We know we are in the middle of a cost-of-living crisis. We know that inflation has surged by 5.5% and stands at a 21-year high. Families are struggling with basic necessities. It is getting more difficult for a very large number of people to put food on the table and at the same time heat their homes. An increasing number of households can no longer afford to do both. Every facet of daily life has been impacted. There have been huge increases in food, transport and energy costs. We know that accommodation is a big one, as is insurance. Energy bills are expected to soar by an unprecedented €1,300 this year.

The Tánaiste was asked about this at the weekend. He cited a number of things the Government is doing, including changes to the budget and the forthcoming €100 credit, as making a meaningful difference to people. It is frankly a bit insulting for the Tánaiste to pat himself on the back in the context of the core social welfare rates and pensions, which were increased by €5. The Government was warned before the budget that the pension had fallen in purchasing power by €10.24 since 2019, which is the last time there was an increase. Given the surge in inflation in recent months, its real value has been eroded further. The €100 credit for energy bills that the Tánaiste claims will be introduced as a matter of urgency is not likely to come for a number of months. In the context of those working families trying to keep their heads above water, the Government tinkered around the edges with taxation measures and cuts. We can see that, for example, a single person on a low to middle income of between €25,000 and €35,000 will receive €2 a week, whereas somebody on €100,000 will receive something like four times that amount. Meanwhile, the minimum wage has increased by 30 cent, which is just about 3%, and that, obviously, has been decimated by inflation. If we add in sky-high housing costs, with rents at record highs and a 14% increase in housing prices, the scale of the crisis becomes evident.

Does the Tánaiste think the Government has done enough to insulate people from the cost-of-living crisis? Will the Government introduce further targeted supports for those who are struggling to make ends meet?

I acknowledge that the cost of living is rising very fast. We had a prolonged period across the world of very low inflation. That is now over; we now see inflation at about 5% in Ireland, Britain and other parts of the world. We have not seen that in a very long time. The rising cost of living is causing a real squeeze on family budgets and has resulted in rising costs for business. Most of the factors driving this are outside the control of the Government, at least. They are largely driven by increases in energy costs and international oil and gas prices and disruption to supply chains as a consequence of Covid. It is estimated that inflation will moderate throughout the course of this year, but that does not take away from the fact that the impact of rising prices is having a really severe effect on family budgets and is squeezing many families in this State.

As to what the Government can do, it is multifold. The Deputy mentioned increases in pay. An increase in the minimum wage has just kicked in. There are increases in pay for public servants. Across the private sector, substantial pay increases are now being awarded to workers, and these are necessary to compensate people for inflation. There is the reduction in income tax, which kicks in this month. I will come back to that in a moment on foot of the Deputy's unusual comments in that regard. There are the increases in welfare payments and pensions, which also kick in this month, the 2% cap on rents, the freeze on childcare fees and the €100 grant for energy costs. Are we looking at other things we can do to help? Yes, absolutely.

I accept that some of this is generated from outside the State, particularly in respect of energy. Let us look at how Ireland was doing before this inflationary pressure kicked in. The cost of living in Ireland was 36% above the EU average. Our cost of housing is the highest in Europe. The cost of goods and services in Ireland is the second highest in Europe. Our fuel costs are the fourth highest. We are therefore not on a par with other countries in how this is having an impact. When inflation is added in, what is happening is putting people, especially those who were struggling anyway, into a very precarious position where they are actually choosing between heating their homes and putting food on the table. The change to the minimum wage has been more than eaten up by inflation. We are not on a par with other countries, and that needs to be looked at specifically.

The Deputy is absolutely correct in saying the cost of living in Ireland is higher than the EU average. It is important also to point out that average salaries and wages in Ireland are much higher than the EU average. Both have to be taken into account when considering such matters. There are two areas in respect of which Ireland is a particular outlier, namely, the cost of childcare and of out-of-pocket healthcare expenses. As I indicated on Sunday, that is an issue on which I will focus in the next year or two.

I wish to take the Deputy up on what she said about income tax. She said the Government tinkered at the edges in the context of what we did to reduce income tax for working people.

The Deputy's party opposed that. It was against income tax cuts. Income tax cuts happened because of this Government. What is that going to be worth for the average person earning around €40,000 a year or a couple, both earning in and around that, over the course of three years? We intend to do it over three years by widening the tax bands and increasing the credits. That average couple, who both earn around €40,000, will have €2,400 more in their pockets each year than they would under the Social Democrats, Labour or Sinn Féin. I really want people to know that. The Deputy cannot complain about the cost of living and then say that middle-class and working people should pay more income tax. They would under the Social Democrats.

It should be progressive rather than regressive.