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Seanad
‹ Order of Business

Budget debate and VAT rate

Summary

Senator O’Brien seeks proper budget discussions and urges retention of the 9% hospitality VAT rate, which others praise while awaiting the budget.

If so, it will afford us an opportunity to discuss the forthcoming budget with him. The debate yesterday on disabilities was useful as we were able to outline to the Minister the various areas we want protected. That was in advance of the budget, and the Minister of State, Deputy Jan O'Sullivan, committed to bringing the points raised back to the Government. It shows that the budgetary process has not changed. If anything, it is more controlled than ever by the four members of the Economic Management Council. We have not had a proper debate, with the exception of the debate on the Pathways to Work scheme with the Minister for Social Protection, Deputy Joan Burton, last night, which was useful. We have not set up a schedule for discussing the various areas of expenditure and putting forward the views of the Seanad on options and alternatives to the Government. I get a sense from speaking to colleagues in the other House that even those on the Government side have no idea what is being discussed. The Cabinet met earlier in the week for one hour, two weeks in advance of the budget, and by all accounts the budget was not even discussed.

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The Senator is well informed.

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The Senator is more interested in the Cabinet.

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It is a matter of concern that even the Cabinet is not discussing the budget with only about two weeks to go, and that we have not had structured debates in the House. If the Minister, Deputy Ruairí Quinn, comes to the House today, I will use the opportunity to impress upon him the importance of not increasing the pupil-teacher ratio in primary schools. That is vital.

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David P.B. Norris Senator David Norris Independent

One can guarantee there will be no bad news before the referendums.

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What is the Government's position? It is clear the process in both Houses for preparing for the budget is wrong. We have heard indications through the media from the Minister for Finance, Deputy Michael Noonan, that he will increase the VAT rate to 13.5% for the hospitality and food sector, but there is no debate on it. One initiative the Government took, which I welcomed at the time, was the reduction in the rate to 9%. It actually worked, for which I commend the Government. It has created in the order of 15,500 jobs in the hospitality sector but we have had no debate on the issue. With that in mind, I propose an amendment to the Order of Business - that the Minister for Finance or the Minister of State, Deputy Brian Hayes, come to the House for one hour to allow us a debate in order that we may try to elicit from him whether the Government proposes to increase the VAT rate to 13.5%. We have plenty of time as we are scheduled only to debate tackling bullying in schools. My Fianna Fáil colleagues and I contend that the reduction in the VAT rate for the hospitality sector was a good move from Government. We welcomed it at the time and it should be retained.

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I laud some of the comments by Senator Darragh O'Brien regarding the 9% VAT rate for the tourism sector. The matter was debated in the other House yesterday afternoon and Deputy Brendan Griffin from Kerry, Deputy John Paul Phelan from Kilkenny and Deputy Derek Nolan from Galway took part in an engagement to which the Minister for Finance responded.

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What did he say?

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We will have to wait for the budget on 15 October.

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What did he say yesterday?

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I do not have it verbatim.

I wish to welcome a few other issues. The Constitutional Convention is meeting this weekend to discuss the possibility of allowing votes to our emigrants in presidential elections.

I compliment Senator Lorraine Higgins on her Adjournment matter regarding Arthur's day. Arthur's day is a mixed blessing. I hope people enjoy it sensibly while lauding the spirit of what she has to say.

I am sure we all welcome the €770 million aid tranche and the 11th review from the IMF. The economy is now formally out of recession.

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It is not aid; it is a loan.

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I said the aid tranche. Let us give it its proper title. Matters are fragile and we should not flinch, but we are set fair. As I have often said, let us be calm and cautious.

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What if one owes the banks?

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The Senator should be Taoiseach.

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