are not, by any stretch of the imagination, significant players in crime. However, they are being induced into pyramids of illegality, at the top of which — the Taoiseach should not fool himself in this regard — are serious players.

I support the change in relation to VAT. It was almost inevitable that the Government would increase petrol prices because, in his budget, Kenneth Clarke, provided the opportunity to do so. I do not believe that is a good enough reason for the increase because, between the various indirect tax changes being made, an inflation rate of 2.2 per cent is provided for in next year's Estimates which is too high. Tourism, the creation of employment and inflation rates should have been given the benefit of the doubt in this regard and we should have organised our affairs to avoid the increase in petrol tax. I agree with the Taoiseach as far as VAT and petrol are concerned but I disagree with him as regards cigarettes.

Mr. D. Ahern

With regard to tobacco and cigarettes, does the Taoiseach not accept that a Government will eventually find it is at the point of diminishing returns? Many people earn their living from the manufacture of tobacco products. The P.J. Carrolls factory in my home town has borne the brunt of problems relating to increases in excise duty on cigarettes in the past. I accept the arguments that people should not smoke. However, there must be a better way to educate the public than by merely adding excessive amounts of excise duty each year which ultimately leads to the loss of jobs, as was the case at P.J. Carrolls in Dundalk.

I agree with my party Leader in respect of the illegal trade in cigarettes. The fact that people are involved in selling cigarettes on which duty has not been paid means that such a trade exists. It is acknowledged that, for some unknown reason, there has been a huge increase in the consumption of cigarettes among young females. The Government should attempt to curtail the illegal trade which is obviously where some of the major problems exist.

With regard to petrol, the Minister of State recently referred to "break for the border" which represents the height of the knowledge of this Government regarding the problems in Border areas. Deputy Carey was appointed a token Minister of State with responsibility for the Border areas because the Government, in appointing Ministers and Ministers of State, decided not to appoint anyone from the Border region. What chance is there for Border areas as far as input at the Cabinet table is concerned? It is indicative of the Taoiseach's lack of knowledge regarding the illegal trade on some streets in Deputy Bertie Ahern's constituency the he believes such a trade does not exist.

The Taoiseach

I did not say it did not exist. I stated that the problem is less severe than it was last year.

Mr. D. Ahern

Anyone with experience of the problem would inform the Taoiseach otherwise.

The differential in the price of petrol sold north and south of the Border in favour of stations in the Republic has been minuscule. Due to higher petrol prices in the South in the past, stations on the southern side of the Border had to compete with their counterparts on the northern side. Likewise, in recent years, northern stations have had to compete with their southern counterparts. The figures provided by Department of Finance officials may not be those which obtain in the Border areas. This budget has obliterated the differential in favour of the southern side of the Border and helped petrol stations in the North. The overall returns from excise duties on petrol would be in the region of £40 million. Instead of giving with one hand and taking with the other, why did the Government not reduce the overall pay out through tax cuts by £40 million, instead of raising it through the petrol increases? This sleight of hand will affect the economy of the Border constituencies and will add hidden increased costs to haulage prices across the country. It is a detrimental act. The Government had the opportunity not to touch petrol prices but unfortunately it did the opposite. This must be because of the lack of knowledge of the Border area and lack of input by someone from that region.

The unemployment in the Taoiseach's county town of Navan — at least I think it is the county town——

The Taoiseach

The Deputy is displaying a lack of knowledge of his neighbouring county, while complaining about other people's lack of knowledge.

Mr. Rabbitte

Clonee is the county town.

Mr. D. Ahern

LMFM helps me. While 1,900 people are unemployed in Navan, about 4,500 are unemployed in Dundalk, a similar number in Drogheda, and 1,500 in Ardee.

Mr. McGahon

The same was true when Fianna Fáil was in Government.

Mr. D. Ahern

Deputy McGahon was in trouble when he intervened earlier so he should keep quiet. While unemployment seems to be coming down nationally that is not happening in Louth and this budget hinders rather than helps the county, particularly the town of Dundalk. The Taoiseach may feel he has helped other areas but he has hindered the Border constituencies and I say "shame on him". No one has taken cognisance of the fact that these towns along the Border have suffered more than most and will suffer as a result of this budget. I defy Deputies on the other side who have knowledge of what I am saying to contradict me. The Government must acknowledge that an extra 11.5 pence on a gallon of petrol will cause cars to go North again.

The Taoiseach

No.

Mr. D. Ahern

It will — the Taoiseach does not know the position on the ground. This increase is far bigger than the current differential in favour of southern petrol stations. As of tonight, many people who formerly bought their petrol on the southern side of the Border will go northwards. Not only that, those who formerly came in their droves from the North to get petrol in my town will stop doing so. Fine Gael and the other Government parties will pay the price for that, whether they like it or not. When times were hard there may have been a reason for increasing the price of a gallon of petrol, but there is none at this point when the Minister, Deputy Quinn, says the country is awash with money. The Government has done a disservice to the economy of County Louth and the Border area.

Mr. McGahon

I rise to correct Deputy Ahern. While what he said about the petrol price increase is largely true I feel he is exaggerating. In the seven years when Fianna Fáil was in Government, sizeable increases were delivered.

Dr. O'Hanlon

No, they were not.

Mr. McGahon

They were.

Mr. D. Ahern

They were not of this size.

Mr. McGahon

The Border area has always had to suffer unjustified increases. I have been here for 15 years and have criticised my Government when it was deserved but I have never heard Deputy Ahern criticise his Government.

Mr. D. Ahern

I have criticised cigarette price increases over the years. I will show the Deputy the record.

Mr. McGahon

If he did make a criticism it was ambivalent or wishy-washy.

Mr. Browne

(Carlow-Kilkenny): Did he criticise the Progressive Democrats?

Mr. McGahon

I agree with Deputy Ahern that 11 pence on a gallon of petrol is a large increase but I do not believe it is large enough to bring back the bad times when there was a difference of between £1 and £1.20 between prices North and South and a cavalcade of cars, even some from County Meath, crossed the Border. Those days are gone forever and an increase of ten or 11 pence will not bring them back.

Mr. D. Ahern

Maybe the Deputy will take the Taoiseach for a spin when he comes down like the Holy Ghost.

Mr. McGahon

In those dark times people drove into petrol stations to buy half a crown's worth of petrol to take them to the Promised Land.

I congratulate my cousin, the Minister for Finance, for listening to my entreaties on behalf of the workers in Carrolls and increasing the price of 20 cigarettes by only seven pence. Deputy Ahern's Government never matched that. It is a realistic increase and the industry accepts it. However, more attention should be given to the importation of illegal cigarettes. This growth industry is taking place under the noses of the Garda Síochána, the Revenue Commissioners and the Government. Cigarettes are being openly sold on every street in Dublin, especially Henry Street. Why has this illegal industry not been closed down? There is a connection between that practice and the selling of drugs and the Revenue should turn its attention to that illicit trade.

I repeat my annual criticism of the hypocrisy of all Governments who turn a blind eye to the drink trade and home in on the cigarette industry. I do not exhort anyone to smoke cigarettes because it is a definite health hazard but in every country more people die from the excesses of alcohol. Drink is the most widely used drug in the world and kills more people than heroin, cocaine or any other hard drug. Alcohol is responsible for more deaths and related illnesses than any other factor and the cigarette industry pales into insignificance beside it.

The glorification of drink is a problem in this country. We are awash with drink and drinkrelated problems. Children of 12 years of age are drinking and seductive advertising on television is at the root of the problem. When young children are bombarded with advertisements every ten minutes which extol the goodness of Guinness and other drinks, is it any wonder that the number of children born out of wedlock is rising? Is it any wonder that more and more people are falling prey to the ravages of alcohol?

A survey in yesterday's Irish Independent on wife beating in Dundalk showed an alarming number of victims. I was present when President Robinson opened a residence for battered wives on Monday and there were hundreds of people waiting to get into it. Those battered wives were not beaten by people who have problems with cigarettes but by people with alcohol related problems. Yet, we turn a blind eye to alcohol and the damage it causes. I do not advocate prohibition, rather a rein on the sale of alcohol because most social problems may be identified with drink.

I commend the Government for recognising the annual extra burden placed on the cigarette industry and giving it some relief. The Taoiseach should focus on the illegal trade in cigarettes which is carried out openly in Dublin and as a result of which the Revenue Commissioners have lost millions of pounds. If our cigarette industry is to continue the Government must support the workers in this legitimate industry which pays its dues to the State.

Dr. O'Hanlon

I support the increase in the price of cigarettes. The Taoiseach said he did not know why those of us from the Border region were complaining about the increase in the price of petrol. Not alone does the Taoiseach not know why but there is nobody from the Border region at Cabinet to tell him.

The Taoiseach

The Deputy is talking through his hat.

Dr. O'Hanlon

I am not. Deputy McGahon referred to the bad times when people crossed the Border in droves to buy petrol in the North. That was the result of a decision by a Fine Gael Government, in which the Taoiseach was a Minister, to increase the price of petrol. This is the second year in succession that the price of petrol has been increased. Fianna Fáil Governments from 1987 resisted the temptation to increase the price of petrol because the economy of the Border region is sensitive to such increases. At present, many people from the North are crossing the Border to fill their cars with petrol. When they come across the Border they may stay for a few hours and spend money and this contributes to the economy of the region.

The Government has no commitment to the Border region — all it pays is lip service to it. I tabled a parliamentary question today asking the number of jobs from overseas firms created by IDA Ireland in the country in 1996 and the number of those in Counties Cavan and Monaghan. Out of 14,081 jobs created, 22 were in County Cavan and 25 in County Monaghan. Taking into account the loss of jobs in overseas firms there is a net loss of 64 jobs in my constituency. That is an indication of a Government's lack of commitment.

This increase will have serious consequences for competitiveness in the Border region because higher transport costs will lead to an increase in the cost of all goods. Last week the Minister for the Environment decided that motorists should pay for the provision of water in urban areas. This Government is anti-motorist, anti-rural — people living in rural areas still have to pay for their water — and anti-Border. The Taoiseach must address this matter urgently. It is a major mistake to increase the price of petrol by 11.5p per gallon.

Dr. McDaid

As a general observation on the budget day arrangements, it is unfair on the Opposition spokespersons, although the budget is well leaked, to have to speak on it at such short notice. There should be a short recess so that the Opposition spokespersons may properly study the speech.

I support my colleagues' comments on the increase in the price of petrol. There would seem to be a lack of knowledge about the Border area. The Taoiseach's officials may be right that one can buy unleaded petrol at 64p or 65p per litre in mid-Ulster. However, along the Derry Border one would pay 59.9p per litre while in Buncrana the price is 60.3p tonight and it will rise to 61.8p tomorrow morning. Northern Ireland is being considered as a homogenous area and proper account is not being taken of the corridor along the Border where the competitiveness must be observed to understand the particular problems of the Border region.

The small petrol stations in the Border region were not selling much petrol until about four years ago. There had been little or no motor trade given the level of foreign imports and they returned to petrol retailing in a competitive manner. The Revenue Commissioners seem to be complacent about the Border petrol stations. Is it the case that 70 per cent of the retail price goes to the Revenue Commissioners? If that is so, the small Border stations contribute some £300,000 to £500,000. A mistake is being made in relation to this small corridor along the Border. The Taoiseach will be aware that three hypermarkets are scheduled to be built in Northern Ireland — in Derry, Newry and Belfast — in the next two years and they will automatically undercut the price of petrol. This has not been taken into consideration.

The unequal balance in the Border region raises the issue of IFI and EU funding. When I asked why we get 20 per cent of EU funds while the North gets 80 per cent, and why we get 25 per cent of IFI funds while the North gets 75 per cent, I was told the figures are based on populations. If the Border region is to be put under further pressure it will not be long before the division of funds is 90 per cent to 10 per cent. The small towns in the corridor along the Border had been doing reasonably well and the Taoiseach and his officials should be aware of the area's problems.

Mr. O'Dea

My colleagues from the Border region have spoken eloquently about the competitive disadvantage in which petrol retailers from that region have been placed in recent times. That imbalance was redressed to some extent over the past 12 months but the competitive advantage which ensued as a result of various developments elsewhere has been obliterated in one fell swoop by a very substantial increase in duty on petrol. This is simply a revenue raising measure. It will erode the concessions outlined in other elements of the budget, is a substantial cost on business and will effect job creation. It flies in the face of other taxation measures in this budget which were expressly included to encourage job creation. It shows the lack of strategy and coherence which underlies this rickety edifice.

The Taoiseach and the Minister for Finance advanced health considerations as one of the reasons for the increase in tobacco duty. I am sick and tired of health being trotted out as an alibi for increases in tobacco duty.

The Taoiseach

I did not. The Deputy was not listening.

Mr. O'Dea

If the Government was seriously worried about the impact of tobacco consumption on health, it could increase duty to such an extent that consumption could be wiped out or it could be banned as other substances are banned. This measure is directed at a handy target to gain revenue.

I do not want to comment on the morality of it but there has been discussion about the extent of the illegal tobacco trade in Dublin. I will give the Taoiseach figures to give him a flavour of the seriousness of the situation because, as Deputy McDowell said, some of the most nefarious people here are involved in the illegal cigarette trade.

The Taoiseach should know that the proceeds from this trade are funding other operations — drug dealing and its various ancillary activities, which includes the shooting of journalists. Last year 3.5 million smuggled cigarettes valued at £530,000 were seized on the streets of Dublin which resulted in a loss to the Exchequer of £400,000 while 180 people were detected with illegal cigarettes in their possession. How many convictions have there been? There have been 17 convictions for smuggling and 11 for selling illegal cigarettes. The fines imposed totalled £15,500. How seriously is the law being enforced in this area? Will the Taoiseach reflect on those figures and bring them to the attention of the Revenue Commissioners and the Department of Justice bearing in mind that these activities are funding further activities of some of the most reprehensible people in this country?

I welcome the increase in the flat rate VAT refund for unregistered farmers from 2.8 per cent to 3.3 per cent to compensate for the fact they are not registered for VAT but pay it on inputs. This is only one small glimmer of light in the gloom which surrounds the agriculture industry; an industry ridden by crisis and saddled with a Minister for Agriculture in whom nobody has the slightest degree of confidence. I make those points to illustrate to the Taoiseach the extent to which some of the resolutions he proposes fly in the face of other measures in the budget and will achieve results which directly contradict what he is trying to achieve through other measures. That indicates the budget is a "mixum gatherum" prepared by three parties, each getting what it could out of it as there is no coherent strategy or direction in it. The benefits and allowances are spread far too widely and it will achieve nothing.

Mr. Leonard

It would be remiss of us if we did not object strongly to the increase in the price of petrol and diesel. In 1983 the price increase of 16p per gallon devastated the Border region and it has not fully recovered since. I remember bringing deputations to the then Minister for Finance, Deputy Dukes, and his reply was that one cannot legislate for a region. It is nonsense to talk about petrol being cheaper in the North. The price of petrol is practically similar either side of the Border. There is practically no variation in price. It is ridiculous to add 11p to the price of a gallon of petrol and talk about breaks for Border areas.

Did the Taoiseach get the report from his Minister of State on funding for Border regions? Did he examine the returns from Forbairt and the IDA which show an 11 per cent reduction in the number of jobs in the Border region while there is a 16 per cent increase in the east? From January 1995 to July 1996 in County Monaghan, 452 additional jobs were created while the Taoiseach said there were 24,000 extra people at work. There was a 12 per cent increase in jobs in Monaghan and a 6 per cent increase in Cavan. The proof of success in any economy is jobs. The Taoiseach on this occasion should have resisted such an increase. The attitude in Fine Gael and the Labour Party seems to be it does not seem to make much difference in the peripheral regions because they will come along all right.

I do not object to an increase in tobacco duty. I was at health board meetings attended by a number of specialists on throat cancer etc. Having listened to them, I would feel like a hypocrite if I was to complain about the increase on tobacco products. However, I strenuously object to the increase in the price of petrol and diesel.

Mr. N. Ahern

I do not smoke and I do not have a cigarette factory in my constituency. Normally I would not give a damn whether 7p or 17p was added to the price of cigarettes but I am concerned about this in terms of the illegal cigarette trade which is a growing business. It may be confined to certain parts of Dublin but it has gained a sizeable portion of the cigarette market. While this part of the budget is designed to raise revenue, the big winners are those involved in organised crime because their profit margin is being increased. I want a far greater crackdown on these people rather than adding to their profits.

The Taoiseach said sales increased by 1 per cent last year. Does he have figures for the past three or four years? The market is not declining. If the economy grows by 5 per cent, perhaps people spend 5 per cent more on drink, clothing, furniture and tobacco but for those involved in illegal trade it is big business. Some months ago someone told me that they walked down Henry Street and Mary Street from O'Connell Street to Capel Street and saw 38 people selling tobacco. I agree with the Taoiseach that lately sellers are not as obvious on some city centre streets as they were a year ago. There has been an attempt by the Garda to move them along, although some threats have been made against gardaí for doing so. However, as someone else said, they have not gone away. They may have gone from Talbot Street or Henry Street but they are now out in the housing estates. I am sure the Minister of State, Deputy Rabbitte could tell us about that.

We once used to get milk delivered to houses in Dublin every day but now cigarettes are being delivered to the door, albeit by courteous people in certain housing estates in Dublin. That is a fact. If overall sales of cigarettes are going up I would be very surprised.

This issue is discussed here every year and there is talk of stamping but the rules do not seem to be working. Someone mentioned a strange court case the other day involving a judge's ruling which may throw out existing stamping regulations. Perhaps we could have some information on that and the repercussions.

The budget is about raising revenue and the image being projected is that we have all done well today. However, there is no point in talking about trying to crack down on crime for the rest of the year when big organised crime has to get its cut as well. They will be big winners and that is very wrong. There must be an extra effort to crack down on crime because big money is being made by criminals and the State is being defrauded.

An additional 1.5p to 2.5p on petrol looks small but it is a different ball game when the extra cost is calculated per gallon. Even the Minister for Finance said there will be an extra 0.2 per cent on the cost of living index which is basically 10 per cent of the forecast increase for the year. That puts it in another context. It is a sizeable increase in the cost of living but obviously it is bringing in money which, as usual, is needed.

Mr. Power

I sat here for most of the day listening to the Minister for Finance and I wondered where all this money had gone to. He told us how well the country is doing. Many people would be furious about what the Minister was saying if they could have listened to the entire speech. He painted a picture saying people have never been as well off in their lives. The truth is that while the economy is on an upward turn and we are experiencing a boom, the benefits of that boom are being enjoyed by a small minority. Many people still find it extremely difficult to live from day to day. Many people are still paying for the things they bought at Christmas.

In his speech the Minister said the country was a tremendous attraction for American investment. There are 424 American firms operating in the 26 counties and 16 of them are operating in the Border counties. That gives one an idea of the deprivation and lack of balance that exists. I am not pointing the finger just at this Government but we cannot allow that imbalance to continue. Foreign investment is important and we are happy to have it in the country. Kildare has been lucky to attract some of the major players but in the interests of the country it is important to have a good spread in that investment. Tough decisions will have to be made to ensure the proper balance is struck.

I have heard Ministers before, including some from my own party when they have had to face the music, making comments on smoking similar to those of the Minister for Finance earlier today. I suppose there are only a few areas where one can look for the extra few pounds necessary to pay for the goodies on budget day, and today was no exception. The Minister decided to increase the price of cigarettes and he mentioned health and environmental reasons. I have said before in the House that if a Government was serious about the health of our nation it would ban cigarette advertising. There is no knowing the cost of smoking financially, medically and environmentally. The tobacco industry is one of the most powerful in the world. Its customers are dying every day so they have to recruit new ones to fill the vacuum. Hence one has these sexy advertisements aimed at young people to make it look good and cool to smoke. We allow this to continue despite the fact that we know the damage it is doing to our people.

Mr. McGahon

There is no cigarette advertising on Irish television, just drink.

Mr. Power

I am talking about advertising in general. We will have to face the music and if we are serious about health, as we must be, we will have to impose a ban on cigarette advertising.

Mr. McGahon

It is there.

Mr. Kirk

When one comes into the debate at this stage one faces the problem of repetition. When the budget is presented to the House there is a certain inevitability that public representatives from the Border counties will assess the impact of increases, particularly in the cost of cigarettes and fuel, and their potential for trade distortion. The relationship between the price of fuel North and South has levelled out in comparison to the great disparity that existed some years ago when we had serious trade distortions. Significant profits were made following a rush of trade northwards because the price of petrol in the North was much cheaper than here.

Today's provision for increases must be seen in a broader context than the impact it will have in Border counties. We are talking about increased freight charges, increased motoring costs for those going to work, and increased costs for a whole range of services provided daily in the economy.

Petrol and diesel are essential ingredients in people's daily lives. Motor power has become an integral part of our lives and we cannot get by without it. The number of people who go to work on foot are few and far between. Within the past ten days a spokesperson for one of the major insurance companies said we could expect an increase of up to 10 per cent in motor insurance costs over the next 12 months. It is appropriate that the Minister of State with responsibility for the insurance industry, Deputy Rabbitte, is in the House.

There has been a dismal failure to tackle the underlying causes of escalating insurance costs. When young drivers seek premium quotations, the insurance companies do not want to see them. Young people in their early twenties have to go to work. They need driving licences and car insurance but they have to pay enormous sums for such cover. It is an area we have failed dismally to tackle and it needs to be tackled urgently. The increase we are talking about must be seen in that context.

Within the past ten days the Government decided on an alternative system for financing local authorities. It seems that motor taxation will be its principal source of revenue. It is not unreasonable to assume that the anticipated demand by local authorities for more revenue will lead to an increase in motor taxation. The motorists have had a bad fortnight. Deputy Leonard said that people in rural areas must pay increased water charges. They will now have to pay the increases in motor taxation and insurance premiums — we have not tackled the problems in the insurance industry — as a result of this budget.

I agree with the points made by Deputy Dermot Ahern and Deputy McGahon about this further imposition on the tobacco and cigarette industry, although it is no longer popular to defend that sector. It was an important industry in the Louth constituency because it was the backbone of the local economy. Although the numbers employed in it have declined, this provision will accelerate its demise.

Mr. O'Malley

I have no objection to Financial Resolutions Nos. 1 and 3 but I strongly object to Financial Resolution No. 2 which deals with motor fuel. In the age of global markets and with the imminence of economic and monetary union, it is more vital than ever that we maintain and improve the competitiveness of Irish industry. Private sector businesses, particularly in the exporting sector, generate the wealth which is needed to create jobs, to sustain our public services and to pay for improvements in our social welfare system. This budget does little to promote the competitiveness of Irish industry but the increase in duty on petrol and diesel is a particularly retrograde and unnecessary step. It imposes increased costs on virtually every firm in the country and makes it more expensive for Irish companies to do business.

It also imposes extra costs on private motorists. As far as they are concerned, what the Minister is giving with one hand he is taking away with the other. The same holds true for public transport users. An increase in fuel prices must inevitably translate into an increase in fares. At a time of record tax buoyancy, it seems incredible that the Minister for Finance should seek to impose an increase in indirect taxation in this vital and sensitive area which will have such an impact on competitiveness. The additional costs arising from this not alone affect our exporters but they also affect many companies that are competing with companies in Britain and elsewhere which are exporting into this country. The unnecessary raising of this tax must be condemned.

I ask the Taoiseach how he justifies this continuous imposition of tax increases every year on hydrocarbons, particularly petrol, diesel and heavy fuel oil which are essential to our competitiveness, when his Government refuses to increase taxation on drink. Is it because of the strength of the publican lobby? The publicans introduced their own budget in early December, which is a convenient time to do it. Strangely, every publican agreed on the same day at the same time to increase the price of drink by the same amount. I have no doubt it was just coincidence that 11,000 publicans had the same thought at the same hour on the same day and that it was not collusion or anything of that nature. It was not an illegal anti-competitive practice, as I am sure the Minister of State at the Department of Enterprise and Employment, Deputy Rabbitte, will assure the Taoiseach. Why were they allowed to introduce their own budget to pre-empt what might happen here tonight? Is that why it is not happening here tonight and why increases have been imposed on something which has a great effect on the competitiveness of Irish industry and, therefore, on employment? An increase in the excise duty on drink, particularly on spirits, has no effect on the competitiveness of Irish industry. It is ignored for some reason about which we can speculate.

Mr. McGahon

For health reasons.

Mr. O'Malley

I am not opposing Financial Resolution No. 1 because, apart from the fiscal benefits, there are valid reasons the duty on tobacco should be increased. However, they are equally valid as far as the duty on drink is concerned, particularly the duty on spirits. Nevertheless, drink is exempt every year under this Government. As far as tobacco is concerned, it is a matter of regret to me and to several Deputies who have spoken here tonight that we seem to have three markets in tobacco products: the official duty paid one, the official duty free one and the unofficial duty free one where the price level of vast numbers of cigarettes sold in this country is between the two. People get the wrong idea about the significance of duty because when they buy duty free tobacco products in official Aer Rianta duty free outlets, the profit margin is so enormous they think the duty is not as high as it is. The profit margin at duty free level in Aer Rianta shops in airports is disgracefully high; it is approximately 300 per cent. They can afford to profiteer like that because of the abnormally high level of duty.

It is regrettable that diesel and petrol are targeted and other things are ignored when it comes to increasing excise duty. I deplore both from a competitive and a health point of view the Government's choice of priorities. It is wrong and anyone who looks at the matter objectively knows it is wrong and damaging. The Revenue Commissioners and customs operate fairly and equitably. I cannot understand why they do not enforce the law against those who sell duty free products, particularly tobacco products. The law is not being enforced and it is widely known that it is flagrantly disregarded. I have considerable faith in the Revenue Commissioners, having pursued one area where a particular Department failed in its responsibility for certain activities while the Revenue Commissioners did not. This is why it disappoints me that duty free tobacco products are illegally sold so widely in this country.

The Government should rethink this matter. There are other ways of raising excise other than by making our already uncompetitive situation more so. One only has to look at personal taxation on both sides of the Border to realise that. The only reason we have retained thousands of jobs on this side of the Border is people are afraid to move North. If they were not afraid they would have left in their droves. Who would manufacture in Dundalk, with the tax rates imposed on their employees, if they could manufacture in Newry? If the IRA had sense, we could have a different situation to the one we have now. Advantage is being taken of that, particularly on hydrocarbons, which is one of the most vital areas where competitiveness arises.

Cecilia Keaveney

I also object to the price increases in petrol and diesel. I may repeat what has been said, especially in the contributions of other Deputies from Border counties, but it cannot be said often enough. People do not appreciate how we feel or understand what it is like to live close to the Border and the difficulties which arise. We are often told we are peripheral. Petrol stations in the Border areas have gone out of business because they were less competitive than those in Northern Ireland. Recently, they set up business again in places on the Border, such as Lifford or Muff. They are not only nice to look at, but also give employment. However, they are under threat from the increases in the budget.

The Taoiseach has been in Donegal and knows how far away it is from here. A car is not a luxury but is essential. I do not have to go beyond my home town to see this. The local ESB shop has been closed and it is necessary to travel a long distance to pay bills. People in the Moville area have to travel to court by car as the court cannot be accommodated there. What commitment is the Taoiseach giving to rural Ireland, especially to those in Donegal?

We need employment but this budget will not encourage its creation. Every big business in Donegal incurs high travel costs as it must travel long distances. Perhaps we would rely less on roads if we had pier development. We are looking to employment. Reported increases in employment made a big splash. However, in Inishowen, employment has decreased and unemployment has increased. Car owners who go to work are now being penalised, both those who are working in the county and those who are crossing the Border. What was in the budget today for the cross-Border worker? One of the biggest employers in my area is the fishing industry. Did we get big grants for renewing the fleet in this budget? No, we got fuel increases.

Donegal needs positive discrimination to maintain job creation, basic day-to-day living, existing employment and current competitiveness. It does not need the petrol increases of today, the threatened car tax increases promised down the line and the further increases already announced by insurance companies. If we do not get positive discrimination our livelihoods and businesses will be not only threatened but crippled. I ask the Taoiseach to rethink the increases in diesel and petrol prices.

Mr. Cullen

I remember this night last year when the same argument was made on hydrocarbons and petrol. We spoke about a 10p per gallon increase on petrol and we are, unfortunately, doing so again tonight. I know the Taoiseach may not like to listen to the argument but the Minister of State at the Department of Enterprise and Employment, Deputy Rabbitte, knows the one worry we have is our ability to maintain competitiveness within our economy. Whether the Government likes it or not, we have a structural problem, unlike all our EU partners, in that we are an island. We will always have a problem with transport costs in delivering our goods to the continent. In every report that has been written, it has been singled out as a cost which does not have to be borne on the goods of other countries in the EU. I cannot understand why we create our own artificial costs by imposing further penalties on the transport sector. It does not make sense.

It is not good enough for the Taoiseach to say that the differential between us and the UK is closer than it was because our transport costs need to be substantially lower than those of our competitors in Europe. It is not good enough to say that just because the margin of difference has declined in recent years we should clap ourselves on the back. Any company exporting from this country will speak easily and quickly about the costs that transport imposes on their competitiveness in the marketplace. Ireland does not have the road network which exists in many other European countries. I am glad to say our road network is improving but the cost of moving goods even within the island is substantially higher than in most EU countries because their transport systems are far more advanced than ours.

I wish to refer to the drinks industry. I cannot understand why the Government did not seize the opportunity to do something about the socalled soft alcoholic drinks available in the marketplace, hooch and hotshots. These drinks are not aimed at the mature drinker but at creating a new younger market of 15, 16 and 17 year olds. The alcoholic content of those drinks is substantially higher than most of the ordinary ales and beers. My view, which is probably extreme, is that they should not be on sale and should not be allowed in the marketplace.

The Taoiseach

Why? That would include bar mixers as well.

Mr. Cullen

The opportunity could have been used to impose a severe penalty and make these drinks expensive and out of the reach of young people, many of whom are not earning a penny. I feel strongly about this. The Government, the Minister of State, Deputy Rabbitte, and most Deputies would be aware of the problems that are beginning to emerge because of the availability of those products and the way they are targeted.

I cannot complain too much about the tobacco industry, being one of the few heavy smokers, non-tipped, left in this House. I sincerely hope the relationship between the Garda and the Revenue Commissioners can be improved in respect of the detection of non-duty products available in the market because, if what I am hearing is true — that the people who sell these products in the Dublin area have a real grip — it is inevitable they will flood the cities of Waterford, Limerick, Cork and Galway with their merchandise. Once the problem moves out of Dublin it will become unstoppable. I hope the right message will go out loud and clear from this House and that we can kill this market before it reaches a profitable level.

Mr. Connolly

I presume lubricating oil is included in the increases in petrol and diesel oil.

The Taoiseach

That is not so.

Mr. Connolly

Average costings will be increased by 10 per cent and those supplying goods to the various outlets will have to pass on the charges. Anyone who thinks otherwise is foolish. If one is in the business of supplying diesel oil and petrol one has to pass on the price increase. That is the rule of thumb in business. In this case transport costs will be increased by approximately 10 per cent and there will be a 6 per cent increase in insurance costs because of the high cost of claims. In other words, manufacturing and transportation costs will be substantially increased. I am concerned because the increased costs will be passed on to the consumer. Let there be no doubt about that, there will be substantial increases in transport costs which will be passed on. It will affect employers and employees. In my constituency many people travel up to 30 miles to and from their place of employment and they will incur substantial costs. Even allowing for the tax benefits they will receive there will be a clawback at the other end. My main concern is that transportation costs will be added to the cost of the goods.

I hope the Revenue Commissioners will have tighter controls over the tobacco industry because we are led to believe that tobacco and other products of that nature are sold illegally on the market.

Mr. Dempsey

It may not be politically correct to query the almost annual price increase in tobacco products. There is no cigarette factory in my constituency. We have had price increases in tobacco products every year since I came here, some savage and some not so bad. The conventional line of the Department and the Minister for Finance was that it was for health reasons and not to raise revenue. The Government always made the case that it was looking after the health of the nation and that that was its motivation in increasing the duty. To a certain extent I take that with a grain of salt. The statistics for the past eight or ten years indicate that if the policy was to curtail the consumption of cigarettes and tobacco products generally it has failed miserably. It has succeeded in enriching the State coffers but there is evidence to suggest an ever increasing consumption of cigarettes and tobacco products; unfortunately the evidence shows the increased consumption is greatest among younger people. When we increase the cost of cigarettes we give ourselves a pat on the back in the hope that the health of the nation will be improved. We have allowed that to blind us to the fact that that policy alone, as a means of curtailing the consumption of tobacco products, has failed miserably and it is about time we examined it further.

I wish to refer to Financial Resolution No. 2 which concerns price increases of petrol and diesel. I will not repeat what has been said by Deputies Keaveney and McDaid in relation to the effect this will have on Border counties. This motion is another example of the anti-motorist bias of the Government which we have seen on a number of occasions. If returned to power this Government will impose tolls on the C ring road and on the Lee tunnel. That is clear because it voted against the motion we tabled. This resolution will take £37 million out of the pockets of motorists, a sector of the community which already pays £1.7 billion to the Exchequer in taxes. Water charges have been abolished but, despite the impression being given by Deputies opposite, they will have to be paid for. This increase is the first instalment in the payment for the abolition of water charges. Taxpayers will pay a second instalment of £78 million next year when motor tax will be increased by 3 per cent and a further instalment of £156 the following year. They will have to pay a bill of £270 million over the next two years. There is always one measure in a budget which rebounds badly on the Government and I predict that motorists will not accept this increase.

The Taoiseach

If the Government is anti-motorist, why are there more new cars on the road under this Government than under any previous Government? There is every sign that more new cars are being sold under this Government than under any previous Government.

(Interruptions.)

The Taoiseach

The reason is that the Government is in favour of people spending their money in a way which improves their lives. The Government has also been able to deal successfully with the problems of traffic which were created in the first instance because of the increased number of people who were in a position under this Government to buy a car. These traffic problems have now been overcome because the Government, unlike the Deputies opposite, is pro motorists.

Mr. Dempsey

I am glad the Taoiseach took our advice of 4 November.

The Taoiseach

One Opposition Deputy said the Government was anti-Dublin, while others said we were anti-rural, anti-south and anti-north. Some Deputies are wont to say something like that.

Mr. Dempsey

The electorate will tell the Taoiseach the position.

The Taoiseach

The debate is perhaps not as serious in the minds of some speakers as it ought to be.

I wish to reply to the substantial points made during the debate. The first concerns the street selling and smuggling of cigarettes. Deputy O'Dea raised questions on this matter to which I would like to reply. During the past 12 months there has been a very substantial increase in the level of enforcement of the law on illegal cigarette selling. This was acknowledged by Deputy Ahern, the only Deputy to do so; others tried to pretend that nothing had happened during the past year. I would like to give evidence of this increased enforcement.

In 1995 there were only five proceedings instituted for cigarette smuggling, while in 1996 50 prosecutions were instituted for the same offence. Of the 50 prosecutions instituted, 17 resulted in convictions, 14 were adjourned and 24 are awaiting hearing. This explains the statistics quoted by Deputy O'Dea who seemed to suggest that 50 proceedings were instituted and there were only 17 convictions.

Mr. O'Dea

What penalties were imposed?

The Taoiseach

The rest of the cases have either been adjourned or are awaiting hearing.

On the question of the street selling of cigarettes, in 1995 no proceedings were instituted whereas in 1996 81 proceedings were instituted. To date there have been 11 convictions, three cases have been adjourned and 67 cases are awaiting hearing.

Mr. O'Dea

The tip of the iceberg.

The Taoiseach

The bulk of the cases have not yet come to court and, therefore, the statistics quoted by Deputy O'Dea deserve to be qualified.

It is fair to say that this indicates significant action in regard to illegal cigarette selling. The increase of 1 per cent in duty paid cigarette sales over the past 12 months also indicates that people are buying duty paid cigarettes in increased volumes.

A number of Deputies referred to the excise duty on petrol. The excise duties in the UK budget were greater than the excise duties in our budget. The differential in favour of the Republic has been improved as a result of the two budgets rather than disimproved. However, having listened to the Deputies opposite one would not think this was the case.

Mr. Cullen

That was not the argument.

Mr. Dempsey

Has the Taoiseach heard of peripherality?

An Ceann Comhairle

Let us hear the Taoiseach without interruption.

The Taoiseach

Deputy McDaid threw some light on the matter when he referred to the possible misleading nature of comparisons of petrol prices in, say, Portrush and Ballymena with those in Muff or Carrickmacross. He said that the relevant price to quote is the one in the contiguous town on the other side of the Border where a more competitive approach is adopted to petrol sales in order to win custom from this side of the Border than might apply in Ballymena or Portrush which are distant from the Border. This is true, but the same considerations also apply on this side of the Border. If people can compete in Keady they can also compete in Carrickmacross; if people on the other side of the Border can try to win business then people on this side of the Border can also do so. There is nothing to stop them from doing so, particularly as the differential in duty in this budget combined with the British budget has moved in favour of petrol sellers on this side of the Border. One of the problems may be that because petrol prices were traditionally higher here than north of the Border there was a habit on the other side of the Border of marketing petrol with a view to winning custom from the South. That habit may not have developed to the same degree on this side of the Border.

There are trends in the petrol retailing business which may be of interest to Deputies. In order to attract people to large shopping centres in some cities and towns operators sell petrol at a very low price with virtually no profit. This is apparently happening in Belfast and it draws people to that area. If it happened in Dublin where the retail sector is much more dynamic than it is in Belfast it could have the net effect of drawing custom away from smaller stations. Many of the remarks made by Deputies have more to do with the problems of smaller petrol stations, regardless of whether they are on the Border, comparative to larger distribution centres.

An Ceann Comhairle

As it is now 9 p.m. I am required to put the following question in accordance with an Order of the Dáil of this day: "That Financial Resolutions Nos. 1, 2 and 3 are hereby agreed to."

Question put.

The Dáil divided: Tá, 78; Níl, 69.

Tá

• Ahearn, Theresa.
• Allen, Bernard.
• Barrett, Seán.
• Bell, Michael.
• Bhamjee, Moosajee.
• Bhreathnach, Niamh.
• Boylan, Andrew.
• Bradford, Paul.
• Bree, Declan.
• Broughan, Thomas.
• Browne, John (Carlow-Kilkenny).
• Bruton, John.
• Bruton, Richard.
• Burke, Liam.
• Burton, Joan.
• Byrne, Eric.
• Carey, Donal.
• Connaughton, Paul.
• Connor, John.
• Costello, Joe.
• Crawford, Seymour.
• Creed, Michael.
• Crowley, Frank.
• Currie, Austin.
• Deasy, Austin.
• Deenihan, Jimmy.
• Doyle, Avril.
• Dukes, Alan.
• Durkan, Bernard.
• Ferris, Michael.
• Finucane, Michael.
• Fitzgerald, Brian.
• Fitzgerald, Eithne.
• Fitzgerald, Frances.
• Flaherty, Mary.
• Flanagan, Charles.
• Gallagher, Pat (Laoighis-Offaly).
• Gilmore, Eamon.
• Harte, Paddy.
• Higgins, Jim.
• Higgins, Michael.
• Hogan, Philip.
• Howlin, Brendan.
• Kavanagh, Liam.
• Kemmy, Jim.
• Kenny, Seán.
• Lowry, Michael.
• Lynch, Kathleen.
• McCormack, Pádraic.
• McDowell, Derek.
• McGahon, Brendan.
• McGinley, Dinny.
• McGrath, Paul.
• McManus, Liz.
• Mitchell, Gay.
• Moynihan-Cronin, Breeda.
• Mulvihill, John.
• Nealon, Ted.
• Noonan, Michael (Limerick East).
• O'Keeffe, Jim.
• O'Shea, Brian.
• O'Sullivan, Toddy.
• Pattison, Séamus.
• Penrose, William.
• Rabbitte, Pat.
• Ring, Michael.
• Ryan, John.
• Ryan, Seán.
• Shatter, Alan.
• Sheehan, P.J.
• Shortall, Róisín.
• Spring, Dick.
• Stagg, Emmet.
• Taylor, Mervyn.
• Timmins, Godfrey.
• Upton, Pat.
• Walsh, Éamon.
• Yates, Ivan.

Níl

• Ahern, Bertie.
• Ahern, Dermot.
• Ahern, Michael.
• Ahern, Noel.
• Andrews, David.
• Aylward, Liam.
• Brennan, Matt.
• Connolly, Ger.
• Coughlan, Mary.
• Cowen, Brian.
• Cullen, Martin.
• Davern, Noel.
• de Valera, Síle.
• Dempsey, Noel.
• Doherty, Seán.
• Ellis, John.
• Fitzgerald, Liam.
• Flood, Chris.
• Foley, Denis.
• Fox, Mildred.
• Geoghegan-Quinn, Máire.
• Harney, Mary.
• Haughey, Seán.
• Hughes, Séamus.
• Jacob, Joe.
• Keaveney, Cecilia.
• Kenneally, Brendan.
• Keogh, Helen.
• Killeen, Tony.
• Kirk, Séamus.
• Kitt, Michael.
• Lawlor, Liam.
• Lenihan, Brian.
• Leonard, Jimmy.
• Brennan, Séamus.
• Briscoe, Ben.
• Browne, John (Wexford).
• Burke, Raphael.
• Byrne, Hugh.
• Callely, Ivor.
• Clohessy, Peadar.
• Martin, Micheál.
• McDaid, James.
• McDowell, Michael.
• Moffatt, Tom.
• Molloy, Robert.
• Morley, P.J.
• Moynihan, Donal.
• Nolan, M.J.
• Ó Cuív, Éamon.
• O'Dea, Willie.
• O'Donnell, Liz.
• O'Donoghue, John.
• O'Hanlon, Rory.
• O'Keeffe, Batt.
• O'Keeffe, Ned.
• O'Leary, John.
• O'Malley, Desmond.
• O'Rourke, Mary.
• Power, Seán.
• Quill, Máirín.
• Ryan, Eoin.
• Smith, Brendan.
• Smith, Michael.
• Treacy, Noel.
• Wallace, Dan.
• Wallace, Mary.
• Walsh, Joe.
• Woods, Michael.

Tellers: Tá, Deputies J. Higgins and B. Fitzgerald; Níl, Deputies D. Ahern and Callely.

Question declared carried.