Oireachtas Joint and Select Committees

Wednesday, 1 June 2022

Committee on Budgetary Oversight

Fiscal Assessment Report: Irish Fiscal Advisory Council

Mr. Sebastian Barnes:

There are two issues. The Government has introduced a number of largely temporary but untargeted measures and packages. Those measures are sizable so the increase the Government has made is about the same size as the welfare package in the budget last year. It is not a negligible measure. Members can discuss whether it is enough.

On timing, the council does not have a view as to when additional measures should be announced. Some of the current measures expire in October, so that is a natural point for the Government to consider it. The summer months are easier because people are not having to pay for heating to the same extent. The council really has no view on that. It is a judgment the Government has to make. It is a democratic decision.

As to how to do it, which is a different question, it is about trying to target that help more than it has been targeted thus far. We are trying to get the balance between helping the most vulnerable people and not putting too much money into the economy at a time when inflation is already high.

Obviously the best way of doing that is taking a given amount and targeting it at the people who need it most. That could be done with measures more tied to the welfare system. It could also be done with measures related to the tax system because some of the people who are having a significant impact would not be covered by the welfare system. There are a number of things for the Government to do. It might need to be a bit creative in the way in which it does them. We also know there is a rural-urban difference. Pensioners, especially in the winter, tend to spend much more on heating as a share of their incomes. There is a lot here and there are not necessarily perfect ways of doing it. It is for the Government to come up with a way of achieving that.

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