Dáil Éireann Debate, Tuesday - 17 February 2004
138 Mr. Durkan asked the Minister for Finance the extent to which tax or excise duties imposed in the budget are affecting inflation and ultimately economic competitiveness when compared with other EU and non EU states; and if he will make a statement on the matter. [4804/04]
Amharc ar fhreagraIn this year's budget the goal of keeping inflation low took precedence and I made only limited changes to indirect taxes and excises. The effect of the indirect tax and excise changes will add less than 0.4% to the consumer price index. These changes will bring in €243 million in additional revenue, which is needed to fund public services.
Our rate of inflation moderated significantly over the course of 2003 and continues to do so. Inflation in January this year, as measured by the consumer price index, fell to 1.8%, its lowest level since October 1999. HICP inflation — the standardised measure for the EU — fell to 2.3% in January compared with a euro area average of 2.0%. This is the smallest differential with the euro area average since the beginning of monetary union. When compared to our major trading partners in December 2003, the rate of inflation measured 1.9% in the United States and 2.8% in the United Kingdom, compared with a rate of 1.9% here.
Securing the competitiveness which has been so instrumental to our economic development, and thereby safeguarding jobs, is a key priority for this Government. The recent strengthening of the euro and its negative impact on our competitiveness further emphasises the need to keep domestic costs down.
