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Dáil Éireann díospóireacht -
Wednesday, 3 Dec 2003

Vol. 576 No. 2

Financial Resolutions 2003. - Financial Resolutions Nos. 3 and 4 (Resumed).

Debate resumed on the following motions:
Financial Resolution No. 3: Excise (Mineral Oils)
(1) THAT for the purposes of the tax charged by virtue of section 95 of the Finance Act 1999 (No. 2 of 1999), that Act is amended, with effect on and from 4 December 2003, by substituting the following for Schedule 2 to that Act, as amended by section 91 of the Finance Act 2003 (No. 3 of 2003):
"SCHEDULE 2
Rates of Mineral Oil Tax

Description of Mineral

Rate of Duty€

Light Oil:

Leaded petrol

553.04 per 1,000 litres

Unleaded petrol

442.68 per 1,000 litres

Super unleaded petrol

547.79 per 1,000 litres

Aviation gasoline

276.52 per 1,000 litres

Heavy Oil:

Used as a propellant with a maximum sulphur content of 50 milligrams per kilogram

368.05 per 1,000 litres

Other heavy oil used as a propellant

420.44 per 1,000 litres

Kerosene used other than as a propellant

31.74 per 1,000 litres

Fuel oil

13.45 per 1,000 litres

Other heavy oil

47.36 per 1,000 litres

Liquefied Petroleum Gas:

Used as a propellant

53.01 per 1,000 litres

Other liquefied petroleum gas

18.15 per 1,000 litres

Substitute Fuel:

Used as a propellant

368.05 per 1,000 litres

Other substitute fuel

47.36 per 1,000 litres

Like my colleagues, I strongly oppose Financial Resolution No. 3 and give grudging respect to Financial Resolution No. 4. Like others in the House, I am a sinner in that I smoke. It has positive and negative aspects. I will not go into all the agitation generated on the other side of the House by smoke and mirrors and new rules and regulations. I hope this measure, when passed, will ease the tension on the Government benches.

I support the views of my colleagues on diesel and petrol. This measure in Resolution No. 3 will seriously damage the competitiveness of the economy. These extra charges are on top of the €3.5 billion which motorists contribute to the Exchequer annually. They will increase the amount by another €245 million. That is without taking into account the revenue generated from parking fees, parking fines and clamping, about which I have tried and failed to obtain information by way of parliamentary questions over the past 12 months. There is no question that the sum of money involved is substantial. These figures should be available to the House but are not, despite my best efforts. It is not possible in our economy to impose the penalties that are now appearing on a regular basis on road transport. We cannot shift everything to the rail service, nor can we fly everything. We must have provision for road transport in the economy. I register my protest and that of my colleagues about this resolution.

What will be the impact of the increase in the price of cigarettes on smuggling and illegal activities across the Border? Has any analysis been done? In recent years cigarette prices have increased dramatically in accordance with the public health policy of the Government and its aim to increase the price of cigarettes to ensure the cost of taking up smoking is prohibitive at an early age. Has a study been done to discover whether there is a concomitant increase in smuggling activity when the price of cigarettes is raised?

Deputy Joe Higgins referred to the increase in the price of cigarettes. I am sure he does not think we should encourage young people to take up smoking.

On the contrary—

His policy would certainly encourage them to do that.

No, it would not.

It has been proven that an increase in the price of cigarettes automatically has an impact on their consumption. That should be welcomed by everyone in the House. The Deputy should not sit up there pontificating about the impact of the price increases on young people and the negative impact smoking can have on their health.

It was Fianna Fáil's failure over decades that caused the current problems.

An Leas-Cheann Comhairle

Order, please.

The Deputy's policies have failed over many generations. One need only go as far as Russia to find that out.

The Deputy should go and learn some history. They killed the likes of me in Russia.

An Leas-Cheann Comhairle

Order, please.

Stalin killed the likes of me.

Is the Deputy implying that Stalin had some good points?

It is a point in his favour.

The Deputy's efforts to redeem Stalin are interesting.

Deputies have been somewhat disingenuous on the issue of excise duty on fuel oils. As has been outlined, this is a revenue generating measure which will fund increases in social welfare and the €25,000 extra for people with disabilities and those with special educational needs. There have been few revenue-raising measures in the budget. Most of its measures have been revenue-decreasing, such as the increases in tax credits and so on. This measure is welcome because it will allow us to fund many of the projects outlined in the budget today.

The Green Party will not oppose either of these resolutions, but we have no intention of adding to the compliant majority of the Government in this House.

The Deputy is a bit radioactive at the moment.

It is the Minister's colleague behind him.

On the proposal for excise duties on fuel, we do not accept the arguments about competitiveness on the grounds that our petrol is cheaper than that of our nearest competitor and many of our other competitors. Fuel is certainly more expensive here than in the USA, but that is a different climate. There is also a problem in terms of the cost of fuel in the Border counties, but that is a failure of price control. Petrol prices in the Border regions are 10 cent more per litre than in the rest of the country and they are pegged not to petrol costs in the rest of the country but as near as they can get to petrol costs in Northern Ireland. The Government has failed to ensure there is not widespread profiteering in the Border region on the cost of petrol.

Is that the official or the unofficial market?

On the second motion dealing with excise duties on tobacco products—

How expensive would the Deputy like petrol to be?

That is the reality.

Green petrol—

The profiteering is on the part of the retailers. It has nothing to do with excise duties.

The ratio of roads expenditure to public transport expenditure is 3:1, yet the Labour Party supports the resolution.

How dear does the Deputy want petrol to be?

The Labour Party wants roads everywhere. It has no environmental credentials.

Where is the alternative?

We must go on. We only have two minutes. Before we leave the question of environmental taxes and petrol—

The Deputies are very sensitive about this.

The reality is the State is not getting this money. The retailers and the Border regions are getting this money. The reality is also about environmental taxes. Ireland has fewer environmental taxation measures than any other country in the OECD. There are only six, which puts Ireland in the same class as the United States and Japan. The average in other European countries is 20 to 30. This is something the Government has again shied away from in this budget. On the question of excise duties on cigarettes, anyone would approve of this as a public health measure. It has to be accepted that the Office of Tobacco Control has said that price elasticity as regards cigarettes indicates that not one penny would be lost to the Exchequer if there was a doubling in the current price of a packet of cigarettes. The Government can only be taken seriously in terms of a public health argument when the money being taken in by the Exchequer in a given year is less than what was taken the year before. Otherwise, every increase in terms of this particular excise duty will be just to bring money into the Exchequer. The public health argument is bogus. In terms of the rate of inflation and the cost of living index arguments have been made by the Minister for Health and Children, Deputy Martin, and the Minister for Finance, Deputy McCreevy, that this should be taken out of the basket of cost of living measures. I would argue against that. It is an unfortunate fact of life that people on lower income levels tend to smoke more. If there is to be a fair recognition of what the true cost of living is for many families in our State, it must be left within the basket, even though measures such as this will add significantly to the cost of inflation.

I would like to reply to some of the main points raised by Deputies on the resolutions under discussion. Deputy Noonan asked what the effect on the CPI was and what the yield would be. I propose to give him the figures. As regards tobacco the yield in a full year will be €59.7 million and the effect on the CPI will be 0.187%. In the case of auto diesel the yield in a full year is €94.8 million and the effect on the CPI is 0.029%. On petrol the yield in a full year is €88.5 million and the CPI effect is 0.155%. The overall effect on the CPI is 0.371%. We estimate that next year the inflation rate will be no greater, on average, than 2.5% and hopefully substantially lower than that.

As regards seizures – the black economy on tobacco – customs officials have had considerable success in this area. To date, seizures are running at around 40 million cigarettes and 2.5 tonnes of tobacco. The monetary effect of that is substantial: last year it was worth €11.736 million and the excise value of that was €9.331 million. That was on a quantity of 41.108 million. As regards convictions and prosecutions, in 2001 there were 37 convictions, in 2002 there were 57 and 56 to date in 2003. That is in respect of smuggling and the possession of illegal cigarettes.

I think Deputy Ó Caoláin raised the issue of putting up the price of drink.

It was Deputy Crawford. I knew it was somebody from around the Border area. Many people work in the drinks industry. The consumption of spirits is down 18% this year and beer is down by 3%. The last thing the industry and its employees need is further increases in excise duty.

That is because of the cost of it.

Many of the measures introduced to enforce the drink-driving laws are playing a part.

Question put: "That Financial Resolutions Nos. 3 and 4 be agreed."

Ahern, Dermot.Ahern, Michael.Ahern, Noel.Andrews, Barry.Ardagh, Seán.Aylward, Liam.Blaney, Niall.Brady, Johnny.Brady, Martin.Brennan, Seamus.Browne, John.Callanan, Joe.Callely, Ivor.Carey, Pat.Carty, John.Cassidy, Donie.Collins, Michael.Cooper-Flynn, Beverley.Coughlan, Mary.Cowen, Brian.Cregan, John.Cullen, Martin.Curran, John.Davern, Noel.Dempsey, Noel.Dempsey, Tony.Dennehy, John.Devins, Jimmy.Ellis, John.Fahey, Frank.Finneran, Michael.Fitzpatrick, Dermot.Fleming, Seán.Fox, Mildred.Gallagher, Pat The Cope.Glennon, Jim.Grealish, Noel.Hanafin, Mary.Harney, Mary.Haughey, Seán.Hoctor, Máire.Jacob, Joe.Keaveney, Cecilia.Kelleher, Billy.

Kelly, Peter.Killeen, Tony.Kirk, Seamus.Kitt, Tom.Lenihan, Brian.Lenihan, Conor.McDaid, James.McDowell, Michael.McEllistrim, Thomas.McGuinness, John.Martin, Micheál.Moloney, John.Moynihan, Donal.Moynihan, Michael.Mulcahy, Michael.Nolan, M. J.Ó Cuív, Éamon.Ó Fearghaíl, Seán.O'Connor, Charlie.O'Dea, Willie.O'Donnell, Liz.O'Donoghue, John.O'Donovan, Denis.O'Flynn, Noel.O'Keeffe, Batt.O'Keeffe, Ned.O'Malley, Fiona.O'Malley, Tim.Parlon, Tom.Power, Peter.Power, Seán.Roche, Dick.Ryan, Eoin.Sexton, Mae.Smith, Brendan.Smith, Michael.Treacy, Noel.Wallace, Dan.Wallace, Mary.Walsh, Joe.Wilkinson, Ollie.Woods, Michael.Wright, G. V.

Níl

Allen, Bernard.Breen, James.Breen, Pat.Broughan, Thomas P.Bruton, John.Burton, Joan.Connaughton, Paul.Connolly, Paudge.Costello, Joe.Coveney, Simon.Cowley, Jerry.Crawford, Seymour.Crowe, Seán.Deenihan, Jimmy.Durkan, Bernard J.English, Damien.Ferris, Martin.Gilmore, Eamon.Gregory, Tony.Harkin, Marian.Hayes, Tom.

Healy, Seamus.Higgins, Joe.Higgins, Michael D.Hogan, Phil.Howlin, Brendan.Kehoe, Paul.Kenny, Enda.Lowry, Michael.Lynch, Kathleen.McCormack, Padraic.McGinley, Dinny.McGrath, Finian.McGrath, Paul.McHugh, Paddy.McManus, Liz.Mitchell, Gay.Mitchell, Olivia.Morgan, Arthur.Moynihan-Cronin, Breeda.Murphy, Gerard. Naughten, Denis.

Níl–continued

Neville, Dan.Noonan, Michael.Ó Caoláin, Caoimhghín.Ó Snodaigh, Aengus.O'Dowd, Fergus.O'Keeffe, Jim.O'Shea, Brian.O'Sullivan, Jan.Pattison, Seamus.Penrose, Willie.Perry, John.

Quinn, Ruairí.Rabbitte, Pat.Ring, Michael.Ryan, Seán.Sherlock, Joe.Shortall, Róisín.Stagg, Emmet.Stanton, David.Timmins, Billy.Upton, Mary.Wall, Jack.

Tellers: Tá, Deputies Hanafin and Kelleher; Níl, Deputies Durkan and Stagg.
Question declared carried.
Barr
Roinn