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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

EUROSTAT cost-of-living report

Summary

Deputy Mattie McGrath argued Ireland was the most expensive EU country and that Government was detached from reality, particularly on fuel and taxation. The Tánaiste said the EUROSTAT findings were accurate but incomplete, stressing that Irish incomes are also higher and that prices must be viewed alongside pay levels.

The Government is detached from reality and completely self-absorbed. To come to this conclusion, all we have to do is listen to any interview with the Minister for Finance, Deputy Donohoe, or the Taoiseach.

A recent EUROSTAT report from the European Commission revealed that Ireland was the most expensive EU country when it comes to the cost of living. Prices in Ireland were found to be a staggering 40% higher than the EU average in 2021 and matters have worsened significantly since then, as we all know. The report also revealed that, astonishingly, the cost of housing in Ireland was 88.5% higher than the EU average and a staggering 88% higher for utility bills such as electricity and gas. The average cost of food here was 17% higher than in the EU27 countries. These are the figures we are talking about. Milk, cheese and eggs were found to be an average of 25% higher in cost, fats and oils were 22% higher, while breads and cereals were typically 20% higher.

Despite Ireland's crippling cost of living, the Government has failed to act in any meaningful way, although EU governments have taken many measures to cut back on excise duties. The Rural Independent Group has tabled motions on this matter, as have other groups. Last night, there was another vote on a Sinn Féin motion. We also tabled a Private Members' motion last April asking the Government to axe the carbon tax, which would have the impact of putting approximately €8,000 directly into every person's pocket and knocking ten cent off the price of a litre of fuel by 2030, but that was rejected.

The Government has remained tone deaf on many issues, despite the people suffering. As I said, the current cost-of-living crisis is financially crippling lower income earners, including pensioners, struggling mortgage holders and, of course, the unemployed. It is also having a disproportionate impact on all residents and farmers throughout the country. Research has shown the impact of the crisis on rural dwellers has been much higher. We all know that from listening to people every day of the week. Rural communities and farmers face crippling costs for feed, fertilisers and fuel, which has the potential to wipe out many viable farms. That is the fact of it.

The Government brought in what I call an inept package. It is trying to play a three-card trick on the people by bringing in these little measures while taking so much excise duty from every litre of fuel. The public has copped on to this. The Government is glowing because of the tax receipts it is getting on the back of people's misery. As I said, not since the British landlords, who turned their eyes the other way at the time of the Famine, has any Government been so harsh, so inept in dealing with the problems and so uncaring about the people of Ireland. It is shocking.

Comment on this
Leo Varadkar The Tánaiste Fine Gael

I had a chance to read the EUROSTAT report in detail the other day; it is worth reading in detail. It tells us the cost of living in Ireland is high and much higher than the European average. That will not come as a surprise to anybody as it was well known already, but when we drill into the detail, the report tells a slightly more complex story. There are countries where the cost of living is higher than Ireland's, including Norway, Switzerland and Iceland. There are countries that are similar to us, for example, Sweden, Denmark and Luxembourg, and there are countries where the cost of living is much lower than Ireland's, including Turkey, Bulgaria and Romania.

What is sometimes missing from the analysis and commentary around the report is the acknowledgement that salaries and wages in Ireland are much higher than the European average. They are 35% or 36% higher than the European average. There is a correlation between high-pay, high-income countries with a high standard of living and higher costs and countries where there is low pay, low standards of living and costs are lower. I would certainly prefer to aspire to be in that group of high-income northern European countries, even if it comes with higher prices, than to be a low-income, low-cost country. That is being missed from the analysis around that report. There is a clear correlation between higher salaries, prices and standards of living on the one hand and low prices, pay and standards of living on the other.

The Deputy is absolutely correct in terms of the impact that high energy prices have had on people throughout the country but his suggestion that we have done nothing is totally incorrect. We have reduced excise on diesel to the lowest allowed under European rules. We have reduced excise on petrol by 20 cent. If one looks at the price of petrol and diesel north of the Border and in Britain, France, the Netherlands, Switzerland and the rest of western Europe, it is roughly the same or higher. We have reduced VAT on electricity and gas to 9%, which is the lowest ever rate we have had on electricity and gas since VAT was invented, and taken €200 off people's bills. As we make plans for the budget, we particularly want to focus on those areas where costs are out of line with comparable countries in northern Europe, in areas such as childcare, public transport, education and rent, and see what we can do about those.

Comment on this

The Tánaiste is cheering for Europe one day and then telling us the EUROSTAT report is not accurate and that other places took more action. No place took any less action than we took here. The Government can take action on fuel. The price of fuel in some countries is down to €1.39 per litre. The Government wants its greedy paws on VAT and excise duties, which it has failed to remove because of the money coming in to keep higher wages and give an increase of €60 million or €70 million annually to higher civil servants, as it did last week. The Tánaiste did not call it a pay increase but a pay return.

To hell with na daoine beaga. To hell with the little people. Those are the people who are suffering. They are not evaluating the EUROSTAT report the way the Tánaiste is and trying to find and cherry-pick the good bits. They know the pain and suffering they are going through. They know how uncaring the Government of the Tánaiste, Fianna Fáil and the Green Party, supported by a selection of Independents, is and how little it cares about them. Tá siad ag fanacht leo. They are waiting for them. The Government refuses to act. It will not and seems to be unable to act. That is the sad situation. We cannot wait for a budget in October because, as we and the public know, any measures that would help the public will not come into effect until the following January or April. "Live, horse, and you will get grass" will not cut it anymore. The Tánaiste should do something for the people he is supposed to represent and was elected to represent.

Comment on this
Leo Varadkar The Tánaiste Fine Gael

The EUROSTAT report is entirely accurate. What I am saying is that it is half the story. Incomes, salaries and wages in Ireland are 30% to 40% higher than the European average. Of course, there is a correlation between that and higher prices. Countries with a very low cost of living in that report are Bulgaria, Romania, Turkey and other countries where there is very low pay. Of course, the price of something in a restaurant or a shop will be lower if people there are paid €1.50 or €2 per hour. We need to look at these things in the round when looking at these reports and we need to analyse them properly, not simplistically as has been done in recent times.

We have acted. We acted in January with an increase in the minimum wage, reductions in income tax, increases in pension and welfare. We have acted effectively since then, with our emergency budget. We made cuts in excise on petrol and diesel, taken €200 off people's electricity bills, increased the fuel allowance and cut VAT on electricity and gas to 9%. Other measures will kick in throughout the summer, including the back-to-school clothing and footwear allowance and the increase in the SUSI grant. We will come back in the autumn with more measures, of which some will take effect within weeks and others in January. This will be an ongoing cost-of-living crisis. It will not end quickly, unfortunately. That is why we need planned actions in the way that we propose.

Comment on this