Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 92:

In page 120, between lines 11 and 12, to insert the following:

“Report on the VAT treatment of domestic energy bills

54. The Minister shall, within one month of the passing of this Act, prepare and lay before Dáil Éireann a report on the VAT treatment of domestic energy bills and options regarding the effective removal of VAT on domestic energy bills either through reduction or rebate, in the context of rising energy prices and their impact on low and middle income households.”.

This amendment looks for the Minister to take action on the treatment of domestic energy bills and options for the effective removal of VAT on domestic energy bills through either a reduction or rebate. This is in a context of rising energy prices and their impact on low- and middle-income households. Let me be clear we are looking for a temporary waiver which recognises there is a major issue with energy prices. The Minister may wish to hit back and ask me what side I am on in the great debate but next time he is talking to Secretary Yellen, or maybe President Biden, he might tell them they are on the wrong side of that debate as well because I do not think any carbon taxes are being introduced at a federal level at the minute. They have a different policy which is supply-side. That is what is needed. We need real investment to ensure we can allow for people to change their behaviour away from fossil fuels and carbon.

There have been 35 hikes in energy prices over the last period. The Minister has acknowledged to me in the Dáil that two European countries are engaging with the Commission on a temporary reduction of their VAT levels on energy. The Minister has made the point, and rightly so, that Spain, for example, was moving from a higher rate than we have. Ours is 13.5% while Spain's was over 20%. However, Spain has reduced energy bills by 11%. The Czech Republic has moved further and zero-rated energy bills. It is engaging with the Commission on this. What the Minister did not acknowledge in the Dáil debate is we have the highest level of energy bills. While other countries might have a higher rate of tax, when we compare the household in Spain, France or Italy to the Irish one we pay a higher cost in terms of our energy bill. Therefore, this pressure on families across the State is quite significant. It is probably felt in different ways in different places. We can see from the Central Statistics Office, CSO, figures that energy prices are increasing. Electricity has gone up. Gas has gone up. Home heating oil has gone up. Significantly, home heating oil has gone up the most. Indeed, in some cases it is more than two or three times more expensive than other ways of heating a home. Home heating oil is the dominant means of heating a home in more rural communities, especially those in the west, north west and Border areas. Unfortunately, these are also communities with lower disposable incomes and houses which are more likely to be energy-poor. This is a real pressure on people facing into this winter.

We are not arguing for reducing VAT on this forever. We are asking if the State can do something at this point in time to take the pressure off families who are at the pin of their collars as a result of these energy price hikes over the winter months. There are two ways to do that. The Government can do as other European countries have done by reducing VAT or follow the Czech Republic and zero-rate it. Alternatively, it can use the toolbox provided to members states whereby a refund is also possible. However, the Minister has decided on an alternative strategy, that is, to actually increase the price of these energy Bills come next year by increasing the carbon tax. That is not the great debate. I am serious. If the Minister thinks that is the great debate we are in serious trouble. The real debate is how to make the necessary investment across broad sectors of society to ensure people have the opportunity to make the transition. The Minister should also remember the biggest polluters are not individuals but large companies. Everybody has their role to play. I will say this again and he can brand me whatever way he wants. We believe in taxes that change behaviour. We have called for them in the past. However, we do not support taxes which are just going to make houses poorer for the sake of it when the Government is not providing alternatives. Thus what is missing in this Finance Bill are the type of initiatives we suggested. Examples of this include additional support for second-hand electric vehicles, additional support for those on lower incomes to purchase electric vehicles, additional support for households for retrofitting, the expansion of our public transport fleet and so on. These are not included.

Returning to the amendment, this is a temporary issue. It is what I would be doing in if I sat in the Minister's seat. I would be looking at introducing a temporary VAT rate of 0% over the winter months to help people with what are unprecedented and unexpected rises in their energy prices. Many households may be able to sail through but others simply were not budgeting for this and in the run-up to Christmas it is putting them to the pin of their collars.