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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Cost of living and grocery prices

Summary

Deputy Bacik and others raised severe cost-of-living pressures, including heating, food, and student poverty, and urged action on supermarket price gouging and child poverty. The Taoiseach cited past cost-of-living packages, said the Government was seeking evidence-based solutions through the CCPC and the Agri-Food Regulator, and argued future budget choices should target support at those most in need.

One in five families have cut back on or gone without heating in the past six months. Two in five are going without essential items, including food and medical appointments. Some 40% of parents are skipping meals so their children would have enough.

According to today’s Barnardos report into the cost-of-living crisis, parents across the country are facing impossible decisions. This is starkly highlighted in the quotes from the survey. One parent said: "We are just barely getting by … I never have money in my purse or account. We are worse off than before." Another said: "My children are now aware of our financial difficulties and it is impacting their mental health. We’ve had to... get rid of medical insurance, visit food banks, and stop after school activities."

Listening to the rhetoric from Government figures in recent weeks, you would think that the cost-of-living crisis had ended, but nothing could be further from the truth. Inflation may be slowing but prices continue to rise. Eurostat data show that household expenditure on goods and services in Ireland is the second highest in the EU. Rents are rising faster than at any point in the past 20 years. Renters must now pay in excess of €2,000 per month to keep a roof over their heads. That is if they can find anywhere to rent.

To compound matters, students and their families now face huge uncertainty as to fees for the coming year. A vast hike in fees from €2,000 to €3,000 has been proposed and there is no clarity from Government as to whether this will be the case or not. This is having a massive impact on households seeking to budget and plan for the year ahead, particularly households with two or more children in third level education. The Taoiseach must be aware of this.

All this is against the backdrop of threatened tariffs by Donald Trump. The international context is precarious but here at home it is precarious too. Why? It is because of nearly a decade of underinvestment by successive Fianna Fáil and Fine Gael Governments and failure to invest in the necessary public services and infrastructure that would provide a lifeline for struggling communities. We have had nearly a decade of failure to invest in social and affordable housing and in water and energy infrastructure, itself now slowing the pace of construction. It has been a decade without the development of decent disability services or provision in education, healthcare and childcare. That is why hard-pressed households face such insecurity now.

The Government's method of governance is about capitulating to the private sector and relying on the market to provide but the market cannot deliver decent public services. The over-reliance on developers has not delivered affordable housing, just as over-reliance on big supermarket chains has inflicted some of the highest grocery prices in the EU. The cost of a weekly shop is rising at more than double the rate of general inflation and those most affected are hard-pressed families. Will the Taoiseach give clarity on the measures he will adopt to tackle this grocery greedflation? Will he give students and families clarity on the level of fees they will pay in the year ahead?

Comment on this

I appreciate the Deputy's questions. We are under no illusions about the impact of the cost of living on families and people. The reality is there was an excessive inflationary spiral coming out of Covid and as a result of the Russian invasion of Ukraine and the consequential increase in energy prices. That did impact and that is why there were exceptional once-off cost-of-living packages in addition to budgetary measures in recent years. We are probably the only European Union country that was in a position to do the level of once-off cost-of-living packages we did because of successful management of the economy in recent years.

I take serious issue with the Deputy's assertion there has been a failure to invest in public services. Let us take education alone. This September, for the first time ever, we will provide free books for every child at primary and second levels. That is not once-off; that is mainstream in the budget. It is provided for now in the base budget for education. St. Vincent de Paul and others have said that has had a significant impact, particularly for families on low incomes. In addition, the hot school meals programme is now in virtually all schools. Again, it is a structural change provided for in the base budget. We have a summer meals scheme for children as well. I could add more. There is free public transport for children aged between five and eight years.

The public sector pay deal was negotiated. We introduced tax measures last year and a range of other measures. We extended the 9% VAT rate on gas and electricity. That measure will save money for hard-pressed families. In June the Minister, Deputy O'Brien, announced a 40% reduction in the renewable electricity PSO levy for 2025-2026.

From 1 June, women can receive hormone replacement therapy, HRT, free of charge. From the beginning of June, the carer's support grant increased to €2,000. That is the highest level ever and this has benefited approximately 138,000 carers. Last week, the income level disregard for the carer's allowance was increased, meaning more people qualify for the allowance and more than 5,000 carers will receive an increase in their payment. The back to school clothing and footwear allowance will be paid over the summer months. Childcare costs have reduced this year and for September, and fee caps will be in place. Some 96% of children aged between three and five are now in the early years programme. That demonstrates significant investment in childcare over the past number of years.

There is not credibility attached to the Deputy's assertion that there has not been investment in public services. There has been very significant investment in public services.

Comment on this

I listened carefully to the Taoiseach's laundry list of measures. Certainly, we welcome progress where it occurs. However, the reality for families is that the cost-of-living crisis is not a once-off. It is an ongoing crisis where people are struggling to make ends meet. We have put forward constructive proposals. My colleague, Deputy Ged Nash, put forward a Bill to tackle price gouging in supermarkets. We are asking the Government to adopt that constructive proposal. However, the reality is we are seeing child poverty still at endemic levels and student poverty now a reality too. Today at six o'clock, our colleague, Senator Laura Harmon, has called a protest outside the Dáil, along with students' unions, to protest against a hike in student fees this year. That hike would put hard-pressed households under increased pressure.

I ask the Taoiseach again whether he can rule out that increase from €2,000 to €3,000 this year. Will he take on board the constructive Bill we have put forward to ensure price gouging by big retail chains can be tackled so that families will see their grocery bills reduce and at last see transparency in the profiteering of big supermarket brands?

Comment on this

The Deputy may be aware that the Minister of State, Deputy Dillon, has met with the Competition and Consumer Protection Commission, CCPC, and has asked it to conduct an analysis of the Irish grocery retail sector, with a view to determine the existence of excessive pricing or not in an evidence-based way. We also have the equivalent of the agricultural ombudsman in terms of food prices. We are looking at strengthening the powers of the CCPC to protect consumers. Last week there was again engagement with the CCPC on the motor industry.

The Government is very committed to reducing the cost of living. I did not outline a laundry list of measures; they are substantive measures that actually have been mainstreamed into budget provision. This year we will move to mainstreaming with our budgetary allocation. It is exactly the same situation as last year and as we did then, the Estimates process and the budget will deal with all these issues in respect of supports for students.

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What about student fees? Is there any certainty on student fees? There is no clarity.

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There is no clarity on student fees.

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Looking at strengthening the powers of the CCPC is no good. You have to actually act when you are in government. The Government has been looking at strengthening its powers for years but it has not done it. The Minister of State, Deputy Dillon, asking it to do a review like it did in 2023, which did not achieve anything as the Government had not given it extra powers, will not produce anything different this time. Families all over the country are struggling to keep their heads above water. Every week it is a challenge. I am not just talking about the financial challenge, which is enormous, but the toll it is taking on people's well-being, who are having to continually count every penny to just pay for the basics. They are scrimping and saving to afford groceries. This constant pressure is exhausting and families are finding, after all the effort, they are still coming up short. Grocery prices are a runaway train and they simply cannot afford them.

The evidence this is an enormous problem is mounting. St. Vincent de Paul has said that almost 50% of the calls it receives are about a single issue, namely groceries. According to today's Barnardos' report, four in ten parents are skipping meals or eating less to feed their children. One parent told Barnardos this constant struggle has led to them feeling inadequate because they cannot provide for their family. Almost one fifth of children are missing out on school trips and activities as their families cannot afford them. In some instances, children cannot go to their friends' birthday parties because there is no money for a present.

A few months ago, the Taoiseach told the Dáil he will always prioritise the child who has been left behind.

What about these children?

The cost of groceries has soared by €3,000 for families in recent years. Where does the Taoiseach think they are finding this money? They just do not have it, and that is why an increasing number are borrowing just to pay for basics. One in three households is now taking on debt or going into arrears to meet day-to-day costs, adding huge stress to what they are already under.

When the Government talks about this problem, it seems to think it is in the past. It talks about prices having increased rapidly after Russia invaded Ukraine but does not acknowledge that those prices never came down. Grocery costs are skyrocketing again, increasing at three times the rate of inflation. Everyone doing the weekly shop can see this, so why can the Government not see it?

The Government could be doing a number of things. For a start, we need transparency about supermarket profits. We suspect Irish consumers are being gouged, but without transparency, it is impossible to prove. The regulators for food and consumer protection must be given more teeth to tackle the issue. The Social Democrats will introduce tomorrow in the Dáil a motion that outlines a number of solutions. Will the Government support our motion? Will it compel supermarkets to publish their profits? Will it finally take some action to control grocery prices?

Comment on this

Let me make one comment, which is probably an observation on the political world we are in today: all the parties on the left favour universality in everything in terms of provision and have not argued once today for targeting or prioritising those left furthest behind.

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Deputies

Hear, hear.

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Every single one of them.

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It has been very interesting that in the past ten days, including today, their entire focus has been on giving everybody everything. Whatever scheme is brought in-----

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That is not true.

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That is exactly what the Government has been doing for the past three years. This is why it is in this difficulty.

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Through the Chair, I did not interrupt anybody. It is a case of giving everybody everything. In the last budget, we took significant steps with the child support payments for both under-12s and over-12s.

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Child poverty has doubled.

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Sorry, Deputy Hearne is not leader yet.

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A Deputy

He can run for the Presidency as well.

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In the last budget, I itemised the issues. The free schoolbooks scheme is now part of the budget and of the base, which is very important. It is not once off or anything like that. It is the same with free transport for those aged between five and eight and the hot school meals programme. We did not extend VAT either. I have made it clear that in the next budget, for the Government and in the context of the programme for Government, investment in housing and social housing will be key in addressing child poverty. Disability has to be prioritised through income supports. A child poverty approach in the budget is essential. I have a child poverty unit in my Department that will come up with proposals. We are committed to this but I hope I get the Opposition’s support. It is easy to call for everything for everything but, actually, we would not have the finances over a period to sustain that.

We have invested hugely and we accept fully that grocery prices are at an elevated high. The rate of inflation has come down but that does not mean the new order has come down. Prices went up significantly in the past three years, particularly after the Covid pandemic and the energy crisis brought about by the war owing to the Russian invasion of Ukraine. I have no argument about that, and that is why there were very significant once-off packages on top of the mainstream provisions for children, in particular in schools, which did bring down the costs for families. I recall that every autumn parents used to dread having to buy the schoolbooks. It was a big problem for them. We have removed that, essentially. The hot school meals programme is also a huge intervention. We can refine and improve it in terms of the quality of food and get all that right but it is a big change. I acknowledge that we need to do more about child poverty but there is a choice facing everyone in this House.

Comment on this
Verona Murphy An Ceann Comhairle Independent

I thank the Taoiseach.

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There is only so much money-----

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Tax cuts to target child poverty.

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Verona Murphy An Ceann Comhairle Independent

Deputy O’Callaghan to respond.

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We could spend billions of euro but the challenge really is the question of whether those opposite have the political guts to target.

Comment on this

Absolutely.

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Does the Taoiseach have the political guts to make supermarkets publish their profits and have full transparency? This is what I asked him about. Does he have the political guts to actually answer the question I put to him? We are talking about parents skipping meals so their children can eat.

We are talking about situations where a child cannot go to a friend's birthday because there is not money for a present. Is the Taoiseach going to address these things? The Agri-Food Regulator last year wrote to the Government urgently asking for powers so it could do its job. Here we are, still waiting for the Government to act. Why has it not done that? Why is it taking this long? Will the Taoiseach compel supermarkets to publish their profits so there is full transparency and we can see what is going on? Will he take action on foot of that to deal with any price gouging?

Comment on this

Yes, we do have the guts to take on anyone who is engaged in price gouging, absolutely.

Comment on this

Why have you not done it?

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I think we need an evidence-based approach.

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Where is the evidence-----

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There is an agency there, the consumer and competition authority-----

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It does not have enough powers.

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The Deputies opposite know that. People come in here and make assertions but we have to do our business in an evidence-based way.

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And then you delayed my Bill by 12 months.

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In terms of the Agri-Food Regulator, we established it.

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Does it have enough powers?

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The former Minister for agriculture, Deputy McConalogue, brought that in precisely to get greater transparency in respect of the differentials between what the primary producer earns - the Deputies know the primary producer was a key motivator behind the introduction of that regulator - as well as making sure that the primary producer would get a better share of the entire supply chain in terms of the costs right along the way. There was an argument that the primary producers were not getting a sufficiency of income for what they were producing.

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Does it have the powers to do its job?

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The fundamental point is this. We recognise that there are significant high prices, particularly in groceries.

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Do something about it.

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The issue really is in terms of the next budget and the Estimates, how best we use the resources we have to help those who need it the most.

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