Dearey warns against proposed Fine Gael VAT Increase

Senator Mark Dearey has warned that the Fine Gael proposal to increase the top rate of VAT to 23% could prove fatal for struggling border towns.

"We saw the damage done in Dundalk by the half percent Brian Lenihan added in the October 2008 budget. It might have seemed small at the time but it affected consumer behaviour and made it more difficult to present a value for money message in Co. Louth. To wilfully open a wide gap in the VAT rate with Northern Ireland to 3% just when the two have so closely aligned would be crazy. It indicates to me a basic lack of awareness in Fine Gael tax policy of the need for measures that help us compete with the North. It's worth remembering that the Minister admitted his increase was a mistake. This mistake cost €700 million in just a short period of time. I dread to think what an increase to 23% between now and 2013 will cost Ireland and towns adjacent to the Border in particular."

Senator Dearey says that no such tax measure is being contemplated by the Green Party.

"I raised the matter directly by phone with Minister Lenihan in December and urged him not to tamper with the VAT rate. Neither will we. This proposal is not a progressive measure and disproportionately affects low income families. The Fine Gael proposal to reduce the lower rate on services is welcome but cannot be funded on the basis of drastic increases on the rate charged for goods. The towns and villages of Louth will end up paying for it and it will create more unemployment in the retail sector. I believe the Fine Gael candidates, Fergus O’Dowd and Peter Fitzpatrick need to say clearly how they view this measure."