Thursday, 25 October 2018

Ceisteanna (4)

Danny Healy-Rae

Ceist:

4. Deputy Danny Healy-Rae asked the Minister for Finance his plans to reduce the take on VAT and excise duties in view of the fact that fuel and motoring costs have risen dramatically since the commencement of 2018. [44241/18]

Amharc ar fhreagra

Oral answers (6 contributions) (Ceist ar Finance)

Fuel and other motoring costs have again been rising significantly in recent times. People in rural Ireland, especially Kerry, are hurting from the extra costs that they must bear. Wages and social welfare payments have not increased to meet their costs. In Kerry and places like it, one cannot go anywhere without a car because there is no public transport.

I thank the Deputy for his question. The point he is making to me about the rising cost of fuel gives a different perspective to the debate that is under way on carbon taxation. The reality is that some forms of fuel are increasing in price. Between January and September of this year, the average prices per litre of petrol and diesel rose by approximately 7 cent and 12 cent, respectively. The prices of these fuel forms are determined by a number of factors from tax to the price of the raw materials and exchange rates. The price of fuel on the forecourt is set by the individual retailer. The current excise rates are 58.7 cent on a litre of petrol and 47.9 cent on diesel. These rates have been in place since 2012 and are kept under review. In budget 2019, I made no changes to these rates and have no intention of changing them further as part of this year's budget.

As was noted in the tax strategy group's environmental paper, the Irish rate of excise on petrol is the 12th highest in the EU while diesel is the tenth highest. They are lower than many of our neighbouring countries.

The Deputy will be aware that, for large-scale diesel consumers, the diesel rebate scheme was introduced in 2013. It offers a partial excise to qualified operators and begins when the price reaches €1.23 per litre, gradually rising to a maximum rebate of 7.5 cent when diesel reaches €1.54 per litre.

The first thing I have to point out is that people with ordinary cars cannot claim back the VAT or any rebate on the diesel. They have no other way of going to work and people have to travel long distances to work. Mothers have to bring children to schools, hospitals and elsewhere. Yes, hauliers can get back the VAT. The cost is so exorbitant. Petrol is €1.45 or €1.46 at the pump and there is 58.7 cent added on to that for excise and carbon. That is very significant. Another 47 or 48 cent is added on to the price of €1.40 for diesel. I am asking if there is any scope for manoeuvre to help these people in rural places who have no other way to travel to and from their homes other than by motor car. They have no rebate or return of VAT available to them.

I fully understand the point the Deputy is making. I understand that for many of his constituents, the car is the only form of transport available to them. I understand that public transport is not always the option it would be for those in our larger cities and towns, whether it be the bus or the train. I know that is not always available. I also acknowledge that our total tax take from fuel is already very high. For example, the contribution that is made from taxation to the pricing of fuel equates to about 60% of the price of a litre of petrol and about 54% of the price of a litre of diesel. While I am not in a position to say that I will be reducing the taxes in the way the Deputy wants me to do, it is in recognition of the issue he has raised that I decided not to change those taxes in this year's budget.

I have to thank the Minister and his Government for not raising the taxes any further. We recognise that the price of oil is going up worldwide. Heating oil is up by 30% and fuel costs generally are up somewhere around 25%. It is my duty to represent the people who are hurting as a result of the exorbitant cost of the fuel they must use to get to work and to do their everyday business. They are really hurting. It is not wrong of me to ask the Minister and the Government to do something to help those who do not have public transport and have no other means of transport other than their motor car. Young and old are affected and with the cost of insurance and everything else it is practically impossible. Many families that need a second car are losing the second car because they cannot afford it with all the costs, and wages and social welfare have not gone up to meet those costs.

It is indeed the Deputy's duty to represent his constituents and it is in cognisance of the points he is making that I made the decision to make no further change to the tax rates that are applicable to the price of fuel. A general point I would make in the debate on carbon taxation that I know is going to ensue from decisions I made on budget day is that if the contention is - and I accept it - that price does change behaviour, if the price of fuel is going up in the way it has in the past, what impact will that of itself have on usage of fuel and on transport choices? The difficulty the Deputy is raising with me is that the transport options available to many of his constituents are different from the options that would be available to those in larger cities and larger towns. As I said, while I am not in a position to announce the reduction the Deputy is looking for, we will be seeing further investment in public transport. The Local Link scheme that has been implemented by the Minister of State, Deputy Griffin, is going to work very well and I am committed to supporting him in those kind of projects in the coming period.