Oireachtas Joint and Select Committees

Wednesday, 7 September 2022

Committee on Budgetary Oversight

Updated Economic and Fiscal Position in Advance of Budget 2023: Discussion

Photo of John LahartJohn Lahart (Dublin South West, Fianna Fail) | Oireachtas source

I just want to repeat where I was coming from on corporation tax. I have been consistent on this and on the Irish Fiscal Advisory Council's role for six years. I hope there are not too many constituents watching this discussion. I suppose I am playing devil's advocate but committee members are here to interrogate certain issues.

The Government has already expended €6 billion, which is substantial. Some of the measures are clearly not adequate but the measures on diesel and petrol succeeded in keeping prices dampened a little, although they later went up. Fuel prices dropped a little. We were seeing prices well in excess of €2 per litre but people can now get unleaded petrol at a price of €1.81 per litre. It is 30 cent dearer than it was but the Government reduced excise and it costs €9 and €12 less for a tank of diesel and petrol, respectively. That is not enough.

Some measures worked very well. One issue I highlighted in my party was the change to monthly medical expenses, for which the threshold dropped from €120 to €80 in the space of 18 months, giving a significant saving. It is a very helpful and clearly targeted measure. I favour the kinds of measures that stop money leaving people's pockets as much as those that put money into people's pockets.

The challenge for the Government is that the once-off measures we are talking about in September will run out, by and large, on 1 January 2023. The package worth several billion euro will run out and we will have to look at another package. On the other side of that coin, what is stopping the Government from taking the approach it took during Covid when it fulfilled its side of the social contract by shoring up people and businesses? I have received many inquiries from people, particularly owners of small retail businesses, who are suffering hugely. Other members noted that fuel bills in schools have doubled or tripled and we are not even into winter time. We are talking about some of the catastrophic measures that might be required against the backdrop of energy being weaponised. What is stopping the Government from shoring up the economy, society and people in the way it did at the height of the pandemic?

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