Mr. Sebastian Barnes:

Ireland is in a difficult position as an importer of energy. When world energy and food prices go up, the country as a whole is made poorer. Then there is the question of how it is distributed across different households. That is a legitimate question for political choices. Our concern is to ensure the economy remains balanced within that context. We see a mixture of these unusually large increases in nominal terms in welfare rates, but, as we stated clearly in our report, they are less than the rate of inflation. On a permanent basis, if nothing else were to change and the forecasts were to be correct, people would ultimately face higher prices and potentially be worse off. However, it is important to look at the package as a whole. There are temporary measures. If we consider the forecast for 2023, some people on lower incomes will be fully compensated for inflation in 2023 but that does not fully make up for what was lost in 2022.

It is also important to say with respect to the balance between permanent and temporary measures, that we do not know what will happen to energy prices. If energy prices were to fall because the supply adjusts more quickly or demand falls more quickly because people find energy savings, prices might come down again. In some ways it is good that the Government has only locked-in part of the permanent increase and the temporary part could fall away. It is a delicate balancing act but the Government has managed to provide substantial support to these groups-----