Vol. 527 No. 2
42 Mr. Durkan asked the Minister for Finance if any actions taken in the course of the last budget, or since, have had an impact on the rate of inflation; the precise nature of such effect; and if he will make a statement on the matter. [27951/00]
In framing last year's budget the Government set out to achieve a number of objectives. These included sustaining social partnership, tackling social priorities and addressing infrastructural problems, while pursuing sensible budgetary policies. A balance was struck between these competing objectives. I am happy that the correct balance was attained and that we met our key objectives while minimising the impact on domestic demand and price pressures. In particular, the budget helped to support social partnership, which is the best way to maintain price and wage stability and to sustain growth.
Given the open nature of the Irish economy, and the difficulties in quantifying the actual inflation impact of different budgetary measures, it is not possible to precisely determine the impact of the last budget on inflation. However, it is possible to measure the impact of the decision to increase excise duties on tobacco for health promotion reasons. It is estimated that this added 0.8% to the Consumer Price Index.
In response to the rise in inflation this year, the Government implemented a number of measures in June. The latest indications suggest that these measures are having a positive impact.
