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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Budget 2023 cost-of-living measures

Summary

Deputy Bacik says the budget spreads support too thinly and fails to tackle structural problems facing vulnerable households. The Taoiseach replies that the package is targeted at lower-income groups and is substantial in scale.

Yesterday, budget 2023 was published after what seemed like the longest lead-in ever. With so many leaks, over so many weeks, we were led to believe that this would be a substantial package of measures designed to get struggling communities through this bleak winter and beyond. Unfortunately, that was not what we saw yesterday. What we saw was money spread so thinly that it will go unnoticed by many, and many of those who will benefit will be struggling already by the time the winter is out. There is little there to address the structural problems that make people so vulnerable to market failure and a real and biting cost-of-living crisis. We should have seen a very substantial budget. Instead, what we got was a treadmill budget, with the Government spending money in order to stand still. The Government has not provided people with any real pathway forward to get us through the bleak winter ahead and beyond.

When we strip away the €4.1 billion worth in short-term measures between now and New Year's Eve, the budget package for next year will, in truth, do little or nothing to transform this country or the lives of those who are struggling. I refer, for example, to the young people trapped in spiralling rent prices who feel forced to emigrate because they see no future here since they cannot aspire to ever owning their own homes. Once January arrives, it now looks like a mini-budget may well be necessary to address the real supports that are necessary for households through this winter and beyond.

Yesterday, the Minister for Finance revealed that his Department had revised its inflation forecast to 8.5% for 2022 and more than 7% for next year. With that in mind, and bearing in mind what I have said, does the Taoiseach agree with my colleague, Deputy Nash, who said yesterday that it looked like we would need a mini-budget in January? Does he agree that such a drastic measure may well be necessary to address the real inequalities that were entrenched in some of the measures in yesterday's budget? I refer, for example, to the tax measures. The reality is that next year, somebody earning €100,000 will be €831 better off. By contrast, somebody who earns between €25,000 and €35,000 will only take home an extra €191. The renter's tax credit will at best pay for just one week's rent for an average person renting in my constituency in Dublin. The €600 energy credit will not even cover one third of the increasing bills people are going to face this winter. What we saw were thinly spread, short-term payouts yesterday. What we need are structural changes in housing, care, climate, and in work. We saw no ambition or vision from the Government in yesterday's budget. It is not a budget that works for all. It is time for the Government to get off the treadmill and to move us forward with proper, substantial and targeted measures that will chart a pathway forward towards an Ireland that works for all of us. Does the Taoiseach agree that the budget has patently failed to do that?

Comment on this

I do not agree. I take the opposite view. I have already articulated to the House what the Irish Fiscal Advisory Council stated about the budget. If we apply the ESRI's simulating welfare, income tax, childcare and health, SWITCH, model, the budget gives most to those who need it most. Those in the lowest income cohort are getting the most from the cost-of-living package and the core budget measures for 2023. That is in net disposable income. The lowest income groups will get the most from this budget.

In terms of the structural issues, Deputy Bacik is aware that this is a package of €11 billion. It is not spread thinly. There are some fundamental changes happening in education, and not just in terms of school transport, which is free from this September, albeit there were issues with the greater numbers that applied - up to 21,000 extra. That is €650 saved for many families. We can now add the fact that, from September 2023, we are looking at free primary schoolbooks for all children. That is a structural watershed change in terms of how we provide books and education materials to primary schoolchildren.

The primary school pupil-teacher ratio has now been reduced to an historic level of 23:1. This is the third year in a row that the Government has reduced the pupil-teacher ratio, which is a very positive structural change in terms of equality and fairness. The school meals programme is being extended. Close to €100 million is being allocated to schools before the end of this year to deal with the energy costs that they have undoubtedly incurred because of the current crisis.

At third level, students will see a one-off reduction of €1,000 in their college fees this year and €500 next year. All SUSI maintenance grants have been increased by 10% and 14%, with a one-off double monthly payment before Christmas.

The reason for those cost-of-living measures before Christmas, many of which are one-off payments, is to deal with the crisis that has been brought about by the war in Ukraine. The latter is a very serious issue internationally, and we have got to reduce the pressure on people that it has brought about. Those measures will be impactful. We cannot take them all in isolation. One has to combine a lot of the social protection measures. I refer, for example, to the very significant lump-sum payments that will be paid to a whole variety of social welfare recipients and low-paid workers as well. As the programme for Government states, we need to do something in terms of middle-income earners and those on more than the €40,000 threshold because people were going onto the higher rate too early. If one looks at the energy credit, one can combine all of that-----

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The time is up.

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-----and see that it adds up to a significant level of support for people in what is a very difficult situation.

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