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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Cost of living and inflation

Summary

Deputy Doherty challenged the Government on soaring inflation and the cost-of-living crisis, arguing families need urgent support rather than a summer break. The Tánaiste said inflation is at a 40-year high because of war and pandemic effects, but insisted the Government is responding with measures already taken and more to come.

Tá oibrithe agus teaghlaigh ar fud an Stáit ag streachailt leis an ghéarchéim le costais maireachtála, agus tá sé dhíth ar an Rialtas tuiscint an bhrú faoina bhfuil na teaghlaigh seo agus feidhmiú ansin chun tacú leo. In áit seo agus in áit cáinaisnéis éigeandála a thabhairt chun tosaigh, beidh briseadh ag an Dáil seo fá choinne an tsamhraidh agus beidh míonna deacra amach roimh go leor teaghlach.

The latest consumer price index, CPI, published this morning by the Central Statistics Office, CSO, shows that inflation has continued to rise to more than 9%, the highest rate in four decades. Workers and families are facing alarming increases in the cost of fuel, energy, food and transport. Persistent failures in housing and childcare see households, renters and families paying more and more for keeping a roof over their heads and raising their children. We on this side of the House all recognise that the causes of the cost-of-living crisis are driven by global factors, including the illegal Russian invasion of Ukraine, but also by domestic factors. The causes do not remove the responsibilities of Government.

The impact of this cost-of-living crisis hits lower and middle-income households hardest. That is clear to anybody who has heard from families who have had to turn off their heating or put less food on the table because they simply have no other choice. On in three households today are living in energy poverty. This week, we heard from the Children's Rights Alliance that 62,000 of children are living in consistent poverty. Most people are feeling the squeeze but lower and middle-income households are bearing the brunt. They need a Government that understands their struggle and responds to their needs. Today, this Dáil will rise for its recess and will not return until September, but workers and families will continue to struggle with this cost-of-living crisis week in, week out over those summer months.

The Tánaiste refused point blank to act on the calls from Sinn Féin to bring forward an emergency budget with measures that would protect and provide certainty and support for these households. Instead, he told them that they should wait until the end of September. This is despite organisations such as the Central Bank of Ireland, the Economic and Social Research Institute, ESRI, and our own budget watchdog all saying that the Government has the capacity to provide further support to struggling households and to provide it now. This support is necessary and would relieve the pressure households face and help them navigate through the difficult times in the days, weeks and months ahead.

For months now, Sinn Féin has proposed sensible and affordable measures that would provide real relief to these families by increasing social welfare rates in response to rising prices, introducing cost-of-living cash payments to those on low and middle incomes, reducing childcare fees, supporting renters by putting one month's rent back into their pockets and banning rent increases, providing greater support for more families with back-to-school costs, and reducing fuel costs for those struggling to heat their homes and fill their tanks. These are all measures that could have been introduced before the Dáil broke this summer, but they were not. They should have been acted upon. The Government should have listened not just to Sinn Féin but to the pleas and demands from ordinary people who are struggling just to get by.

We acknowledge that not everybody can be protected from every price increase. The Government can do and should have done more to protect and support workers and families but it decided otherwise. As this Dáil breaks for the summer, what is the Tánaiste's message to the tens of thousands of families who are struggling to survive and cling on and who so desperately need the Government to do more for them right here, right now before the summer break? Once this Dáil returns, will the Tánaiste commit to implementing the solutions we in Sinn Féin have put forward, some of which I listed today?

Comment on this
Leo Varadkar The Tánaiste Fine Gael

I thank Deputy Doherty very much. The numbers from the CSO this morning indicate that inflation has now risen to 9.6%, which is the highest rate of inflation we have experienced in 40 years. I think it confirms what people are experiencing in their daily lives. We see it at the fuel pumps, in the supermarkets and in our utility bills. The price of everything is going up and the price of nothing is going down. We face an unprecedented situation, however. We have war on our Continent for the first time in 40 years. We had a pandemic for the first time in 100 years with much of the snapback and demands contributing to inflation. We had the zero Covid policies in China. We are also at the end of an unprecedented period of monetary policy characterised by low inflation, low interest rates and central banks all over the world printing a lot of money. It is, therefore, an unprecedented set of scenarios. Things we have not seen in 40 to 100 years are leading to a global inflation crisis, which is resulting in prices rising at a faster rate than at any point in 40 years.

It is important to say that budgetary measures and actions the Government has taken and will take can help to ease the cost of living and burden of inflation for people. No budget, however, whether it is an early, late, emergency or ordinary budget, will get us on top of the inflation crisis. We need to tame inflation and that requires a comprehensive approach that includes international action, action at a European level and also domestic action. What we must do over the next six months to one year is get inflation down and tame it, not fan the fires of inflation. That will not help anyone in the long run. We must avoid that.

I note that the Deputy made no acknowledgement whatsoever in his contribution of what has been done to date, which I think was unfair and inaccurate. From listening to the Deputy's contribution, one would think that nothing has been done at all in the past seven months while this Dáil was in session. Let me recap on that. In January, we had an increase in the minimum wage, an increase in pensions, an increase in welfare payments, and a reduction in income taxes for low, middle and high-income people, all of which the Deputy's party opposed. Since then, we have had reductions in VAT on electricity and gas, reductions in excise on petrol and diesel, €200 taken off people's electricity bills, and an increase in the fuel allowance. Only this week, people saw an increase in the back-to-school clothing and footwear allowance for those least well-off families who need it most. Contrast that with Northern Ireland, where the increase was £7 or £8 or something in the back-to-school clothing and footwear allowance-----

Comment on this

They are preschool costs.

Comment on this
Leo Varadkar The Tánaiste Fine Gael

-----compared with €100 here. People will see in the next few weeks, for example, an increase in the SUSI grant for those attending third level. The budget in September will introduce a series of measures that people will see in their pockets within weeks, and then another set of more regular measures that will take effect in January 2023. Therefore, far from not responding to inflation and the rising cost of living, what people are seeing from Government is a dynamic response with action in January, action since January, action over the summer, more action in September and then more again next January. That is what is required because this is a dynamic and unfolding situation.

Comment on this

The Tánaiste may think this Government is dynamic in responding to the needs of citizens out there. Let me say this, however. When the Tánaiste steps outside the bubble of Leinster House, stops the backslapping and hooraying and all the rest in terms of his own colleagues, and talks to the ordinary people out there, they will tell him that tens of thousands of them are struggling to get by. We have seen survey after survey and report after report telling us how difficult it is for people. After everything the Tánaiste just talked about, one in three families in this State are still in energy poverty and struggling to make ends meet. Organisations far beyond Sinn Féin such as the Central Bank of Ireland, the budget advisory watchdog and the ESRI are all saying the Government has the capacity to do more and do it now. However, the Government refuses. The clear message from Government as it heads off into the recess for the next eight weeks and with a budget 12 weeks away is that people are on their own for the next while.

There are no further interventions. That is a devastating message for families. It is a crucifying message because many of them are struggling to pay the bills at the end of the week. What message does the Tánaiste have for that cohort of individuals, the many thousands who are being abandoned as the Government goes into the summer recess?

Comment on this
Leo Varadkar The Tánaiste Fine Gael

That is a false narrative. It is also a populist narrative. I spend as much time outside this House as the Deputy does, as do my colleagues on these benches. I spend as much time talking to my constituents - working people, middle-income people, business people and people from all backgrounds - as the Deputy does. I do not know what the Deputy will be doing through July or August, by the way, but I can guarantee him that Ministers will be continuing to work. There is a Cabinet subcommittee meeting this afternoon, for example, to discuss the situation with migration and people coming from overseas. There are trade missions next week and there will be a Cabinet meeting at the end of July, so we will be working throughout July as normal with the exception of coming to the Dáil Chamber. Throughout August we will be preparing the budget in September. I do not know what the Deputy will be doing, but he will not be doing any of those things.

Comment on this