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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Cost of living pressures

Summary

Deputy Doherty pressed the Government on rising food, rent, energy, transport and childcare costs, arguing the €100 electricity credit was far too limited. The Tánaiste said inflation is hitting lower-income households hardest, but said proposals must also help those not on social welfare and homeowners. Doherty kept pushing for concrete action on childcare, rent and fuel allowance eligibility.

Tá costais mhaireachtála agus costais bhia, chíos, chairr, fhuinneamh, theas agus chúram leanaí ag ardú. Tá muintir na tíre seo, gnáth teaghlaigh agus oibrithe, ag streachailt. Níl go leor sa €100 a tugadh do dhaoine le dul in éadan costais leictreachais. Tá an ghéarchéim i bhfad níos leithne ná sin agus caithfidh an Rialtas é sin a thuiscint. Tá moltaí curtha chun tosaigh ag Sinn Féin chun dul i ngleic leis an ngéarchéim seo, na costais a laghdú agus cuidiú le daoine. Tá sé seo ina chúis imní do a lán daoine anois. Caithfidh an Rialtas réitithe réadúla agus uaillmhianacha a chur i gcríoch agus caithfear gnáthdhaoine a chosaint agus cuidiú a thabhairt dóibh, mar atá de cheart acu.

The Irish people face a cost-of-living crisis. There is absolutely no doubt about that. In the 12 months to December, inflation reached the highest levels in 20 years. Rents are spiralling out of control as a result of the Government's housing plan. Childcare costs amount to a second mortgage for many families. Putting food on the table and running a car has never been more expensive. Energy prices rose by 27% and the cost of home-heating oil has soared by 53%. Prices will continue to rise, with workers and families under pressure like never before.

The Government has had months to deal with the cost-of-living crisis but it failed to come up with a comprehensive plan to support these households. Instead the Government is trading sound bites with leaks from parliamentary party meetings rather than real and immediate action. The Irish people deserve a Government that understands the difficulties that they are facing, not a Government that ignores, delays or, indeed, even makes things worse in some cases. The time to act is long overdue.

Not all households will feel the cost-of-living crisis equally. We know from the Central Statistics Office, CSO, that the poorest households spend three times more of their income on heating and lighting their homes than the richest households, and that those in the middle spend twice as much as those at the higher end.

For months, Sinn Féin has been raising the issues of the cost of living with the Tánaiste, with the Government and with the Taoiseach, and we have been bringing forward proposals that the Government has rejected over and over again. Since September, before the budget, we told the Government that what was needed was a €10 increase in core social welfare rates to protect those most in need of support. What the Government provided did not even keep up with price increases and, therefore, it is a de facto cut. These families will be poorer this year than they were last year. We must see an additional €5 increase in these core rates to prevent families and children from being worse off this year than they were last year. We in Sinn Féin have called for an extension of the fuel allowance season by two weeks and for the eligibility criteria to be expanded so that more people can avail of the fuel allowance. The Government has also refused to deal with this.

The Government needs to halt its plans. It is just crazy that, within three months, the Government plans to increase the cost of home-heating oil and gas by heaping on another carbon tax on those commodities despite the fact that home-heating oil has increased by 53% in the past year and energy prices are up by 27%. The Government needs to stop that increase that is about to take effect on 1 May.

We have called for a refundable tax credit equivalent to one month's rent putting up to €1,500 back in renters' pockets to deal with the fact that rents are out of control - rising by over 8% - and we need to ban rent increases for the next three years. That is some of the action that is required.

These are some of the measures that the Tánaiste and the Government could take to deal with the cost-of-living crisis. Far from trading soundbites at the Tánaiste's parliamentary party meetings and selective leaks, let us deal and get on with the job that Deputy Varadkar was elected to do. Let us govern. Let us make sure that people are protected.

Does the Tánaiste plan to take any meaningful action in relation to this situation rather than issue soundbites? It is time for Government to do its job to protect workers and families from being fleeced.

Comment on this
Leo Varadkar The Tánaiste Fine Gael

I thank the Deputy for raising this very important issue again today in the House. The Government acknowledges that the cost of living is rising. It is rising very fast at present, faster than it has in 20 or 30 years, and people are feeling the squeeze. Whether it is the shock of looking at a gas bill, whether it is the electricity bill or whether it is the rising cost of filling a tank of diesel or petrol, everyone is feeling it in their pocket and, of course, those on lowest incomes are feeling it more so than those who are not. The Government gets that. We have already taken action, much of which was opposed by Deputy Doherty's party, and some of which was not.

We acknowledge, though, that the action that we have taken to help families with the cost of living is not enough and for that reason, the three party leaders, when we met on Monday night, commissioned line Ministers to develop proposals for a package of measures that will allow us to help families with the cost of living. That is being worked on at present, with further discussions on it today. I am meeting with the unions and employers this afternoon and there will be a chance to discuss it then. There will be a committee meeting of the economic Cabinet committee which I chair next week which will provide another chance to discuss it as well. We will make a decision on it soon, certainly in the next couple of weeks, because we acknowledge that the cost of living is rising, that it is causing a huge squeeze for many families and that as a Government we have to do something about it. We are aware that other governments in other parts of the world have taken action too and we believe we must do so as well.

In terms of the context, it is important to bear in mind that when the budget was prepared in September and October last, the estimates for inflation were somewhere between 2% and 3% and we built the budget on that basis. However, that has not been the case. It turns out that inflation has been much higher. It is in and around 5%, and rather than being a temporary phenomenon, while it might moderate, it looks like we may be stuck with high inflation for a longer period than we would have anticipated. When the facts change you need to adjust your policies and that is what we intend to do.

Back as far as last March, I was talking about the possibility of inflation. As far back as last June, I was strongly advocating for a personal tax package, welfare increases and pension increases in the budget, and we achieved that. That was done. Perhaps it was not adequate but it was done. Let us not forget that Deputy Doherty's party opposed the reductions in personal taxation. I advocated reductions in personal taxation to make sure that people getting a pay increase got to keep it because people earning over €38,000 who get a pay increase lose half of it in income tax. I wanted to make sure that people getting a pay increase - thankfully, most people will get a pay increase this year - got to hold onto it. The Deputy did not want that. I also wanted to make sure that those workers who do not get a pay increase - Deputy Doherty might not realise this but there some workers who will not get a pay increase this year because their employer will not or cannot provide it - would get something and the Deputy opposed that too.

Sinn Féin needs to be honest about its positions as a party. It might be the case that the Deputy objects to increases in carbon tax because of climate scepticism etc. but he also objects to reductions in personal taxation. The truth is, when it comes to after-tax income, significant numbers of middle-income people in the State would be worse off if Sinn Féin's budget had been introduced rather than ours. That is a fact. We acknowledge that things have changed since then, the cost of living has increased by more than anticipated and we need to act on that. We are working on those proposals now.

Comment on this

The cost-of-living crisis did not just fall from the sky overnight. It has been here with us for many months. We have been raising that with the Government. Indeed, we raised that with the Government before the budget. The Government failed to protect adequately those social welfare recipients who pay three times more on energy costs than the wealthiest in the State.

As a result, under the package for which the budget has been approved, they are going to be poorer by hundreds of euro this year than they were last year. We have a proposal on the way to do this, which is to insulate them from the cost-of-living crisis by increasing core social welfare payments by 5%. The Government plans to increase the cost of oil and gas for households on 1 May, less than three months from now. The price of gas will increase by €17 and by €19 for every fill of home heating oil. The cost of the latter has already increased by 53%. Can the Tánaiste state that he will stop that increase taking place at a time when people are seriously struggling?

Rent also has a serious impact in the context of inflation. Rent is increasing by 8%. We need to ban rent increases. We have put those proposals before the Government not weeks or months but years ago. We must put back into people's pockets a refundable tax credit of up to €1,500. Cutting the cost of childcare is another way to reduce the cost of living on these families. It should be reduced by a third and the proper investment should be made.

Comment on this

I thank the Deputy.

Comment on this

There are solutions there.

Comment on this

I thank the Deputy. The time is up.

Comment on this

We have given the Government the solutions time and time again. When is the Government going to act on them?

Comment on this
Leo Varadkar The Tánaiste Fine Gael

The Government acknowledges that inflation, in particular the type of inflation that we have at the moment, which is very much driven by higher energy prices, is impacting on those with lower incomes more so than those with higher incomes. That is clear. People on lower incomes spend more on energy and fuel, or a higher percentage of their income on energy, fuel and groceries than those on higher incomes. As a consequence of that - the Deputy is right about this - inflation impacts on different households in different ways. At the moment, inflation is impacting more seriously on lower income households than higher income households. In recognition of that, in the budget we did increase core social welfare rates. We also increased the fuel allowance, the living-alone allowance and the child dependant allowance. We did those things precisely because it was the lowest incomes that were impacted most. As I said earlier, we acknowledge that more needs to be done. We are working on those proposals now. I hear the Deputy’s proposal for an increase in core social welfare rates. The difficulty with that is that a lot of working people are not on social welfare. Deputy Doherty might not appreciate this, but people who are working hard, who earn middle incomes or who might look like they have good incomes on paper, also have to deal with the high cost of living and his proposal would exclude them.

Comment on this

What about childcare and rent?

Comment on this
Leo Varadkar The Tánaiste Fine Gael

Yes, but what about somebody who has a mortgage or somebody who is not on social welfare? His proposal would not help them.

Comment on this

What about childcare, rent and fuel allowance eligibility?

Comment on this