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Dáil
‹ Leaders’ Questions

Cost-of-living budget measures

Summary

Deputy Nash says the forthcoming budget must compensate PAYE workers for last year’s decisions and address energy costs. The Tánaiste rejects demands to disclose the full budget in advance but says the Government will provide assistance through several measures.

Energy costs are the absolute top priority for people across the country. The October budget in a couple of weeks’ time will be all about the cost of living. It has been a busy few weeks for the Tánaiste and his Cabinet colleagues. Two weeks to the budget and Simon’s sieve gets leakier by the day. There will be indexation of income tax bands and credits for PAYE workers but nothing to address the hit they took last year when working people were made to pay for tax cuts for diners and developers. There will be a fiver in the fuel allowance but no commitment yet to the extra four weeks again next year. There will be an extension of the cuts to excise on motor fuels and, as the Tánaiste has said time and again, something will be done to reduce the price of home heating oil. These measures will barely make a dent in the real costs for families. The Government seems only to be concerned with certain sectors of society - only some energy users and only some road users.

Electricity and gas prices are already going up by at least 10%. Public transport fares are to rise by even more. The price of diesel and kerosene will rise further and it is oil and energy companies that are profiting massively off the crisis caused by Trump. Why is the Government not taking a comprehensive approach to energy affordability? The impact of higher oil prices is already feeding into higher inflation. Input costs for construction, transport, fertiliser and so on will lead to even higher food and housing costs next year. Wages will have to rise but the Government is turning its back, for example, on public sector workers. Families are really struggling with soaring grocery bills and unaffordable rents. They need to know the Government’s plan on energy costs. The Tánaiste needs to front up with them now.

Last week, finance ministers from across Europe met with the Tánaiste. They gathered in Dublin. Six of them wrote to the Tánaiste a number of weeks ago in relation to taxing the windfall profits of power companies. A week on, where does the Government actually stand? I know what the Tánaiste said earlier but will this happen? We know that carbon tax will be paused again but consumers are getting the price signal of higher oil prices and that will change behaviour. What we are missing is the ring-fenced funds to help families who were hit the hardest. A windfall tax is needed to support households with targeted energy credits and to fund retrofitting. It could help to plug the carbon tax gap too.

The energy crisis has been rolling on for months - in fact, it has been rolling on for years - and we need a proper plan. In May, the Minister for energy updated the Cabinet on progress from the national energy affordability taskforce. An action plan was supposed to be submitted to Government by the autumn - we have heard little of it since - focused on short, medium and longer-term measures to support households and businesses. That is all this Government seems to be doing. I have three questions. Has the Government received the energy affordability action plan and will it be published before the budget? Will it put an actual windfall tax on power companies and when? On behalf of families throughout the country, I have a very clear question: will the Government finally commit to a €400 targeted energy grant for families across the country?

Comment on this
Simon Harris The Tánaiste Fine Gael

I am slightly confused. On the one hand the Deputy is chastising me for talking about what might be in the budget and on the other he is asking me to give it all out today. Those two things are a little bit contradictory even for me to justify in my own mind. I certainly make no apology nor do I need any permission from the Opposition to talk directly to the people of Ireland about the Government's intentions and not allow those intentions to be misrepresented by the Opposition. I want the people of Ireland to know and will continue to communicate directly with the people of Ireland in relation to our budgetary plans, in relation to our plans to deliver on our programme for Government commitments about making sure work pays and that people who work hard in this county can get ahead and not just get by. We are going to make progress in areas like childcare and there will be a significant package of supports for energy in the budget in 12 days' time.

I know we have this debate regularly and the Deputy will not be surprised to hear me say this but I want to say it again: when he says our packages to date have just supported parts of society or some sectors of the economy, I have to push back on that. The economic advice available to the Oireachtas through the chief economist to my Department is very clear that the package of measures we have put in place has suppressed inflation in the overall economy by 0.6%. A PAYE worker, even one who does not drive a car, is actually benefiting from a lower rate of inflation than we would have otherwise seen. There is a direct correlation between the commodity price and general inflation in the economy. I want to make that point.

I also want to push back on the idea that we do not want to do a deal with public sector workers. We want to sit down with them and for work to pay in this country for everybody in the public and private sectors. We value the role and contribution of our public sector workers. We have constructive trade unions in this country. I said that to them directly this week. They played a big role in this country in the darkest economic days. We want to get around a table and have a conversation about a new public sector pay deal.

On the Deputy’s three specific questions, I have received, I believe, or certainly I am aware of the content in relation to the national energy affordability taskforce report. There are a number of proposals there that Government will be able to advance and bring forward. I need to seek clarity from the Minister, Deputy O'Brien, as to his intention in relation to publication and the likes, and I do not wish to speak for him other than to say there is good work being done there. I am taking the constructive, genuine way in which the Deputy wants to see it and consider what might be there, so I will speak to Government colleagues in relation to that.

On the issue of energy in general, the Deputy is asking me to clarify what will be in the package and whether there will be certain proposals. I accept and acknowledge that the Deputy has made constructive proposals too. The final composition of the energy tax package has not yet been decided by Government. It will be decided in advance of budget day. There will be some temporary measures to help in the here and now. The fuel allowance scheme, which is permanent, opens on Monday. I reiterate that for people watching. There also need to be more permanent measures in terms of how we can help people transition. We will consider all of the constructive ideas we have heard in this House in the composition of that.

On the windfall energy tax, given that we hold the Presidency of the Council of the European Union, Ireland has to play an honest broker role in trying to get people around the table to see if there is a consensus or majority view. That is what we kicked off in Dublin Castle the last week. We asked the European Commission to do a body of work and report back to ECOFIN on Thursday week.

Comment on this

We know the decisions taken in last year's budget, where PAYE workers were simply ignored by this Government, have made things much more difficult for ordinary working families throughout the country to absorb even small increases in food and energy prices. The Government needs to make up for that in this budget. The Tánaiste knows that himself. In my view, that is a decision that will haunt this Government and its relationship with PAYE workers for the duration of its term. We know that energy costs will absolutely dominate the political discourse. It is what everybody is talking about on the streets, at football matches and in our offices and clinics. It is of huge concern. We cannot keep making up energy policy and interventions on the hoof. I ask again: why is the energy affordability plan we were told to expect by the autumn to enable us all to plan for the budget in a comprehensive way being hidden? Why is it being concealed? What is the Tánaiste's position on energy credits? He is prepared to tell the media what his view is on excise cuts, carbon tax, kerosene and VAT and so on, but not on energy credits. We need to know.

Comment on this

If you had come into Government when you had the chance, we would be able to tell you now.

Comment on this
Verona Murphy An Ceann Comhairle Independent

Please, Minister. That is unnecessary.

Comment on this
Simon Harris The Tánaiste Fine Gael

I have direct responsibility in government for taxation policy, excise tax, and the application of tax on carbon. Therefore, when I am asked a direct question, I answer it. The issue in relation to energy credits and energy supports in general is a matter for the broader Government to consider in the round. I genuinely believe, and I think the Deputy does deep down too, that people are less concerned about the modality by which we help people and more concerned about help. What I am saying very clearly to people is there will be a number of ways we will endeavour to help people with the cost of living. They do not quite think in the way we think in this structured bureaucracy we work in, sometimes. They want to know if they are going to be helped to get through the winter, if they will have more of their take-home pay, if their childcare bill is going to come down and if somebody is going to do something in this global chaos of energy to try to suppress Ireland's exposure to it to some degree. The answer to all of those questions is "Yes". The Government will come forward with a range of measures. I acknowledge the constructive suggestions from some Opposition parties. We will take them on board. We will consider all of these in the round and we will bring forward an energy package on budget day, which is just 12 days away.

Comment on this