Oireachtas Joint and Select Committees

Wednesday, 26 January 2022

Committee on Budgetary Oversight

Indexation of Taxation and Social Protection System: Discussion

Dr. Tom McDonnell:

Energy is fundamental. Energy and food are the fundamental units of the economy. I do not see making energy free as a merit good in quite the same way as education. I should have mentioned that healthcare should also be free, universal, single tier and so forth. I see energy as something that could be dealt with through secondary benefits, perhaps on a time-limited basis. When energy costs, for example, are accelerating as they are at present, there is a major issue in the short term. Targeted measures would be the answer to that. Remember that energy prices are following the economic cycle at present, which normally takes seven to ten years. In this case, it is happening in approximately 18 months to two years. We are seeing extreme volatility of prices. It is absolutely the case that we have an energy crisis at present, but if everything is framed in terms of the cost of living overall, then indexing to wages should resolve most of those issues over the medium term, while acknowledging that there is a necessity for short-term measures to offset the current cost of energy problems we have. I am not sure if that coherently answers the question.

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