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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Carbon tax and cost of living

Summary

Deputy Doherty argues workers and families are being hit by rising energy costs and carbon tax increases. Minister Ryan defends targeted supports, renewable investment and says Sinn Féin has not offered a clear funding alternative, with Doherty proposing a bank levy.

Cé go bhfuil sé soiléir dúinn uilig faoin am seo go bhfuil géarchéim mhillteanach ann maidir le costais mhaireachtála, níl cliú ag an Rialtas cé chomh holc agus atá rudaí. Tá sé ag déanamh neamhaird ar theaghlaigh agus ar oibrithe atá ag streachailt amuigh ansin. Ní hamháin sin, leis an fhírinne a insint tá sé ag déanamh rudaí níos measa. Tá costais fuinnimh agus teasa ag ardú leo agus tá an Rialtas ag cur pionóis orthu siúd atá ag fulaingt le cáin charbóin agus níl ciall ar bith leis seo. Workers and families face a cost of living crisis. Rising prices are reducing the living standard for low and middle income households and many families are being forced to make choices they simply should not be making. Those choices include cutting the amount of food they buy, whether to turn on the heat or for some it is even both of those.

Figures released by the Central Statistics Office today show that prices have increased by 5% in the last year and as I have repeatedly said to the Minister and other Ministers, inflation does not affect everybody equally. Lower and middle income households spend more of their money heating and lighting their homes than those on the top do. The measures the Government came forward with last week abjectly failed to meet the needs of those many families. For example, the Government handed out the same level of support to millionaires as it did to low and middle income households through the electricity credit. It will spend €12 million to give financial support to over 60,000 holiday homes. This makes no sense. Sinn Féin proposed a package of measures that would have been more focused and that would have offered greater support to those in low and middle income households. It would have done so through, for example, a direct cost of living cash payment, as has been done elsewhere. However, the Government did not listen and it simply would not go there.

Today’s figures show that electricity has gone up by 22% in the past year. The price of gas has gone up by 28% and, staggeringly, the price of home heating oil has gone up by over 50% in the past year and it is continuing to rise. This is the method one third of the population uses to heat their homes and two thirds of the population in the Border region of Cavan, Monaghan, Donegal, Sligo, Leitrim and Louth use home heating oil to keep themselves warm at night. Despite soaring energy prices, this Government is determined to increase those prices further with a hike in the carbon tax coming into effect on 1 May. The Government needs to get a grip on this and come to planet Earth and to where people really are. So many people are struggling, every euro counts and every single bit makes a difference. Pushing ahead with the carbon tax is wrong, it lacks common sense and it should not go ahead.

The measures announced by the Government last week were criticised, not just by Sinn Féin and the Opposition but by the Society of St. Vincent de Paul, the lone parent organisation One Family Ireland, Social Justice Ireland and many more. More importantly, they were criticised by ordinary people who know what it feels like to have a Government that is ignoring them and does not get where they are at. All of those comments were valid. At the same time we have the bizarre comments of the Taoiseach warning that increasing the disposable income of struggling families risks making matters worse. Could the Government be more out of touch? The Tánaiste is calling on the ESB to act in a way that many recognise will damage our economy and threaten jobs. The Government needs to wake up, get real and understand what is happening out there to ordinary workers and families. Will the Government cancel the planned hike in the carbon tax which is due in May and will it introduce targeted measures to support workers and families to deal with the cost of living increases?

Comment on this
Eamon Ryan Minister for the Environment, Climate and Communications Green Party

We are introducing targeted measures; that is exactly what we did last week. A 20% reduction in public transport fares is targeted and real and will affect people every day. It will be introduced at the end of April and that will make a real difference to people’s everyday lives and their cost of living. The Deputy is right that people are exposed to these high fossil fuel prices, which are due to international factors and it is a signal that we have to rid ourselves of our dependency on that. An 80% grant to put in attic and wall insulation, which could be done quickly, is the best approach and the best targeting. That cuts the average energy bill by about 25% and combats the price increases we are suffering because of international factors and that is real. It improves health, homes and addresses the issue.

I fundamentally disagree with the Deputy and with Sinn Féin’s position on this because the measures we are introducing are socially progressive. There is no other tax like carbon tax in that the Department of Finance has guaranteed that we will give all of it back to the people and that it does not go into the Exchequer. Some 30% of it goes to increasing social welfare provision, which brings about real and targeted improvements for those most in need. This includes those on the living alone allowance, qualified child allowance and fuel allowance, which target the poorest. In the last two budgets when we have done that the Economic and Social Research Institute, ESRI, and others have done immediate and detailed analysis showing that it is progressive and that those on the poorer side of our society benefit most. The other 55% is going to improve people’s homes, while cutting emissions. If the Deputy is asking what planet we are living on it is the one we want to protect, the one we want to stop burning and the one where we do not just talk about climate change but do something about it.

No alternative funding is being presented for that sum of €9 billion. Where would we get the money? Where would that €9 billion we will get through this mechanism and give back to our people to protect them come from? What other spending would be cut instead of that or would Sinn Féin stop providing the grants? Would we not provide the 80% grant or the increase in the fuel allowance? Those are the questions I have to put back to the Deputy. This is not easy or particularly popular but it is the right thing to do for social justice as well as for environmental protection and I am convinced of that. If there is an alternative I would love for the Deputy to come back and say Sinn Féin would raise the €9 billion somewhere else. That would be a good debate and then we could have a real analysis.

To say that this is the source of the problem is incorrect. The source of the problem is our reliance on fossil fuels and the damage they are doing to our immediate health as well as threatening the future of our children on this planet. We have no choice but to respond to that by acting now in a quick way and with a just transition. I am convinced by this approach, which has been analysed by academics for decades, which says this is the way to do it, to give the signal but protect people at the same time. We will do it again next year - increase fuel allowance and increase the social welfare package and that will continue to be beneficial in helping those who need those supports most. That is targeting and that is the right approach. What is the alternative? Where would the money come from? It cannot be an easy answer that everything comes from general taxation. That means we might have to cut spending in health, education or social welfare and I do not want to do that.

Comment on this

I agree with the Minister that the Government is targeting and its targets are ordinary workers and families and that is the problem. The Minister may shake his head but I will say this. Despite the fact that the cost of home heating oil has increased by over 50%, the Government’s decision is to increase it further on 1 May. Despite the fact that the cost of gas has gone up 28%, the Government will bump it up further on 1 May. That makes no sense and that suggests to me that the Government does not get it.

The Minister asks what the alternative is. To abandon the increase in the carbon tax in May would cost €32 million. The Minister and his Cabinet colleagues in government signed off on a cut in the bankers' levy to the tune of €63 million this year. That is where the alternative funding would be but that requires being on the right side of workers and families instead of being on the side of the bankers. The Minister can stand there and justify to me why the Government will take an additional €32 million out of the pockets of these families, which are already crucified by high energy and home heating costs and at the same time give double that amount of cuts to banks in this State. There are always options but the Government has to be on the right side and it has to get where people are at. After hearing what the Minister has said in the last four minutes I am convinced that he does not understand where people are at in the here and now. I ask him again to come forward with a package that deals with what the Society of St. Vincent de Paul, the lone parents organisation and Social Justice Ireland are saying and meets the needs of so many people are struggling. The Government should stop making things worse.

Comment on this

I have the greatest respect for Sinn Féin. We have worked together collectively over the years, so this robust argument is done out of respect. What I have to know is: what is Sinn Féin's position on this? It keeps changing. It says it would stop any increases in the carbon tax now. It will agree to the carbon tax increases that have occurred previously because it knows that is central to the ability of any Government, including a future Government, to pay for the things we need. However, it keeps changing. It is always, "Okay, we will stop it now". Either this is the right approach or it is the wrong one. I believe it is the right approach.

There is one further category, that last element of 15% which is €1.5 billion. We are targeting that for small farmers. If one looks at the poverty map of our country and at who gets least-----

Comment on this

The Minister asked for an alternative and I gave him one - the bank levy.

Comment on this

-----who pays most and who are most at risk, that €1.5 billion will be very important for that community. That is why I stand up for it. I still do not have a clear understanding of where the Deputy says the money would come from in a real way, if not in this way.

Comment on this

I just explained it to the Minister. He just does not want to make the choices. He is on the wrong side of this argument. Jesus Christ-----

Comment on this