Inflation, business costs and fuel prices
Michael Collins criticised the Government for inaction on inflation, business pressures and fuel costs, warning businesses were being left to fail and households were struggling. The Tánaiste replied that he relied on official data, said many businesses were busy but facing staffing and energy-cost pressures, and compared fuel prices with nearby countries.
The latest statistics from the EUROSTAT agency estimate that Ireland's annual inflation hit 9.6% in June. This is the highest rate of inflation since 1983. Ireland's real economy is in a very dire place today. The Government is good at cherry-picking certain economic variables and spinning those to make matters look better but the sad reality is that this country is now more unequal than at any point in our history.
A recent nationwide survey of 2,300 people by The Mirror highlighted that 64% of Irish people feel they are living in relative poverty. Eight out of ten Irish people are struggling to pay their bills and more than half are under pressure with their mortgage repayments. A figure of 64% are eating less healthy to save money, 58% spend less money on their children, 88% are staying at home and are stopping social activities and 39% have asked family and friends for financial help. The findings of this survey tally with what the people in my constituency of Cork South-West tell me.
The cruel and heartless decision by the Government not to introduce an emergency budget illustrates that it is out of touch and cares little about the struggles of these people. Instead, the Government is behaving like a British landlord in Ireland during Famine times and looking the other way. It is a shameful and despicable treatment of the Irish people.
The current cost-of-living crisis is financially crippling to all lower-income earners, including pensioners, struggling mortgage holders and the unemployed. It is also having a disproportionate impact on all rural residents. Farmers face a 300% increase in the cost of fertiliser combined with the huge impacts of fuel and feed costs. Fuel costs are leading to fishermen's boats staying tied up at piers across the country. The skimpy packaging measures announced by the Government to date are grossly insufficient. It feels like a wet sticking plaster on a wound given the depth and impact of this crisis. That is why a robust emergency budget, for which the Rural Independent Group tabled a motion back in February and which the Government blocked, is now long overdue.
The Government has been idle, allowing costs to soar while simultaneously benefiting from record VAT excise duties and carbon taxes from fuel, home heating, electricity, household goods, building materials, fertiliser and animal feed. The only meaningful way to tackle current inflation and protect consumers is through taxation reliefs. Unfortunately, swift Government action on this or any public crisis is rare or reserved only for the large corporate vested interests such as banks that were bailed out by Fianna Fáil and the Green Party. Standing by and paying lip service to this emergency is no longer a tenable position to hold, however. Measures introduced in a budget that will be brought forward by two weeks in the autumn will be too late and pushes the response out into 2023 for many.
We need action now from Fianna Fáil and Fine Gael. Will the Tánaiste immediately introduce an emergency budget? Will he immediately drop the carbon tax on fuel, which will help struggling families, or will he brazenly sit on his hands leaving the Irish people to lose their homes, fishing boats, businesses, lorries and livelihoods?
Comment on this
I am not interested in cherry-picking data or statistics. I am a medical doctor by training. I take science and data seriously and I always like to see and know the numbers. When I seek the data, I seek them from reputable independent bodies such as the Central Statistics Office, CSO, or the Central Bank, which act independently and produce robust data that we can stand over. I tend to be a little more sceptical when it comes to surveys that are done by lobbyist groups, interest groups or NGOs because very often those data are non-scientific.
The facts are that the employment level is at the highest it has ever been in the State at 2.5 million and median incomes are rising, notwithstanding the impact of inflation. We would not see income tax receipts being as strong as they are if that were not the case. There are more people at work in the country than ever before, with employment growth in every region of the State. The highest employment growth last year was in the Deputy's region of the south west, followed closely by the south east.
The CSO compiles data on income distribution. It is contained in the survey on income and living conditions, SILC, which is published once a year. It is the only robust scientific data on income inequality. It measures something called the Gini coefficient. In Ireland, we have seen income inequality narrow and reduce in the last five to ten years. It is trending downwards, unlike in most developed countries. The number of people experiencing consistent poverty and of people at risk of poverty and deprivation can go up and down year by year, but it has been trending downward significantly over the past five or six years. Those are the facts. People are absolutely entitled to their opinions and ideologies but they are not entitled to their facts. Those are the facts for anybody who is interested in them.
However, I acknowledge that there are real risks, particularly with inflation being so high at 9% or 10%. It is the highest we have seen in 40 years. People are really feeling the pinch and there is a real risk this year that for the first time in a long time we will go backwards, with real incomes falling, increasing poverty levels and possibly increasing inequality. That is something I and the Government do not want to happen. That is why we are doing what we are doing - the measures we have introduced already, which I have outlined previously in the Dáil, measures that will take effect over the summer with regard to back to school and back to college and measures that will take place after budget day in September, immediately putting money in people's pockets, while more will be implemented in January. This is a dynamic response to a cost-of-living crisis which, unfortunately, is going to continue for some time.
Comment on this
I thank the Tánaiste for his reply. The Government is simply going to stand idly by and let many businesses go to the wall over the next few months. I hope that during the summer recess the Tánaiste will speak to the owners of those businesses, as I have done in places such as Castletownbere, Clonakilty, Bandon and even at the Dunmanway Agricultural Show last weekend. The public are rightly furious and angered by the Government's inaction, hiding behind Putin's war and hiding behind taking urgent measures to reduce VAT on fuel because of Europe. The price of a litre of diesel in Malta this weekend was €1.21. Malta is in Europe. The price of a litre of diesel in Ireland, also in Europe, is heading to €2.30, with the Government taking almost 50% in tax. It is the Government's green buddies who have destroyed this country, aided and abetted by dreaming Fianna Fáil and Fine Gael Deputies. Will the Tánaiste commit to eliminating the excise duty, carbon tax and VAT on both fuels, including agricultural diesel, from now until at least 31 December? Waiting for September or October and then for 1 January 2023 is not a sustainable position to cling to. The Government must give people a break, let them see their families, let them drive to work and let them live affordably. At this stage it is the very least the Government can do for the Irish people.
Comment on this
I can assure the Deputy that I talk to business owners all the time. I am the Minister for Enterprise, Trade and Employment and that is my job. What they are telling me is that, by and large, they are busy. The biggest problem they have at present is finding staff. That is the biggest issue that is brought to me from business, and not just in hospitality and retail but across the economy. They also tell they are struggling with very high increased input costs, particularly regarding energy, and other costs as well. I very much understand that. However, in terms of insolvencies, and the Deputy can check the figures for himself as they are publicly available, we have not seen a huge number of insolvencies, thankfully, at business level in recent years.
That may increase over the next few months because of the withdrawal of the employment wage subsidy scheme but we are seeing insolvencies that are at relative lows.
I do not know what the situation is in Malta. I will check it out. It might be that it has a special arrangement as it is a relatively new member of the European Union-----
Comment on this
We would like a special arrangement too.