Cost of living and inequality
Deputy Collins cited a TASC report on record cost-of-living pressures, poverty and inequality and asked what targets could improve the situation. The Tánaiste pointed to CSO data showing improved living standards and lower poverty, but warned the crisis could reverse progress and said a windfall tax was not ruled out.
This morning, Dr. Robert Sweeney, senior economic and policy analyst with the Think-tank for Action on Social Change, TASC, launched a report on the cost of living, which is reaching highs not seen since the 1980s. We know it is going to increase further. It also deals with inequality and we know over a million people were pushed below the poverty line in the past year. He stated Ireland has always been a high cost-of-living country and long-standing issues that elevate our costs include consistent failure in planning and public service delivery. He was asked what targets could be achieved between now and October, and some of those were discussed already this morning. He made a particular point about a windfall tax on energy companies. We know that the profits of these companies have increased enormously because of the price of energy. The UK is talking about a windfall tax, and Italy has imposed a 25% tax on energy companies. Dr. Sweeney pointed out that energy companies in Ireland are registered in such a way that we do not know their profits. What is the Government going to do about this? The proceeds from windfall tax could be targeted at the people who need help most.
Comment on this
As measured by the survey on income and living conditions, the official Central Statistics Office statistics indicate much progress in recent years. Living standards have improved, median incomes have gone up, rates of poverty and deprivation are down. Inequality, as measured by the Gini coefficient, has narrowed. That may not be the prevailing narrative but those are the facts. There is a big risk now that because of the cost-of-living crisis, we may see the progress reversed. It is important we do all we can as a Government to ensure that does not happen.
We are not ruling out a windfall tax on energy companies. I know other countries are doing it. The difficulty we have in Ireland is that the vast majority of energy companies are not Irish. Petrol, diesel, gas, etc., are imported. This is not something we are ruling out as a potential means of raising revenue, which we could then use to help people with the cost of living.