Neale Richmond (Dublin Rathdown, Fine Gael) | Oireachtas source

I am very grateful for the opportunity to respond to some of the issues raised in the debate on the Sinn Féin motion on the increases in fuel excise effective from 1 August and 9 October this year. Sinn Féin has expressed the view that the restoration of excise duty of 1 April should be reversed and that both the final restoration of excise duty due to take place on 1 August and the carbon tax increase on 9 October should not proceed. I have noted the discussion this evening and want to respond by re-emphasising the factors behind energy inflation and the capacity of the Government to mitigate inflation and restating the importance of the carbon tax to Government policy on climate action. Climate change is real and there is no point in denying it. We have to respond accordingly.

It is important to remind the House that the driving forces behind energy prices are largely beyond the control of the Government. This point has been discussed at length over the past few years and we have made it clear that there are limitations to what the Government can do in its response. We have said many times that the final retail price of fuel is determined by several factors, most of which are due to global phenomena and are beyond the Government’s control. Market dynamics have driven have driven the pre-tax cost of crude oil up in recent weeks.

This has impacted average retail prices of diesel and petrol. We see this ebb and flow constantly. The Government has acted to relieve the impact of increased energy prices through a number of measures, including targeted welfare interventions, electricity account credits, reducing VAT on electricity and gas, reduced public transport fares and reductions in excise on diesel and petrol, as outlined earlier by my colleague.

The Government recognises that there is volatility in the crude oil market which is impacting prices. However, the Government believes that, rather than accepting this motion, budget 2025 is instead the appropriate time for it to set out its taxation and expenditure decisions in response to the cost-of-living pressures while also keeping an eye on diesel and petrol prices in advance of 1 August. Deputy Harkin cited the prices at two points in the last number of years. We all remember that in the intervening period prices went over €2 per litre. It was not that long ago. We have to recognise that. The Deputy mentioned the price of fuel back in 2020, at the outset of the pandemic. We all know what has happened since then globally and the impact that has had on global energy prices. We cannot run from Russia's invasion of Ukraine and its impact on global energy markets, whether gas or oil. It is very real and it needs to be stated when putting those prices into context. Deputy Harkin has asked for petrol prices to be looked at ahead of the next increase on 1 August and the Government has undertaken to keep an eye on that, as she has asked. That is a fair request and one that will be taken into consideration.

It is important to recognise that while there is a cost-of-living crisis, there is also a significant climate change crisis and the Government cannot ignore it, even though there are some Deputies in this House, although they have left at this stage, who simply do not accept that this is an issue. There has to be balance in the response to these two issues. In the medium to long term, the Government fundamentally believes that the best way to protect Ireland from the impact of increased global fuel prices is, of course, to reduce our dependence on them. We will achieve this through the progressive decarbonisation of Irish society and through the steps that will be taken to meet the Government's commitment to reach net-zero greenhouse gas emissions by 2050. The carbon tax has an important role to play in achieving this objective. We have to accept that it has a role to play.

Sinn Féin's initial proposal was to fully restore excise rates on 1 April 2024. However, now it is saying that it should not go ahead and that the planned increase in carbon tax in October should not proceed. The cost in 2024 of the measures proposed in the Sinn Féin motion is approximately €165 million. We can add that to the pile.

I will conclude by stating that, against all that, our economy and people have demonstrated remarkable resilience over the last years despite facing multiple successive headwinds, including the global challenges that I have outlined. The timely nature of Government supports to date has played a pivotal role in safeguarding both businesses and households during these challenging times. We can talk about business supports that have been provided through the pandemic and the €250 million that is currently being allocated through the increased cost of business grant, registration for which has skyrocketed in the past ten days. We can talk about the package of energy grants announced by the former Minister, Deputy Coveney, in the last four weeks. We can talk about the new low-cost retrofitting loan that was launched last week, which, Deputy Shanahan should note, will allow people to get a loan of up to €75,000. We have seen massive numbers of people across the country, rural, urban and everywhere else, again in genuine retrofitting. Now we need to get the people who cannot afford that. That is why we are targeting them with these specific loans. We can also reference the ongoing work being put in by the Ministers, Deputies Burke, Higgins, Humphreys and O'Donovan, to look at a genuine package of measures that can be taken in the meantime in advance of the real decisions that will be made in the budgetary window. We are only a quarter of a way through the budgetary cycle of this calendar year. I think people should remember that.

By responding swiftly and decisively, Government supports have helped to ensure the resilience of our labour market. Having just come from the employment brief, I can report that the labour market is close to full employment, with an unemployment rate of 4.3% in March. We now have 2.71 million people at work in this State, which is a greater number of people at work today than the entire population of the State in the 1950s. At a time of global economic downturn, we are looking at an economy that is continuing to grow and putting us in a position to provide real supports and realistic budgets that can support people at every stage of life in every aspect.

Deputy Pringle said that this is not relevant to the man or woman on the street. I fundamentally disagree. We note that inflationary pressures have eased significantly from their peak in summer 2022 and that makes a difference to people in how far their pay packet will go at the end of the week, how they can do their weekly shop and how they can pay for the cost of things. The Deputy keeps referring to us having some sort of neoliberal agenda. I really have to ask if he has even read anything about neoliberalism because if I am a neoliberal, my years spent studying political science were for nothing. It is an easy trope to throw around a Chamber with someone you simply disagree with when you want to diminish the very real factors. The inflation rate fell to 1.6% in April, its lowest rate since June 2021. An average inflation rate of 2.1% is expected for the year as a whole. Key to this will be continued decline in energy prices as wholesale gas price cuts are passed through to consumers. Every Deputy has to acknowledge, when it comes to wholesale gas cuts, that there is a lag. If we just take the wholesale price of today and say that should be the price that people receive in their bills today, we are not realistically understanding how the energy market works and how it gets from the field to the house. Core inflation is expected to decline to an average of less than 3% for the year in total.

It is against this backdrop that budget 2025 is being framed. The work on that has already started. We will once again need to strike the right balance, ensuring that budgetary policy is calibrated in a manner which avoids adding to the price pressures in our economy while at the same time supporting households and delivering the infrastructure and public services that our society needs. Monitoring energy price change will remain a priority for this Government. Our response to date has been comprehensive and immediate. While many of the forces dictating the current situation are outside our control, the Government will continue to use the policy responses we have to mitigate the impacts on businesses, consumers and ordinary working people across the country.

We must remain committed to the policies which are critical to meeting our obligations on climate action. The carbon tax is a key pillar of Government policy for transition to a decarbonised society. The policy of ring-fencing carbon tax receipts for welfare supports for those at risk of energy poverty also ensures that this transition is done in a just and progressive manner. Accordingly, I do not accept the motion before the House and I present the Government's amendment for consideration.

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