Some 63 days ago I said to the Taoiseach that budget 2022 must be different. I pointed out that we had a once-in-a-generation opportunity to restructure our economy. Sadly, that did not happen. Budget 2022 was just a little bit for everyone. The families who are just over the income thresholds for various State supports have again been forgotten. These are the hard-working families, the so-called squeezed middle, who pay for everything and who have remained invisible when it comes to State supports because they may be just a few euro, or sometimes just as little as €1, over some arbitrary income threshold. Take childcare as an example. It is one of the challenges faced by many of the families in question. An average family spends 12% of its disposable income on the care of a three-year-old child. That is, of course, if it is lucky enough to be able to secure a childcare place. While the budget 2022 childcare changes are welcome, the families will see an average disposable income gain of 0.2%, according to the ESRI. However, low- or middle-income families will actually lose part of their subsidy due to the freezing of the childcare income thresholds for 2022.

At the other end of the age spectrum, the story is not much better. Take the case of Stephen, for example. His father is a school caretaker and his mother is a school cleaner. Stephen, because he earned an extra €1,000 from his part-time job just to be able to afford to go to college, ended up €2,500 down as the extra income brought him over the SUSI income threshold. Budget 2022 increased the SUSI grant thresholds for the first time in a decade but this will do little to alter the trend we have seen over the past six years, which shows that while student numbers have risen by more than 17%, the number of students in receipt of the SUSI grant has fallen by 6%. I am afraid that the €200 increase to the grant next year will just about belatedly cover the increasing cost of energy, and little else.

The point I am making is that, by the end of December, the invisible middle – the people who get up early in the morning, who keep the doors of our businesses and services open and who pay their taxes every week, fortnight or month – will, because they do the extra hour of overtime, find themselves worse off for working hard, just like Stephen. That is why I believe the Government must restructure our whole economy.

There is a need, as we emerge from Covid, to restructure the economy. That is why the economic recovery plan and national development plan focus so strongly on the digitalisation and digital transformation that are occurring and will occur here and globally. There is also a focus on the green economy, through significant investments in areas such as public transport and retrofitting, and on the jobs that will be created in the retrofitting sector and a range of others related to the green economy, where thousands of jobs wait to be developed. For example, there will be jobs associated with offshore wind generation in terms of the development of ports in various areas. That is how I look at the restructuring of the economy.

I take the Deputy’s point on the necessity to improve income thresholds and increase them in a number of categories, one being local authority housing. This has to be done along with other reforms – there is a review under way – and along with addressing interlocking issues to do with housing more generally. For the first time in a long time, the Government decided to extend the SUSI grant, improve the income threshold and increase the adjacent rate. This will help thousands of students. I would like to go further in respect of that.

On healthcare, we took a number of steps in the budget, including, for example, the reduction of the drugs payment scheme threshold. We made it more favourable for hard-pressed families in respect of prescription charges. Regarding universal healthcare, there was a significant move in the budget, including through the extension of free GP access to children. We would like to do more in the next budget. In the area of health, in particular, and in higher education and education more generally, we want to do more. There was a tax package of about €520 million, which is of value. It is not enormous, and I am not going to pretend it is, but at least it is an additional contribution to people’s take-home income.

The biggest challenge we have had this autumn has been the global rise in inflation, much of it caused by the energy crisis and the issues concerning gas and energy supply globally. Supply chain interruptions and difficulties arising from Covid are other causes. We have managed to some extent to weather the Covid supply-chain issues so far although we are not immune from them by any means because we are part of a global system. On the energy front, there is concern. Through the fuel allowance and other measures, we sought to help people to deal with exceptional increases owing to inflation, not only in Ireland but also across the rest of Europe and the rest of the world. Inflation is the big issue of the day right now. The European Central Bank is saying it believes it is a temporary phenomenon. There are various academic perspectives on it. Economists have a view on it but the majority are still of the view that it will bottom out, certainly towards the early part of next year.

I am glad the Taoiseach mentioned the issue of energy because, this winter, increased electricity and heating costs will hit every single family hard. Working families will not only have to meet their own additional costs but they will also have to pay for the increases associated with the fuel allowance scheme. Despite this, the value of the retrofitting grant has decreased from one third of the cost to just over one quarter due to the rising cost of materials. There is genuine concern that the value of the grant will continue to diminish. For the invisible middle, grants are of little use when the families do not have the €18,000 to €20,000 to put with them to reduce their heating bills, improve their health, increase the comfort of their homes and help our climate. Over the next decade, the Government is asking these families to pay an extra €100,000 to deliver on its climate action plan, yet they are being pushed further and further away from the financial supports needed to make this happen.

In my initial reply, I did not deal with the issue of childcare. As the Deputy knows, we are making very substantial funding available in the budget, and we will do so next year, to ensure the existence of proper income supports for workers in the childcare sector and to create a career pathway. Employers and unions can work in the knowledge that there is a financial envelope to deal with the deliberations of a JLC in respect of childcare.

On retrofitting and the grant, as referred to by the Deputy, we have provided additional funding for retrofitting across the board through the budget and the recovery and resilience plan that we submitted to Europe, and more generally through the national development plan and economic recovery plan. Within that financial envelope, we will do what we have to do to make sure we can incentivise more people to engage in retrofitting.

I do accept there is a gap to be bridged between affordability and what people can spend. We do not want people getting into excessive debt at high rates, so there may be opportunities for low-interest loans as well as additional grants for people. That is being worked on.