Mairead Farrell (Galway West, Sinn Fein) | Oireachtas source

Yes. These sections provide for multi-annual increases in carbon tax. I am concerned that they will have a consequential effect on lower income households. In June 2019, the ESRI published the report, Carbon taxation in Ireland: distributional effects of revenue recycling policies. In its research, the ESRI found that carbon taxation is found to be regressive, with poorer households spending a greater proportion of their income on the tax than more affluent households. In its modelling, the ESRI found that with an increase in carbon tax by an additional €30 per tonne, every household bears some cost but the cost is greatest for the poorest households. Comparing the first and fourth quartiles, it indicated that poorer households suffer disproportionately more from carbon taxes. In addition, single households with children are the most affected by this policy. The trajectory set out in last year's and this year's Finance Bill is an €80 per tonne increase in carbon tax. The ESRI made it clear that the regressive nature of carbon tax can be offset by recycling revenue and offers the distributional effect of different recycling policies.

In its manifesto for the 2020 election, the Green Party proposed gradually increasing carbon tax in each of the next ten years until it reaches €100 per tonne and introducing a mechanism to return all the revenues raised from further increases to citizens by social welfare payments and tax credits. That policy platform seems to have been abandoned in this Finance Bill and I wish to raise a number of issues the Minister can address in this regard. In the note provided by the Department of Finance, the combined proceeds of the 2020 and 2021 increases in carbon tax amount to €238 million. A total of €48 million was allocated to targeted social protection intervention. That is 20% of carbon tax revenues. That is a total departure from the Green Party's manifesto proposals to return the revenue raised to households through social welfare payments, as it has reduced from 100% to 20%. While these sections provide for multi-annual increases in carbon tax, there is no such commitment for multi-annual increases in social welfare payments to offset the regressive nature of carbon tax on lower income households. Will the Minister make a commitment that if these sections are agreed, the Government will hard-wire multi-annual increases in social welfare payments in the upcoming social welfare Bill?