Oireachtas Joint and Select Committees

Wednesday, 30 November 2022

Committee on Budgetary Oversight

Fiscal Assessment Report: Irish Fiscal Advisory Council

Mr. Sebastian Barnes:

If we look at the chart that Deputy Ryan might be referring to, based on the ESRI research, we can see that more support went to the lower income people. The composition is a bit different. The way it appears in that figure is a little complicated because it is comparing with a different place, which I will not go into. The negative blue bars indicate that the permanent measures did not fully compensate people. It does not reflect the fact that welfare rates did go up quite substantially. There is a very particular way of reading that chart.

Targeting has been a concern in terms of the balance between the overall amount of support we can provide without leading to too much inflation. The better targeted a measure is, the more we can help people without triggering more inflation. That is something we have been looking at quite closely. It is also difficult to do. Focusing on social welfare is a good way of targeting it, but there are people who do not qualify for social welfare who are still on relatively low incomes, who have limited savings and who are under a lot of pressure. That is why some of these measures are not targeted, but perhaps they are helping those wider groups. Perhaps the State should have better ways of being able to reach a wider range of people, but we do not know exactly what options it had. Probably some mixture of the two is okay, but keeping targeting, which did improve a bit with the budget, is a good thing. The design of quite a lot of the supports in Ireland compared with other countries has been relatively good. At least with supports that provide the same amount to everyone, it is better than something that is related to the amount we spend, because the people who spend the most in cash terms are the wealthier people. That is what we really want to avoid, as it does not seem like a good use of resources at this time.