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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Cost of living crisis

Summary

Deputy Doherty argues the Government has lost control of the cost-of-living crisis, citing surging energy, rent and inflation pressures on low- and middle-income households. The Tánaiste accepts the crisis, says many are struggling, and points to welfare and budget measures as partial relief.

Níl dabht ar bith ach go bhfuil smacht caillte ag an Rialtas ar an ghéarchéim costais maireachtála. Tchímid go bhfuil méadú de 28% tagtha ar bhillí leictreachais, go bhfuil méadaithe os cionn 50% tagtha ar bhillí gáis agus go bhfuil an costas d'ola chun tithe a théamh beagnach dúbailte le bliain anuas. Tá cíosanna imithe suas 12% agus tá brú millteanach ar theaghlaigh ar ioncaim íseal agus ar mheánioncaim.

There is no doubt the cost of living crisis is reducing the living standards of low- and middle-income households across the State. Inflation in the 12 months to April reached over 7%, the biggest spike we have seen in prices in more than two decades. Workers and families are struggling. They are seeing their energy bills soar and other costs rise. We know what has caused this. Many factors are beyond our control but others are not. Soaring rents and unaffordable childcare are not beyond the control of this Government. In many ways, they have reached such unaffordable levels because of Government policy. The Government can and must respond.

We in Sinn Féin recognise that every household cannot be protected from every price increase but low- and middle-income households must be supported. In this regard, the Government has lost control of the cost of living crisis. Electricity bills have increased by 28% and gas bills by over 50%, the cost of home heating oil has almost doubled and rents have gone up by 12%. Inflation impacts everybody but not equally. Lower-income and middle-income households are hit hardest, as they spend a higher proportion of their money on energy and food.

The most vulnerable in our society are faced with choices they should never have to make over whether to eat or heat their homes. Shamefully, the Government has not increased social welfare rates in response to historic levels of inflation. The pay packets of low-paid workers cannot stretch from one month to the next. Let us be clear. The Government is deliberately allowing people to fall through the cracks. Sinn Féin has for many months consistently called for a mini-budget that would bring forward a comprehensive package of measures to support low- and middle-income households.

This morning the Think-tank for Action on Social Change released its report on inequality in Ireland in 2022. It highlights the fact inflation has impacted low-income households most and has been made worse by Government policy failure in areas such as housing and childcare. It recommends what Sinn Féin has called for for months, that is, an increase in social welfare rates to ensure the most vulnerable in our society are protected and supported. It also calls for an increase in the minimum wage to boost the incomes of more than 130,000 workers. However, the Government has refused to do either of these things.

Sinn Féin has been calling on the Government to introduce targeted measures to protect renters through a refundable tax credit putting one month's rent back into renters' pockets and to ban rent increases. We have called on the Government to reduce the cost of childcare and of home heating oil. These measures can be taken. They are sensible, necessary and what families and workers need at this time. The Government continues to delay, oppose and rule them out. Workers and families cannot afford more delay or inaction. They are looking for the Government to respond to an unprecedented challenge in their homes and lifestyles and to the cost-of-living crisis they face. They are looking for the Government to take the actions we in Sinn Féin have spelled out.

Is the Government planning to introduce further measures or does it continue to ignore the plight of, in particular, those on fixed incomes who have not seen an increase in social welfare rates during these unprecedented price increases?

Comment on this
Leo Varadkar The Tánaiste Fine Gael

I thank the Deputy for raising this important issue. I acknowledge that we face a cost-of-living crisis, that inflation is at levels not seen in a very long time and that people are feeling the pinch and more than a pinch. Many are struggling to make ends meet. It is affecting households and families, as well as businesses in terms of the cost of energy. People see it when they fill their car with petrol or diesel, really see it in their electricity or gas bill and increasingly are seeing it in other areas, such as groceries.

It is true that those most affected are those on lowest incomes because they spend more of their incomes on food and energy than those on middle or higher incomes. However, I do not think it only affects those on low to middle incomes. People on average incomes of €40,000 to €50,000 per year, working full time, are also being affected. That is why the Government's approach has been to take action that is universal so everyone gets some help, including those on middle and good incomes. However, we are targeting our approach in order that most of the support is going to those on the lowest incomes. I think that is the right approach. Sinn Féin does not support it for ideological reasons but I disagree on that. It is a universal approach to help everyone and recognise that middle-income families are being hit too, but is targeted to give additional help to those on the lowest incomes.

I am a little disappointed in the Deputy's question because there was no acknowledgement in it that the Government had done anything to help people with the cost of living. That is not fair. We have had packages totalling €2.4 billion to help people with the cost of living. That is considerable and is more than would be the case in any one budget. We had a tax and welfare package that kicked in in January. Sinn Féin supported the welfare and pension increases but did not support the tax element of that. The average couple earning €40,000 each per year, we will say, would be thousands of euro worse off under Sinn Féin in terms of after-tax income than under the current Government. The increase in the minimum wage kicked in in January. We reduced VAT on electricity and gas. We reduced excise on petrol and diesel. We brought in targeted measures to help those who need it most, including the increase in the fuel allowance through two additional payments and the €200 discount per household on electricity bills which people are seeing in their bills at the moment. There is a 2% cap on rent increases, which means rent is going up between 0% and 2% for existing tenancies. We have had reductions in public transport fares, which I think have been widely welcomed, especially for younger people. We have had a reduction in the cost of school transport for families with multiple kids using it. We have had a reduction in the costs of medicine and 92% of childcare services have signed up to free fees. There was not a single mention of any of that in the Deputy's question, which is not fair. It is €2.4 billion and ten or 20 measures, including universal ones to help everyone and targeted ones to help those most in need.

I know I will hear back the usual rant for social media about how we do not get it, yadda yadda, and all the pre-scripted stuff. I would like to see in part of the Deputy's response an acknowledgement that the Government has done something in this area and has provided €2.4 billion worth of relief to help households with the cost of living. Will the Deputy at least be generous or honest enough to acknowledge that in his reply?

Comment on this

The Tánaiste missed the point. We recognise what happened in the budget and the measures taken.

We had to push the Government repeatedly even to move in respect of petrol and diesel. It still did not go far enough. I can tell the Tánaiste, hand on heart, that the people who come into my constituency office and those of my colleagues are not ranting to us when they tell us they cannot make ends meet and are facing serious choices this year in respect of how to heat their homes, clothe their children and put food on the table. They are telling us that they are social welfare dependent. The social welfare rates have not been increased by the Government despite the fact that inflation is running at over 7% and these individuals have a higher rate of inflation. Renters are telling us that they cannot afford the rent increases, not even the 2% the Tánaiste is talking about - in many areas it is far more than that - and are being forced into homelessness. They are not ranting to us; they are telling us their life experiences.

Will the Government respond to the immediate needs faced by low- and middle-income households and families that need additional supports in the form of social welfare increases, rent rebates and a reduction in childcare costs?

Comment on this
Leo Varadkar The Tánaiste Fine Gael

There has been an increase in social welfare rates. That occurred in January and was done in response to the fact that we had a return to inflation. There had not been increases in social welfare rates in some previous budgets. Since then, there have been other increases in social welfare. For example, we brought forward changes to the working family payment and we also brought in an extended fuel allowance period and an additional fuel allowance payment. We had welfare increases in January and, since then, there have been further welfare increases, acknowledging the fact that people living on welfare are being hit hardest by the increase in energy costs and now in food costs. That was done. It would, at least, be relevant for the Deputy to acknowledge that fact. Welfare increases occurred in January and there have been two sets of further welfare increases since then. Obviously, people on welfare have benefitted from the €200 per household reduction in electricity bills which is just kicking in now, as well as the reduction in excise on petrol and diesel. These things are happening.

As we all acknowledge, a lot of these inflationary pressures are beyond the control of governments, or at least the Irish Government, because they are driven by international factors. There are areas where we can help and do more, such as childcare and the cost of public transport and we are working on proposals in those areas.

Comment on this