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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Budget response to cost of living

Summary

Deputy Mattie McGrath attacked the Government's handling of inflation and asked about energy taxes, Barryroe, and gas exploration. The Tánaiste defended the Government's relief measures, denied blocking licences, and said taxes had already been cut on fuel, electricity and gas.

We are just under two weeks away from the budget and we are in the middle of the worst environment of spiralling inflation and interest rates, which is piling huge, savage pressures on every man, woman and child in this country and every business sector also. Despite these challenges, we have a Government that is on the ropes and completely out of ideas. It is now clear that the Government lacks the required energy, pardon the pun, to decisively help the public and to do what is right. Instead what we witness is a complete detachment from reality and chaotic messaging by Government Ministers.

One of the scariest kites in the political sky at the moment is the Government's projected €6.7 billion tax and spending package for 2023 - regardless, in other words, of what may happen if we have another winter of continuing crisis next year. The Government has completely failed to protect households and businesses from energy price rises. It has continued to drive ahead with more inflationary carbon taxes at a time when energy prices are at their highest level ever. The Government's narrow and disjointed focus on electricity credits, which are a short-term measure, has failed to address the cost of the problem that is there now. There is the coupling of gas and electricity prices and the record level of Government-mandated energy taxes, which are taking in billions in extra income for the Department of Finance. What the Government is doing is a con job, really. It completely rejected all calls from my rural Independent colleagues and me to slash the carbon tax to 5% until this crisis ends - not for ever. The carbon tax should be axed. It is costing every household a minimum of €600 this year. I am talking about the Government's carbon tax, which it voted for, supported by the Opposition as well. The Government then imports oil from dodgy dictators when the Russian supply is cut off.

We are in the worst energy crisis and cost-of-living crisis in generations. Fianna Fáil, Fine Gael and the Green Party, and some Independents, like to add even more fuel taxes to be more punitive and to lump more hardship on ordinary people.

Hiking the carbon tax further in the budget at this time would be completely irresponsible and would send out a clear message that the Government and the Ministers could not care less if people freeze or starve in their houses this winter.

In reality, the carbon tax is an unfair punishment that barely affects the carbon emissions - that is the fact of it - and the Government wants to increase it. The Government voted to increase it annually without even having a debate, so get real here. The Government should stand by the people who elected us all to this Parliament and who now need help, not sending press releases and mixed messages. The Government should cut the carbon tax and all the energy taxes, which would be something tangible we could do in this House, as well as capping the big profits of the electricity companies.

Comment on this
Leo Varadkar The Tánaiste Fine Gael

It is not fair to say that the Government has not acted to help households and families with the rising cost of living. As recently as January, all the budget measures kicked in such as lower income taxes and increases in the minimum wage, the pension, weekly welfare payments, and the fuel allowance.

In spring, the Government intervened again by reducing excise on petrol and diesel, by 20 cent and 15 cent, and reducing the cost of green diesel. We reduced VAT on electricity and gas to 9%, the lowest ever rate. We gave households €200 off their electricity bill. There was also a bullet payment of the fuel allowance.

In the summer, the Government intervened again by providing increases in the student universal support Ireland, SUSI, grant for students. There was an increase in the back to school clothing and footwear allowance for those who needed it most. A public sector pay deal was agreed in recent weeks, which is about to be voted on. The increase to the national minimum wage, which was announced yesterday, is worth €1,600 per year to a person working full time on low pay.

We will take further action in the budget which will take the form of increased welfare and pension payments. The Minister, Deputy Humphreys, is examining what we can do on the fuel allowance, in particular making it available to more people. There will be a tax package meaning working people will be able to keep more of the money they earn. There will be actions to help people with energy bills in particular. What is seen from the Government is a dynamic and evolving response to what is a rapidly changing situation. That will have to continue to be the case because we do not know how high bills will go or for how long this will go on. The response is not a blank cheque. The right response would not be a blank cheque. It is dynamic response, responding to the situation as it develops and emerges.

As the Deputy knows carbon tax is not a budget measure. It has already been legislated for and the funding from it is ring-fenced for climate action, green farming, retrofitting, and many other things.

Comment on this
Leo Varadkar The Tánaiste Fine Gael

The approach taken by the Government to date, since the changes in May, is that where the carbon tax increases, it is offset by other measures. That was introduced last spring with the reduction in excise on petrol and diesel so that people do not experience that increase in their pockets.

Comment on this

I accept certainly that there were efforts made and some support given but if the Tánaiste calls this a dynamic response from the Government, you can call me Davy or some other name from Mars or some place. It is shocking. Why is the Government so staunchly opposed to bringing in oil from Barryroe and to gas exploration off our coasts? Will the Tánaiste accept the fact that the data centres are guzzling electricity and will continue to do so? Will he accept that the fastest way to help our citizens is to cut the energy taxes, which is a budgetary measure? The Government has a trick o' the loop job done on the carbon tax in saying that it is not a budgetary measure. Governments passed it here for ten years. Every Member, bar six or seven of us, voted for that in this House. The Government cannot con the people. It can take tangible measures instead of window dressing and moving money here and there. People are hurting. They are in an awful situation. The Government made a mess of school transport with its big announcements, which were ill-thought out or not thought out at all. So the Government's thought process seems to be divided. All it seems to want to do is keep the Minister, Deputy Eamon Ryan, in power. Whatever he wants, the Taoiseach to be and the current Taoiseach, ask him "How high?". The Minister is destroying our nation, our families and our children, and Fianna Fáil, Fine Gael and Independents are supporting him and his Green Party. Independents are giving other Independents a bad name by supporting the Government on every whim.

Comment on this
Leo Varadkar The Tánaiste Fine Gael

Just to be very clear, we are not opposed to bringing more gas ashore from Corrib if there is more available-----

Comment on this

The Tánaiste blocked the licences.

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Tánaiste without interruption.

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Is the Tánaiste's memory gone? He blocked the licences.

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Leo Varadkar The Tánaiste Fine Gael

-----and we are not opposed to Barryroe either.

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Yes, you are. You voted it down recently.

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Leo Varadkar The Tánaiste Fine Gael

I have not blocked any licence nor has the Minister, Deputy Eamon Ryan.

Comment on this

Who is telling the truth, Tánaiste?

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Leo Varadkar The Tánaiste Fine Gael

There is an obligation on the company to honour the terms of its licence and that involves demonstrating that it has the financial wherewithal to exploit those resources.

Comment on this

Of course they have.

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They are all gone.

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Leo Varadkar The Tánaiste Fine Gael

The Deputy mentioned cutting energy taxes. We have cut energy taxes. We took 20 cent and 15 cent off the cost of petrol and diesel-----

Comment on this

And tuppence on green diesel.

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Leo Varadkar The Tánaiste Fine Gael

-----reversing several years of carbon tax increases in reality. We have cut VAT on electricity and gas to 9%.

Comment on this

Ask the people; they will tell you.

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Leo Varadkar The Tánaiste Fine Gael

It is 20% in Northern Ireland and Britain. The VAT on electricity and gas in Ireland is 9% - the lowest it has ever been. As the prices of gas and electricity continue to rise, the proportion of taxes which the Government gets falls. That is the reality of the situation we are facing.

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