Cost of living emergency budget
Deputy McDonald argued for an emergency budget to help households under severe pressure and attacked the Government’s refusal to do so. Minister McGrath defended existing interventions, said inflation is exceptional and international, and accused her of raising the tone unnecessarily.
Last night Sinn Féin brought forward a motion calling on the Government to introduce an emergency budget to ease the enormous pressure on struggling households. I impressed upon the Taoiseach yesterday - at least, I tried - how this crisis is worsening for so many. Last night, however, even though families throughout the country are at breaking point, Ministers stood up one after the other in this Chamber and opposed an emergency budget. I listened to the Minister for Public Expenditure and Reform's partner and political twin, the Minister, Deputy Donohoe, on the radio this morning.
He says that he appreciates the challenge that households are facing. In the next breath he says that he is not going to do anything about it. Tonight, it seems, Ministers and Members of the Government benches will line up and vote against the introduction of measures to help families and workers. The message from Government to households on the brink is to strap yourselves in because you are on your own.
We have only three weeks left in the Dáil term and Government will then clock off for the summer. Its Members will then walk away telling people to wait for budget 2023. Why? Because it does not have a plan in the here and now.
Minister, October is too late for so many families. There are people watching in today who are literally only one bill and rent payment away from going over the edge and going under. These are people who work very long hours and cannot afford the basics. This is the hard reality of people’s lives. Despite everything that the Minister might say, clearly his Government does not get it. In fact, it is incredible to hear the Government congratulate itself over and over for having done so much when, clearly, so much more needs to be done.
Children, as the Minister knows, head back to school in late August and early September, not October. Those families face astronomical costs now. Energy companies are not going to give customers a break between now and October. Rip-off electricity bills will keep coming through the summer months. People go to fill their cars every week between now and October and, by the way, they are paying more than €2 a litre today. This is all happening now.
Asking people to wait until October for help is asking them to wait for disaster. An emergency budget is a sensible and necessary response at this time. Action to cut rents, emergency cash payments for low and middle income earners and increases in social welfare rates to protect the most vulnerable are reasonable and necessary measures and yet the Taoiseach and the Minister, Deputy Donohoe, tell us that they are not for turning. This demonstrates very dramatically the priorities of this Government as I suspect, as many others do, that if it was those at the top who needed a bailout, Fianna Fáil and Fine Gael would be in like a flash.
Comment on this
In fact, the Government has demonstrated before that when it is those at the top, the Government is in like a flash but when it is ordinary people who need a bailout package, its message is tough luck. Tá sé doghlactha go vótálfaidh an Rialtas in aghaidh buiséad éigeandála anocht. A Aire, teastaíonn cúnamh ó dhaoine anois. Beidh sé tubaisteach dóibh iarraidh orthu fanacht ceithre mhí.
Tonight’s vote then is a test for every Deputy in this House who sees their constituents suffering. One can either vote for them or vote against them; it is actually as plain and simple as that. This is a state of emergency for households. They need an emergency budget now.
Comment on this
We in government accept that many people and businesses are under pressure. We represent ordinary people too. We are elected by ordinary people and we meet them every day in our day-to-day lives as well. The reality is that the inflation that is being experienced is at a 40-year high and is primarily driven by international factors. I think Deputy McDonald also accepts that. It is exceptional in nature. That is why we have brought in a series of exceptional measures outside of the normal budgetary cycle because we accept that these are not normal times and a normal approach is not justified.
We have to continue to fund a number of the measures which we have already introduced, including the reduction in excise on fuel, petrol and diesel and indeed the reduction in VAT on gas and electricity also.
We will publish the summer economic statement next week and we will also, at that point, have the mid-year Exchequer position. That will help provide clarity on the resources that are available to the Government and to the country in the context of budget 2023. It is quite possibly the case that we as a country may face a prolonged period of high inflation. We believe it will peak in the short number of months ahead but we cannot be certain of that. Monetary policy is changing internationally also and the global economic outlook is deteriorating. We need to use the limited resources we have wisely and we have to time our further interventions to have maximum impact. It is our view that people will most need further help come the autumn and into the winter period. We will need at that time a set of measures that can have an impact quickly. This will, in particular, be targeted at those who most need the help in respect of one-off measures, temporary measures and so on.
In the budget we will also need to see the building on measures we have already taken across a range of areas to address further the day-to-day costs that people are facing be that in childcare, transport, in education and in health. We have made moves and significant investments in a number of those areas.
Of course, there will be need for a significant welfare package as well as providing a reduction in tax by way of ensuring that people do not continue to climb into the higher rate of tax as they receive an income increase.
In addition, we will have to invest in housing, in healthcare, in education and in disability services, and we have just listened to the debate there. We will have to fund the mica scheme, to ensure that we have the resources for the mother and baby homes payments scheme and, of course, the cost of supporting the refugees who are coming to our country having fled war. There will be many demands on taxpayers’ money and, of course, Deputy McDonald will be calling for more to be done on all of those issues over the months ahead.
The good news is that Ireland is in a relatively strong position going into this period. Unemployment now is less than 5%. We have labour shortages across a whole range of sectors in the economy and we have a broadly balanced budget. We have one of the fastest-growing economies in the European Union and are continuing to win a large share of international investments. We have some capacity but we have that capacity because we have managed the public finances well and the economy has rebounded very significantly.
Next week is an important milestone in the budgetary process. The Minister, Deputy Donohoe, and I will engage with the Oireachtas and will appear before the Committee on Budgetary Oversight to discuss with the Deputy’s colleagues the choices we face as a country.
I am sure that the irony is not lost on Deputy McDonald that if we had followed her approach, had taken her advice to spend €3.5 billion more in the previous budget, had taken this advice to do more every time we made an intervention over the past number of months, that we would not have the headroom and capacity which the Deputy now calls on us to use in order to do more. We have to try to meet all of these competing demands. There will be a significant intervention in the autumn by the Government and it will be focused on the cost of living that people are experiencing.
Comment on this
The good news is even better than the Minister alludes to because not alone are we in a relatively strong position as an economy, as he brags, but in fact it is projected that the Government will take in €5.6 billion more in tax revenues than projected on budget day. The Minister talked about clarity but I ask him to allow me to give him clarity as he brags about the economic position and how well he has managed the public finances. As we meet today, in households across this country, getting a child back to school in September is now a household crisis. How is that Minister? These are the facts on the ground. School books lists started to arrive today in many households. The outlook for those families who work very hard is not relatively positive. In fact, for many of them, it is terrifying. I am asking the Minister, very simply, that in his position as a Minister of this Government how he will respond now, react now and support those families now and not in October. That is the net point.
Comment on this
If I may say, a Leas-Cheann Comhairle, it is very galling to hear on the one hand the bragging of Government on the wonderful job it is doing, how wonderfully rosy the economic outlook is and, while families suffer, the Minister sits on his hands. Nero fiddles and Rome burns.
Comment on this
I thank the Leas-Cheann Comhairle. There is nobody bragging and there is no need to drag down the tone of the political debate on what is a very important issue which affects ordinary people and businesses all over the country. I can legitimately make the point about following Deputy McDonald's advice and spending €3.5 billion more in the budget last year on expenditure and spending more every time we made an intervention earlier this year when she said it only scratched the surface. Anyone looking at the Deputy's website will see all of the promises and commitments that her party is making which add up to billions of euro - those press releases that have not yet been deleted from her party's website. I can legitimately make the case that we have the resources to do more as a Government because the public finances are in a reasonably strong position.
We have already made interventions. I have given a commitment that we are prepared to go further. It is our assessment that the best time to do this is in the autumn. If we come to the House with a package now, the Deputy would first say it was not enough and then it would mean we would have less money to make a difference in the autumn when we think people will need it most. We understand the pressures people are facing. The Government is committed to a budget that is focused on the cost of living as well as measures in the autumn that will have as close to an immediate impact as we can practically deliver.