Mr. Brendan O'Connor:

I will make a very brief point. Deputy Healy-Rae made reference to mom’s purse. He is speaking there to inflation and to the cost of living in a general sense, and I like the way he has put it. We have had big increases in the Irish economy in gas and oil prices and we know why that happened. These were obviously rising last year as well. There were very strange things going on in gas markets in the world. Gas is usually bought in a therm - do not ask me to explain what a therm is or what it looks like - and, generally speaking, it costs about 50 British pence for a therm. It has been like that for a very long time where it may be 40 cent in the summer, where one is not using a great deal of gas, and 60 cent, perhaps, in the winter. It increased considerably last year and breached the £1 mark and was £4 at one stage during the early days of the war. These are price levels we have never seen in natural gas and there has obviously been a big oil price shock. The cost of fertiliser is up approximately 150%, and this is also a by-product of natural gas. Wheat, corn, soya beans, cooking and sunflower oil, one can name any product, and they have all increased greatly in price. These are all things we import.

Earlier on we spoke somewhat about food prices and capping such staples. We domestically produce some of these, such as cooked chickens or unprocessed foods, but we import many of these. Essentially, income in Ireland is going to producers of fossil fuels around the world and the economy as a whole is poorer.

There is also then this debate or judgement, and one is getting into the core of policy here which I will not really comment on, about who takes that burden, be they households, firms or the Government. Previously and certainly in the 1970s, and I have followed much of the discussion that has gone on recently about things like stagflation, which is where there is high inflation and low growth, the view at the time was that governments should borrow a great deal of money, run massive deficits and try to protect the full economy from the oil price shock as it was at the time, and from OPEC essentially. Growth rates collapsed afterwards and unemployment completely skyrocketed.

The judgement that is being made now is that the Government will bear some of the cost and try to do this in a targeted manner. That then becomes a decision, judgement or analysis as to whether that is enough, but much of the analysis, which I believe Mr. Kinnane mentioned in his opening statement, has shown that most of the gains have been to lower income households, which is what I think one probably tries to do when one targets these measures. At least the gains from those are going to the types of households that one wants to target these measures at. The higher income households, obviously, have a great deal of savings from the pandemic, and the analysis shows that things like the types of subsidies and allowances Mr. Kinnane spoke about are going to the lower income groups. That is probably as much as I can say without going into policy.