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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Cost of living pressures

Summary

Deputy Carthy argued the cost-of-living crisis is crushing households and that Government has not presented enough immediate relief. The Tánaiste accepted inflation is driving hardship but said the problem is international, Ireland’s costs are high relative to peers, and Opposition proposals lack funding or implementation detail.

At this stage, we are running out of words to describe the impact of the cost-of-living crisis on ordinary workers and families. Households simply cannot keep up. They are struggling to make it to the end of the week. Their hard-earned money is going out faster than it came in. While people watch every cent they spend and do everything they can to provide for their children, they also hear that the wealth of Ireland's nine billionaires rose by €16 billion since the start of the pandemic. This cost-of-living crisis is happening at a time when inequality and the lack of fairness in Ireland is writ large. It is up in lights for all to see. People are working long, hard hours but they cannot afford to pay utility bills, put a roof over their heads, put fuel in the car and put food on the table.

It is an understatement to say the packages the Government has introduced do not go far enough. They did not make a dent in the astronomical living costs people face. The €200 energy credit was overtaken before it was delivered. The excise measure to deal with the soaring costs at the pumps was wiped out virtually overnight. Incredibly, the Government still has not done anything to reduce the cost of home heating oil. In fact, at the beginning of this month it did the exact opposite, hiking the cost even further. What has been the result of the Government's slow and sluggish response? The impact is felt sharply right across the board. The price of groceries is now soaring, as farmers warned us it would. Increases in the prices of essentials like milk, bread and butter have hit people hard and more and more families are depending on food banks and charities like St. Vincent de Paul. All the indicators point to further dramatic rises in food prices. Fuel prices are now back to the levels they were at before the Government introduced a measure it was told was not enough. In some places, in fact, the price at the fuel pumps is even higher today than it was then. It is Groundhog Day for those who are paying huge sums to fill the tank to get to work or get the kids to school. We have all heard the stories from people like nurses, teachers and many others who simply cannot afford to run their cars any more. These people live in communities where there are virtually no public transport options. The car is the only option.

For too long, the Government has skirted around the edges of this crisis. We know international factors are at play. We accept that reality and I accept the Government cannot do everything, but the truth is it can and should do a lot more. People struggling to make ends meet today do not want to hear what the Government did three months ago. They certainly do not want to be told they have to wait until the budget in October. That is for the birds. There are options. Sinn Féin has presented a comprehensive package of measures that would make a real difference. We called for a mini-budget but the Government has sat on its hands.

What is the Government's plan for now, for 26 May 2022, knowing the reality faced by so many workers and families who are struggling to make ends meet and who do not know how they will reach the end of the month? People want to know what the Government is going to do now, today, to help the people who are going without lunch so they will be able to put fuel in the car on their way home. That is happening today. This situation is beyond a crisis. We need to hear that the Government intends to act and we need to hear that right now.

Comment on this
Leo Varadkar The Tánaiste Fine Gael

I thank the Deputy for the question. At the outset, I acknowledge that Ireland, and the entire world, is facing a cost-of-living crisis driven by inflation, which is largely caused by international factors beyond our control, as the Deputy acknowledged. The cost of everything is going up and the cost of very little is going down. People can see that in their utility bills, when they go to the petrol station to fill up their tanks with petrol or diesel and in their grocery bills. A lot of families are struggling and a lot of people are struggling to make ends meet as a consequence of that. As the Deputy acknowledged, this is not driven by Government policy. It is driven largely by international factors, including the rising cost of energy and the war in Ukraine. The zero Covid policy still being pursued by China is not helping.

As Sinn Féin has acknowledged on many occasions, no Government is in a position to compensate people fully for the fact that the cost of living has risen by so much. We are here to help and the Deputy is right to call on us to help some more. So far, the Government has provided €2.4 billion to homes, households and families to help them with the rising cost of living. A usual budget package is €1 billion or maybe €2 billion. We have already introduced measures totalling €2.4 billion so far this year. Far from being a mini-budget, we have done more since January than would be done in the average budget, with €2.4 billion in spending to help people with the very high cost of living. There was a pension and social welfare increase in January, as well as an increase in the minimum wage and reductions in income tax, which were not supported by the Deputy's party, it is worth saying. People are having €200 taken off their electricity bills at the moment. Public transport costs have been reduced and that seems to be very successful given the increase in the number of people using the bus and the train. VAT has been cut on electricity and gas to the extent we could within European law. We have also reduced excise on petrol and diesel. There have also been targeted actions in relation to the fuel allowance, for example, particularly helping those families who suffer the most from high energy costs.

We are of course exploring other measures. The Deputy will be aware that there is legislation before the House at the moment that would eliminate hospital charges for children. We would like to go further again and eliminate them for adults as well.

We are examining what else we can do. Pay negotiations have now started, involving the Government and public sector unions, on what we can do around a new pay agreement. While we are a while away from an agreement, I think it is fair to say we will come to an agreement at some point, and that will mean increases in wages and salaries for public servants to help them with the cost of living. That is happening in the private sector as well, where employers that can afford pay increases are providing them.

We are also examining what we can do in the area of childcare. Childcare is very expensive in Ireland relative to other European countries. Often, the families facing high childcare costs are the same families that are trying to pay the rent and trying to save for a home. It affects young families in particular. We will be working on solutions over the next few months that might help them with the cost of childcare. That is something the Government can do.

The Minister, Deputy Harris, is also looking at some proposals regarding the cost of education. It is very expensive for middle-income families to put one or two kids through college, and we are looking at solutions in those areas as well.

In summary, as the Deputy acknowledged, inflation is being driven largely by international factors. No government anywhere in the world can fully compensate people for that. What we have done so far, worth €2 billion, is more than a mini-budget. It is the kind of thing that is usually done in two budgets, and that is what we have done since January. Of course, we are open to taking more action if we can.

Comment on this

On the back of a piece of paper, I can think of rents, mortgage interest costs, childcare costs, insurance premiums and healthcare access. These are all areas where Irish workers and families were already paying among the highest rates in the world under the Tánaiste's Government, and all of that has been added to by the soaring cost of electricity and fuel prices that are quite simply out of control, and now we know grocery prices are also going to soar even further. I asked the Tánaiste what the Government is planning to do today to help those families. His response was, essentially, that it is exploring things. The time for exploring is over. We have given the Government options and measures that will support workers and families in the here and now, put money back into the pockets of hard-pressed workers in the here and now and reduce costs today.

I will ask the Tánaiste again. What can the Government do to assure those people who at this moment are scratching their heads and wondering which choice to make, such as whether to put fuel in the car or miss work, or whether to put food on the table and not pay the ESB bill? Does the Tánaiste have a proposal to provide them with the supports they need here and now?

Comment on this
Leo Varadkar The Tánaiste Fine Gael

Again, I acknowledge that the cost of living in Ireland is high. It was high before the current inflation crisis, compared with our peers. The cost of living in Ireland is about 30% or 35% higher than it is in similar countries. Our wages and salaries are also about 30% or 35% higher than in similar countries, which is important to bear in mind. While the Deputy's party has given us options and ideas as to how we can further assist people with the cost of living, it has not said how we should pay for or operationalise them. In many ways, that is the difference between Government and Opposition. In opposition, it is easy to throw out solutions that are popular. The Opposition does not necessarily have to demonstrate how they are operationalised or paid for.

One thing we want to avoid as a Government is getting into a situation whereby we are using borrowed money. Interest rates for government borrowing are rising too, and we want to avoid a situation whereby we borrow money to help people with the cost of living because that is false help. We would then have to take it back off them down the line, and that is something we want to avoid. Whatever we do, we need to make sure we do it in a way that is prudent, helping people with the cost of living but not using their own credit card to pay for it, and that is why the Government has put so much effort into securing investment and employment, which drive the growth we need to pay for things.

Comment on this