Dr. Karina Doorley:

Overall, we welcome the withdrawal of the temporary cost-of-living measures, simply because the fact that they were temporary brought a lot of uncertainty to budgeting and people's expectations of where they would be the following year. However, because they went on for a number of years, households became reliant on them.

In some senses, they papered over the fact that households on fixed incomes like pensions or social welfare payments were not seeing wage growth but were seeing price growth. Their social welfare payment - their core rate - was not keeping pace with that. That was all fine while they were receiving temporary cost-of-living measures but now that they are gone, it is probably becoming a bit more real that their permanent income is not keeping up with how prices have evolved over the past number of years. While the withdrawal is welcome and necessary, it paints a picture of how the permanent tax and welfare system has kept up with changes in the economy over the past couple of years. That is something to keep in mind for next year's budget. For the past number of years, we have been suggesting that some sort of benchmarking exercise should be carried out to see if social welfare payments are adequate for the expenses households face. Now would be a good time to think about an exercise like that when price growth is returning to normal but price levels are much more elevated than they were.