Cost of living and back-to-school support
Mary Lou McDonald and Róisín Shortall pressed for immediate action on rising prices, energy bills and back-to-school costs, arguing the Government response was too slow. The Tánaiste defended existing supports, including the clothing and footwear allowance, higher SUSI grants and school-meals measures.
We have just two weeks left in this Dáil term, which is two weeks for the Government to intervene with measures to alleviate the enormous pressure the cost-of-living crisis is placing on households. Yesterday, the Ministers for Finance and Public Expenditure and Reform, Deputies Donohoe, and Michael McGrath, respectively, announced to great fanfare that budget 2023 will be brought forward to 27 September. This does not mean very much to workers and families who are at breaking point today, 5 July. A week is a long time for households when every euro counts. It is a very long time when one cannot afford to pay extortionate energy bills or put fuel in the car or food on the table. It beggars belief that people who will struggle to make it to the end of this week are being asked to wait another 13 weeks for help from the Government.
This lack of urgency is especially stressful for parents who face the most expensive back-to-school period for a generation. As the Tánaiste knows, children go back to school in late August, not at the end of September. Schoolbook lists have already arrived, Bus Éireann has sent out the reminder emails for the fees for school transport, the letters requesting voluntary contributions are on their way and school uniforms, sport and PE gear will have to be bought in the next few weeks. Parents will fork out a small fortune. Many will be forced into debt simply to get their children back to school. These are the households pressed to the brink. My office is inundated with calls from families that are at breaking point. I am sure the Tánaiste has received similar calls. These are calls from families who never thought that they would need support from the State or from charities, much less from food banks, in order to make it to the end of the week. They have no idea where they will find the money to get their children back to school in September. The budget on 27 September will be far too late for these families. They do not have the luxury of waiting another 13 weeks for the Government to show up. They need action now.
Tá teaghlaigh i ndeireadh na feide le costais scoile ag ardú as cuimse. Caithfidh an Rialtas dul i ngleic leis seo láithreach. Tá mé ag iarraidh ar an Rialtas síneadh ama a thabhairt maidir leis an liúntas éadaí agus coisbhirt don scoilbhliain nua, agus an liúntas sin a ardú, chun sos a thabhairt do thuismitheoirí atá faoi bhrú millteanach.
Sinn Féin will bring a motion before the Dáil tonight. The motion includes proposals that would ease the financial burden of back-to-school costs and give families a real break in the here and now. As part of these measures, we are asking the Government to act immediately to improve the back-to-school allowance in two ways. First, we are asking it to extend the allowance to middle-income households. These are the households that currently receive no State support but who are at the pin of their collar trying to make ends meet. Middle-income households must get the back-to-school allowance and the help it offers.
Second, for low-income families and for those on fixed incomes, we want the Government to increase the back-to-school allowance by 50% to help meet the soaring costs of getting children back to school.
These are very reasonable, sensible and necessary asks. There is an urgency now in all of this. If action is taken in respect of these matters, it makes a massive difference at what is a very tough time for so many families.
Comment on this
I acknowledge that we are experiencing a cost-of-living crisis. We are seeing inflation at a level that has not been seen for almost 40 years. While this is driven by international factors in the main, it is very much being felt in every home across the State. Everyone is feeling the squeeze and, of course, those on lowest incomes are feeling it most acutely.
The Government's response has been dynamic and we have been responsive to the needs of people during this period of high inflation. That response started in January, when the budget measures kicked in. There was an increase in the minimum wage, reductions in income tax, increases in pensions and welfare payments and a number of targeted supports, particularly in respect of the fuel allowance. That was worth approximately €1 billion. Since then, another €1.4 billion has been given back to people in the form of: a reduction in excise on petrol and diesel; a 9% VAT rate on electricity and gas - the lowest such rate ever on both; a deduction of €200 from people's energy bills; cheaper public transport; cheaper school transport; and a targeted fuel allowance payment to the poorest families in the State.
Over the summer, people will see increases take effect as well. In the budget, there was a small increase in the back-to-school clothing and footwear allowance based on inflation projections at the time. Families will be receiving that payment starting next week. More than 120,000 families in the State will receive the back-to-school clothing and footwear allowance next week in respect of over 200,000 children. Because going back to college is, like going back to school, expensive, people will see the changes that were announced in the budget taking effect. There is an increase in the Student Universal Support Ireland, SUSI, grant and there will be more people qualifying for that grant, together with an improvement in the adjacency payments. A package is in place to help with the cost of going back to school and to college. That is an increase on last year and it will kick in before budget day at the end of September.
We will have the budget in September. There will be two sets of measures. These are measures that are one-off and can take effect within weeks of the budget being announced. The latter means that people will have more money in their pockets come the autumn. Then there are the regular actions that will take effect on 1 January.
As the House can see, the Government is responding to this crisis as it unfolds. There has been action in January and since then and there will be action over the summer, in September and again next January. That is the right approach to take because this is an unfolding situation. It is completely appropriate that the Government should help people with the cost of living, given that our economy is strong and we have the financial firepower to do so.
It is also important to point out that no budget on its own is going to enable us to tame inflation. A comprehensive anti-inflation strategy is required which involves: action at an international level, working towards peace in Ukraine; action on monetary policy by international central banks; action at European level by the European Central Bank involving changes to the European fiscal and state aid rules and other things; and, of course, action at home, particularly to bring down some of the high structural costs that exist in this country and that are out of line with the level of such costs in other northern European countries. One example I can give in respect of the latter is the cost of childcare.
Comment on this
I thank the Tánaiste for his reply. Those high structural costs, as he knows, long predate this particular cost-of-living crunch, which I am sure he would acknowledge.
The Government's response to these matters has been slow. It has lacked urgency but we can agree to disagree on that. What I would like us to agree on is that families preparing to get children back to school in late August need help and assistance now. I put it to the Tánaiste again that it is crucial that middle-income families have access to a back-to-school payment.
The Tánaiste pointed out that there was some improvement in the budget. That is now grossly insufficient.
We calculate that as many as 500,000 households need to be given this payment in middle-income brackets. Furthermore, those on lower incomes and fixed incomes need a substantial hike in the level of the payment made to them. Will the Government move on this urgent matter now? The children will go back to school in August and as I described, the bills and the pressure for payment is happening now and we need action now on these precise measures.
Comment on this
If there is one thing we absolutely agree on it is that back-to-school is really expensive for families, and so is back-to-college. That is why there is an increase in the back-to-school clothing and footwear allowance which will be paid from next week. It is why there is an increased SUSI grant for those going to third level and is why we changed the rules only in the last few weeks to allow students to earn more over the summer without affecting their grant. These are changes that are taking effect over the course of the summer. However, I acknowledge, particularly in respect of back-to-school, that when we made those changes on budget day, we anticipated inflation being much lower than it is now. For that reason, the Ministers, Deputies Michael McGrath, Humphreys and Foley, have been in discussions today and yesterday to see if we can do anything to enhance the back-to-school package, acknowledging that September will come too late for back-to-school. That work is under way.
Comment on this
We all know that the cost of living is out of control, inflation is now almost 10% and prices right across the economy are soaring. On Friday Electric Ireland hiked its prices for the second time in just three months, adding a further €350 to the cost of gas and €164 to the cost of electricity. Other providers will undoubtedly follow suit. Families who are already struggling to pay their bills and put food on the table must also cope with the huge cost of back-to-school, which costs up to €1,500 per child. Where does the Tánaiste think those families will get the money for back-to-school, because it is not coming from the State?
The back-to-school allowance was actually more in 2007, 15 years ago, than it is now, which is really pathetic. Is it any wonder that last year almost one in four families went into debt to pay back-to-school costs? This year the figure is likely to be significantly higher than that because the Government is refusing to help. The Tánaiste and his Cabinet colleagues have acknowledged that ordinary workers and families are under immense pressure at the moment. They have also said that exceptional measures in addition to the budgetary measures would have to be taken to assist them. However, when he announced the summer economic statement yesterday, the Minister, Deputy Michael McGrath, said that once-off exceptional measures would not be announced until the September budget, which is three months away. That delay will guarantee one thing: more and more people who are barely scraping by at the moment will fall into poverty and debt.
Why is the Government waiting? Is it because it has run out of ideas or is it because of division within the Government? We know that there is disagreement in Government about whether it should introduce another universal electricity credit. Is it refusing to act now because of wrangling behind the scenes about the nature of the measures to be introduced? We heard much about listening to the experts during the Covid pandemic, but the budgetary advice the Government is getting now appears to have fallen on deaf ears over recent weeks. The Government is not listening to the experts such as the ESRI which has said that the Government has the capacity to introduce targeted measures now and critically they must be targeted at those families most in need.
It is truly unforgivable that the Government is about to swan off on its holidays when the Dáil goes into recess for two months in the knowledge that so many people are in dire need of assistance.
Comment on this
Therefore, will the Government reconsider and to do the right thing? Will it introduce an emergency budget now before it is too late for so many families?
Comment on this
I again acknowledge on behalf of the Government that back-to-school is a very expensive time for families and puts much pressure on family budgets, as is also the case with back-to-college.
The Government is responding. The back-to-school clothing and footwear allowance will be paid from next week. There is an increase to €160 for children aged four to 11 and €285 for children aged 12 years and older. There is an increase in the third level grant, the SUSI grant, that kicks in in September. We have also made changes to make more people eligible for that grant and to allow students to earn more over the summer without it affecting their grant next year.
As I mentioned earlier, Government accepts that when we announced the increase in the back-to-school clothing and footwear allowance in January, we did not anticipate that inflation would be as high as it is now. Our projections were for inflation of maybe only 2% or 3%. It is now closer to 10%. It is precisely for this reason that the Ministers for Education, Social Protection and Public Expenditure and Reform were in discussions yesterday and today at the request of the Taoiseach, the Minister for the Environment, Climate and Communications and me to see if they can come up with some measures to enhance supports available to families when it comes to back-to-school. We acknowledge that the end of September is too late in that regard and that work is being done at the moment.
Comment on this
I do not know if the Tánaiste realises how difficult it is for low-income families. The Society of St. Vincent de Paul is really concerned about the summer holidays because it does not know what is going to happen to those families that are utterly dependent on breakfast clubs and school meals. Where is the food going to come from during the summer holidays? What will happen when parents just cannot afford food, school uniforms, shoes for going back to school or books? The Tánaiste talks about looking at this again. An enormous catch up is required in order to bring the back-to-school allowance anywhere close to what is required. How will parents cope when they get a request for a so-called voluntary contribution because the State refuses to adequately fund all our schools? We need answers to these questions now. Poor families need answers now. They cannot wait three months.
Comment on this
I understand it very well. The hot school meals programme, which is working extremely well, was introduced by my colleague, Senator Regina Doherty, when she was Minister for Social Protection. The back-to-school clothing and footwear allowance is being increased by the Minister for Social Protection, Deputy Humphreys. The former Minister for Education, Deputy Joe McHugh, introduced the grant to encourage schoolbooks rental schemes and extended that to all DEIS schools so we understand very well that the cost of going back to school is very high for families. This is nothing new but has been the case for years. We were working on it then and under this Government, we are working on it now. In particular, the Minister for Education, Deputy Foley, put much effort into discussions today and yesterday with the Ministers for Social Protection and Public Expenditure and Reform to see if there is more we can do in addition to what is already committed to - an increase in the back-to-school clothing and footwear allowance kicking in next week and an increase in the SUSI grant for third level kicking in in the next few weeks. However, we acknowledge that when those decisions were made last year inflation was not anticipated to be as high as it is now and that waiting until September is too late specifically when it relates to back-to-school and back-to-college.