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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Cost of living and inflation support

Summary

McDonald raises the hardship caused by inflation, quoting people struggling with food, bills and food banks. The Taoiseach argues the war in Ukraine and post-pandemic pressures have driven inflation, says the Government has already introduced support measures, and insists further help will come through the budget and expenditure decisions.

It is important that the Taoiseach would hear the voices and experiences of people who are struggling to get by. For example, the woman who says: "My husband is 70. He is still working. He can't stop at the moment because if he stops, we know it will be very difficult for us just to live." Or the mother who says: "I have started to cut back on my food shop. The price of everything has gone up. Everything. The kind of things that we cannot do without. Or another mother who says: "I now go to a food bank. It is embarrassing, but if I don't go, we'll go hungry. I am there every Tuesday and every Thursday and it is packed to the rafters."

These are the words of thousands of people who took to the streets on Saturday afternoon because they are pushed now to the brink by an ever-worsening cost-of-living crisis. Despite the hardship that they face, they see a Government refusing to take action that will make a difference. Households are now caught in the eye of a perfect storm of soaring prices. They are ripped off by extortionate rents and mortgage repayments. They are ripped off by big energy bills. They are ripped off at the pumps for petrol and diesel. They are ripped off by sharp increases in the cost of groceries. People face unbearable pressure. They all said one thing, with one voice, on Saturday. They said they are at breaking point. They cannot wait until October for the budget and then wait again until January for measures or relief to kick in. People are suffering now. They are being pushed to the edge now and they need the Government to act now, today.

An emergency budget is needed because people face a disaster as they struggle to afford the basics. There are mothers who cannot afford a new pair of shoes for their child, parents who are struggling to put breakfast on the table and elderly people who are choosing between heating and eating. The Taoiseach is asking these people who are in dire straits to wait. That is just not right.

At Saturday's protest in Cork, Ms Catríona Twomey who runs Cork Penny Dinners - she is a great lady and the Taoiseach knows her well - said, "...we fed over 500 people today ... I can get through everything else but when children are hungry and their parents are crying, [well] that gets [to] me." That is the Ireland of 2022. How on earth can anyone in the Government look these families in the eye and tell them it has done enough? What these people live through daily tells us explicitly that enough has not been done. The response from the Government has been slow and has lacked urgency. We all know international factors are at play and we accept the Government cannot do everything but it can do more. Without emergency support, families will face a very difficult back-to-school period and a brutal winter as energy costs continue to rise. Tá an costas maireachtála imithe ó smacht. Tá teaghlaigh i mbaol faoi láthair. Caithfidh an Rialtas aghaidh a thabhairt ar scála na géarchéime seo. Teastaíonn cáinaisnéis uainn sa Dáil láithreach.

The Cabinet met this morning. We were told the cost-of-living crisis was high on the agenda. I hope there was a realisation at that meeting that households cannot wait another six months and the Government cannot pack up for the summer and leave workers and families in the lurch. The Government must now respond with urgency and introduce an emergency budget.

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I join in the welcome to members of Gaelscoil Bharra chuig Tithe an Oireachtais. Tá súil agam go mbainfidh siad taitneamh as a lá anseo.

There is no question the war on Ukraine has very significantly exacerbated what was an emerging inflationary cycle coming from the pandemic, the fact that economies rebounded so quickly from the pandemic and the resulting supply and demand issues. That has created significant pressures on families and households. The Government responded and has done so quickly, more quickly than other countries across Europe. In particular, the Government introduced very significant measures in hiking up the fuel allowance to more than €1,139, which is a 55% increase in the free fuel allowance alone. We reduced the excise duty on petrol, diesel and green diesel and we also reduced VAT from 13.5% to 9% on gas and electricity. We gave €200 to every single household throughout the country. We cut the annual public service obligation levy from €52 to minus €75. We launched the national retrofitting scheme. We also put a cap on school transport fees for families. We cut public transport fares by 20%, with an additional 50% cut in fares for young people. We lowered the threshold for the drug payment scheme to €80 per month, which benefits more than 70,000 families. We brought forward a working family payment budget increase. We abolished the €80 inpatient hospital charge for children and so on. We brought in specific schemes for the haulage, tillage and hospitality sectors.

The bottom line is more than €2.4 billion has already been spent on cost-of-living measures. We are asking nobody to wait six months. We are saying we cannot chase inflation every month. The World Bank is warning of the risk of stagflation, which is the kind of thing we experienced in the 1970s. Whereas 1970s' stagflation was caused by the initial oil price shock, it was the second and third rounds of inflation that drove it on for the next ten years. I do not want that to happen in Ireland over the next ten years. The wider economy in Ireland is still growing. We need to protect our economic growth as long as we possibly can. We need to protect all those people who are in jobs - the 2.5 million people who are working. We cannot take risks with the economy or with inflation.

That idea of protecting the jobs in the economy is something to which the Deputy should give more attention. If we had followed Sinn Féin's advice from the outset, I think we would be in an even greater inflationary cycle. The ESRI report is a good reminder of that in terms of the importance of targeting and not just making wholesale cuts across the board, which Sinn Féin has advocated time and time again, as it would damage the economy. I do not think that it gets the enterprise side of the economy or wants to get it. In my view, we have to watch that side of it and we have to avoid stagflation in itself.

We have taken action and we are going to take more action to alleviate pressures on people and households. I am worried about the winter period because we have seen what Putin did this week in reducing gas supplies to Germany and other European customers. That is going to have an impact on our energy situation. He is leveraging it in particular to create maximum pressure for the winter period. We have to allocate our resources in the optimal way, which in my view is to protect people right throughout the winter period and beyond. That is the big objective that we should share, namely-----

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Thank you Taoiseach. The time is up.

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-----to get people through what will be a difficult winter period across the board. I think the budget gives us the broadest and most comprehensive way of doing that-----

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We are well over time, please.

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-----and making sure that some of the measures would be applicable from day 1 of the budget announcement.

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First things first. I am not asking the Taoiseach to chase inflation. I am asking him to recognise the reality that people are struggling now, in June, and that people will continue to struggle through the summer months, not to mention the winter ahead of them. The Taoiseach says that we need to protect our economy, and we do, but above all else we need to protect our people. Above all else we cannot take risks with our people, risks that have children hungry and parents crying. That is the reality. Unfortunately, the Taoiseach is asking people to wait.

With all sincerity and not in a spirit of political rivalry, I appeal to the Taoiseach to change that position. Families are suffering now and they desperately need targeted and thoughtful measures to give them breathing space now. The Taoiseach stated that the Government was not asking families to wait. If he is insisting that the October budget will be the moment when relief is delivered, then he is asking people to wait. That is wrong. It is not real and is totally unfair. What measures will the Government introduce with all due haste now, not in October?

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Sinn Féin has been asking us to chase inflation from the beginning. That has been a consistent theme that it has been articulating since the beginning of the year. By the way, protecting the economy is protecting our people. Protecting jobs is protecting our people. We should not underestimate the economic recovery that has happened, which gives us some buffer - not a total one - for protecting people against what was predicted coming out of Covid. No one predicted that we would be at 2.5 million people working in the immediate aftermath of Covid-19. People thought that would take until 2024 to happen. Thankfully, the economy has rebounded much faster, but inflation is a huge pressure on people and it is largely driven by the energy strategy of Putin. He wants to sow discord across the West. He wants to create maximum pressure on western democracies through his energy policies, through his food policies - preventing grain from getting into Europe - and through migration pressures by terrorising people out of Ukraine. We cannot allow him to win the strategic battle that he is waging on us. When I said-----

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Then protect our people and he will not win.

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The Deputy suggested earlier that we were asking people to wait six months. We are not asking people to wait six months at all.

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What we are saying is that-----

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Time is up, please.

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-----because we have to go through expenditure in terms of detailed departmental expenditure to deal with issues like childcare, housing and-----

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We are over time, Taoiseach.

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Sorry.

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