Richard O'Donoghue (Limerick County, Independent Ireland Party)
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I ask everyone to turn off their mobile phones and devices or put them on silent.

Before we begin, I wish to explain some limitations to parliamentary privilege and the practice of the Houses as regards references witnesses may make to other persons in their evidence. Witnesses are protected by absolute privilege in respect of the presentation they make to the committee. This means they have an absolute defence against any defamation action for anything they say at the meeting. However, they are expected not to abuse this privilege and it is my duty as Chair to ensure that this privilege is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.

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Today marks the second of two engagements on the topic of budgetary responses to the energy crisis and cost-of-living pressures. During these two sessions, we are engaging with academic experts, trade unions and affected groups. We are exploring the way in which a series of budget measures can be implemented to respond to the short- and medium-term impacts of the energy crisis and cost-of-living pressures related to the conflict in the Middle East. I would like to welcome a number of witnesses. From the Irish Congress of Trade Unions, I welcome Mr. Ger Gibbons, social policy and legislative officer; from the Nevin Economic Research Institute, Dr. Tom McDonnell, co-director; from the Society of St. Vincent de Paul, Ms Louise Bayliss, head of social justice and policy, and Ms Allison O'Malley Graham, research and policy officer; and from Social Justice Ireland, Ms Michelle Murphy, research and policy analyst, and Ms Susanne Rogers, research and policy analyst. The committee welcomes the opportunity to engage with you. I thank you for being here today. As we have quite a number of witnesses, I ask that they keep their opening statements to five minutes. I will have to be very strict on the five minutes because we have so many witnesses.

I now invite the witnesses to make their opening statements.

Mr. Ger Gibbons:

On behalf of the Irish Congress of Trade Unions, I thank the committee for the invitation to discuss budgetary responses to the energy crisis and cost-of-living pressures. ICTU is the representative body for 46 affiliated unions and seven associated bodies on the island of Ireland. These unions and bodies have a total membership of over 550,000 in the Republic and 200,000 in Northern Ireland in every urban and rural area, making ICTU the largest civil society organisation on the island.

Many trade union members across the country watched in amazement at the Government’s reaction to the April fuel protest blockades culminating in a bespoke package for agricultural contractors, farmers and hauliers. While these sectors have legitimate issues with the rising cost of fuel, why are they more worthy of costly supports than others such as the hundreds of thousands of workers struggling with cost-of-living pressures for some time? Real wages rose by 0.5% in 2025. One in five workers is low paid. One in 20 experiences in-work poverty and that is after social transfers such as the working family payment. Rates are twice as high for those on part-time or temporary contracts. The trade union movement fully acknowledges that the Government is not responsible for the fuel crisis, but it is responsible for the policy options it chooses in response. Special packages tailored for and delivered to those shouting the loudest have led many workers to conclude that reasonableness and moderation do not achieve what illegal blockades can. There is palpable anger among workers at the obvious double standards at play. If the Government is neither willing nor able to adequately address the energy crisis and cost-of-living pressures faced by workers, particularly low-paid workers and workers in rural areas, who spend a larger proportion of their incomes on energy and transport, then unions will have no option but to seek to resolve them exclusively through pay bargaining. The trade union movement wishes to engage with the Government on measures we see as essential to protect workers and their families. We welcome engagement such as this today as part of that process.

To that end, I will set out a number of measures. They are not exhaustive but are indicative of the types of measures we see as necessary. First, ICTU has long advocated for a fairer and more progressive taxation system. We do not advocate a narrowing of the tax base and we concur with the 2022 report of the Commission on Taxation and Welfare that there needs to be a meaningful increase in taxes in the medium to long term if the country is to meet the challenges it faces. However, we have always expected that tax bands would be indexed annually to take account of rising wages so that workers are not worse off and subject to de facto stealth taxes. Budget 2026 did not do this. Therefore, there should be a double indexation of relevant tax bands.

Second, the capitulation to hospitality employers in budget 2026 was neither economically necessary nor responsible. It is a flagrant waste of taxpayers’ money and a handout to low-paying employers that boycott and hence stymie the operation of industrial relations institutions established by the Oireachtas to improve pay for some of the lowest paid workers in the country. This costly subsidy should not proceed. Instead, there should be a temporary, for example six-month, reduction in the standard VAT rate from 23% to 22%. This would cost approximately half of the 9% VAT rate.

Third, we welcomed the previous Government’s decision to reduce the cost of public transport, particularly for young people, after Russia’s full-scale invasion of Ukraine in 2022. We therefore advocate a further significant cut in the cost of public transport across the country, an expansion of services in rural areas and a bespoke package for public servants obliged to use their own vehicles for essential travel.

Fourth, there needs to be a meaningful increase in welfare supports as well as reforms to transition the welfare system to one based on income-tapered supports.

We acknowledge that the measures we advocate have budgetary implications greater than the amount saved by not proceeding with the 9% VAT subsidy. I therefore refer the committee to the revenue-raising measures we proposed in our previous pre-budget submissions, particularly those concerning capital taxation, almost all of which were based on measures proposed in the report of the Commission on Taxation and Welfare. I am happy to take any questions.

Ms Louise Bayliss:

I thank the committee the opportunity to discuss this important topic. I am joined by my colleagues Michael Higgins, national member support manager, and Allison O'Malley Graham, research and policy officer.

With approximately 10,000 members on the island of Ireland, we have key insights from members who directly assist households in the current crisis. Despite successive cost-of-living measures, our evidence shows that poverty is becoming more concentrated and more severe for specific groups, who are falling further behind. Targeted, evidence-based supports are now urgently needed. Using the most recent SILC data, the updated minimum essential standard of living data and the direct experience of our members, we would like to share our concerns about certain groups in Ireland. The SILC data published in March showed a worrying trend. While the consistent poverty rate dropped in the general population from 5% to 4.7%, the rate for older people living alone jumped from 5.2% to 9.6%. This is particularly stark given that one-off supports and energy credits were still in place at the time of the survey. MESL research shows this is especially concerning for older people in rural areas who face greater income inadequacy due to their reliance on oil heating and private transport.

While the consistent child poverty rate dropped from 8.5% to 7.8%, this was not shared equally. Two-parent families with up to three children saw their rate fall from 6% to 4.2%, in sharp contrast to children in one-parent households, the majority of which are headed by women, where the rate jumped from 11% to 13.4%. Children in one-parent households are now more than three times as likely to live in consistent poverty. While budget 2026 increases to the child support payment had a positive impact, specific additional measures are still needed for one-parent households.

We are deeply concerned about households where someone has a disability. The consistent poverty rate stands at 13.9%, measured when one-off payments and energy credits were still in place. According to Disability Federation Ireland, these households lost an estimated €1,264 following budget 2026, at the same time that inflation returned to its highest rate since January 2024. This combination of reduced supports and rising costs places these households under acute and compounding financial pressure.

We welcome the ongoing consultation around a cost-of-disability payment but these households cannot wait for that process to conclude before receiving meaningful support.

On housing, the at-risk-of-poverty rate in the general population stands at 12.6%, rising to 19.7% after housing costs. For households in receipt of supports, such as HAP or rent supplement, the rate is 20.5% before housing costs but rises to 58% after them. That figure speaks for itself. We cannot discuss cost-of-living pressures without addressing the profound impact the housing crisis is having on poverty rates. Homelessness represents the most acute form of poverty we are discussing. For the first time ever, the number of people in family homelessness breached 10,000. Out of 17,517 people officially recorded as homeless, 10,072 were in family homelessness, including 5,571 children. Budgetary measures must be considered in the context of providing families with adequate income to keep them out of homelessness. SVP has developed practical responses to energy poverty, including our energy voucher scheme and utility partnerships. Mr. Higgins can speak to those initiatives and what our members are telling us about the coming winter.

Moving to our recommendations, we would highlight three priority areas for the committee’s consideration. First, strengthen targeted income supports for those most at risk. This includes enhancing the living alone allowance and increasing the qualifying criteria to include lone parents living independently. We also need index-linking of income disregards to the national minimum wage. Second, provide immediate support for households facing unavoidable additional costs. An interim cost-of-disability payment is needed to provide relief while longer term reforms are developed. The additional needs payment should be used proactively to ensure households do not fall below a minimum income level after housing costs. Third, protect households from energy cost pressures. The fuel allowance should reflect annual energy costs so that its value is maintained over time. The household benefits package has not increased since 2013 and its real value has been significantly eroded, so it should also be linked to the cost of energy units. These are practical and targeted measures that would help prevent deeper poverty among those most at risk. Finally, and possibly most importantly, we call on the Government to proactively prepare for winter 2026-2027 and to convene an emergency energy summit, including key stakeholders and civil society.

My colleagues and I are happy to take questions.

Ms Susanne Rogers:

Social Justice Ireland welcomes the opportunity to make a submission to the committee. In the context of a prolonged energy crisis and rising cost-of-living pressures, we believe Government’s response should be targeted and should prioritise those in our society least able to absorb the shock of rising costs. Since 2022 Ireland has experienced a series of energy shocks, which has led to a prolonged spike in energy prices and knock-on impacts for businesses and households over this period. This has led to a sustained increase in energy and food inflation, eroding income gains for low- and middle-income households and reducing their purchasing power. The most recent shock, driven by the current war on Iran, will further impact vulnerable groups as we face a potentially prolonged period of increased oil prices and the impact that will have on consumer prices for the coming months.

Government has announced two packages of measures to address the impact of the current crisis: a package of energy supports in March and a package of fuel supports in April. The decision in March to extend the fuel allowance by four weeks, providing some relief to vulnerable households, is welcome but it is not a long-term solution to energy poverty or energy arrears. Other measures announced, including reductions in mineral oil tax and VAT for petrol and diesel and a pausing of the carbon tax increase until October, may prove costly and there is no guarantee that the benefit will go to the households who need it most. In addition, the pause in carbon tax increases may have an impact on programmes funded by this revenue stream, including residential and community retrofitting programmes, fuel allowance, living alone allowance, ACRES, EV grants and many others.

More than four years of sustained increases in energy prices have had a knock-on effect on energy poverty, energy affordability and energy arrears. One concrete indicator is the number of households in arrears on their energy bills. In February 2026, there were over 316,000 accounts in arrears on electricity and 179,000 in arrears on gas; that is, 14% of all electric and 26% of all gas. Of those accounts, 8% and 21%, respectively, have been in arrears for more than 90 days. The average amount on electric is €492 and on gas is €207. These figures are very concerning and are likely to increase due to the continued impact of rising fuel prices.

Income adequacy and the energy efficiency of a property are key determinants of energy poverty. If a person or household does not have sufficient income to cover energy costs or if the property in which they live has a poor energy rating, then these households are much more likely to be living in energy poverty. Income adequacy and building energy efficiency must be addressed in tandem in order to reduce the number of people and households in energy poverty.

Social Justice Ireland welcomed the publication of the energy poverty action plan. While Government has made some inroads in addressing low-income household energy issues through funding a local authority retrofitting campaign, progress to date has been less than ideal given the scale of the problem and its implications for the health and well-being of many low-income families. A targeted package of measures to support people to move away from fossil fuels for energy, heat and transport must be part of Government strategy to support households with energy affordability.

Our proposals include increasing heat pump usage and retrofit output - this is essential to achieving energy efficient homes. Significant investment is needed to develop a public transport network powered by electricity and renewable energy. Taxation policy, as my colleague, Mr. Gibbons, said, must be aligned with our national climate targets. In 2024, Government spent €2.3 billion on environmental subsidies related to energy and emissions while fossil fuel subsidies were double that, at €4.7 billion. We need to invest in renewable energy generation and storage capacity as this is key to reducing our reliance on fossil fuels.

Social Justice Ireland welcomed the programme for Government commitment to "continue the focus on addressing poverty and social exclusion". We also welcome the Government’s commitment to run progressive budgets. When considering measures to address cost-of-living pressures in budget 2027, Government must deliver investment in social infrastructure, develop a broad and stable tax base and prioritise the protection of vulnerable groups if it is to deliver on its commitment to progressive budgets.

Budget 2026 was the first budget of the current Government. In our analysis of that budget, we assessed the distributive impacts of its policy choices across a wide range of areas. Following the budget, the overall picture is one with a welcome progressive profile. For households with jobs, weekly income will marginally decrease in 2026. Those on low incomes and welfare will have a marginal gain. The budget 2026 outcome contrasts with the choices made over the period from 2020 to 2025. During those years, despite welcome welfare increases, particularly for families with children, it was the highest earners who gained most.

For Social Justice Ireland, adequate levels of social welfare are essential to addressing poverty and energy poverty. We call for the benchmarking of core social welfare rates.

Dr. Tom McDonnell:

I thank the Cathaoirleach, members and staff of the committee for the invitation to appear before it. The war in Iran has grave consequences for the global economy. The damage to energy infrastructure and the ongoing blockade of the Strait of Hormuz mean that fuel shortages are inevitable in parts of the global south. The significant fall in supply will have to be matched by a fall in demand of almost the same amount. This means less economic activity, notwithstanding some modest ability to run down stocks and to improve energy efficiency. The outcome will be recession and potentially even food shortages in some countries. The impact on richer countries such as Ireland will be higher fuel prices as they outbid the poorer countries.

Brent crude is exhibiting sharp swings in price on an almost daily basis but is generally in excess of $100 and was over $110 today. Unfortunately, oil prices are unlikely to have peaked, with significant damage already done to supply capacity. The impact of higher oil and gas prices will be particularly severe in Ireland, given our enormous dependence on these import commodities for transport, agriculture and electricity. Close to 80% of energy use comes from imports, so we are facing a severe term of trade effect and an enormous cash transfer from energy importers to energy exporters, with the Irish economy and households poorer in aggregate. Fiscal supports should therefore be understood as distributional in nature. They are about deciding who in Ireland pays the extra cost rather than avoiding the cost per se. The higher price for imported goods is a de facto drain on the economy and will reduce disposable income available for non-energy products in the short run. We therefore anticipate weaker growth in household spending. At the same time, weaker global demand should reduce exports of non-essentials. The elevated level of uncertainty will also be an impediment to investment.

Overall, while we expect a contained increase in the unemployment rate, a recession should be averted given the economy’s strong underlying fundamentals. Our baseline for domestic growth is close to 2.5%. A €9 billion surplus was projected by the Department of Finance for this year, albeit this was contingent on the ongoing flow of excess corporation tax receipts. Much of this surplus would be wiped out if the economy was to experience a fall in consumption and a significant increase in unemployment.

Nevertheless, we have the fiscal resources to protect the most vulnerable households in budget 2027 and that should be our priority.

The rising oil and gas prices are already feeding into inflation directly through higher petrol, diesel, home heating and electricity costs and indirectly through higher transport-distribution and production costs. These increases, if sustained, will feed into more generalised higher costs across the economy, including, inevitably and understandably, higher wage demands as workers seek to keep up with cost-of-living pressures.

The consumer price index was at 3.7% annually in April, with prices up 0.5% over the previous month. Energy products were up 15.3%. Our view is that inflation will likely peak at over 4% this year and could go significantly higher unless the war and blockade are ended swiftly. The trajectory of oil and gas prices is the key to the inflation dynamics. Sustained higher energy prices would disproportionately hit lower income and rural households as they spend a larger portion of their incomes on energy and transport. Prices will also be elevated in the euro area this year. We anticipate that the European Central Bank will tighten monetary policy with two to three interest rate hikes. This will put further downward growth pressure on euro area economies.

Cost-of-living crises can be challenging to remedy in the short-run, although Ireland’s benign fiscal position and low levels of household and business debt gives us some capacity to ride it out. There are no perfect short-term solutions. Medium-term answers include developing our own renewable energy production and investing in ways to reduce our energy demand but this is not something that can be completed in the short run.

Around 40% of households experienced difficulty during the 2022 cost-of-living crisis. Targeted supports for this cohort should form the basis of budget 2027 to the extent that is feasible. Specifically, we mean targeted increases in the value of direct welfare supports and reforms to transition our welfare system to one based on income-tapered supports. Reducing the cost of using public services should also be considered. This would help poorer households and help dampen inflation.

Universal credits to all households is wasteful but could be made targeted and progressive if they were to be treated as taxable income. Tax cutting in the budget in the form of tax indexation is justifiable but there should be no tax cuts on a net basis as this would be inflationary and would undermine our long-run fiscal stability. Plans to cut capital taxes in budget 2027 are difficult to justify at the best of times and certainly should not take place during a cost-of-living crisis with far graver priorities. At a time of record household wealth, we had 15.1% of the population experiencing enforced deprivation in 2025. We have a divided economy and society.

Finally, we should move to tackle in-work poverty through a higher minimum wage and Government measures to promote collective bargaining. The cost-of-living crisis is fundamentally an inadequacy of income relative to the cost of living and needed expenditure. Our responses should reflect that. I am happy to take questions.

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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Thank you very much. I will now open it up to members to ask questions. A reminder that there are a couple of witnesses online, so if members wish to ask questions, they should direct them to the witness they wish to answer.

Edward Timmins (Wicklow, Fine Gael)
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I thank the witnesses very much for their presentations. There are a couple of points, two of which I disagree with and one I agree with. The package for agriculture was mentioned but the main value of the package was diesel and petrol, which was to benefit the population, including the workers referred to. Equally, would the witnesses not agree that we have one of the most progressive, if not the most progressive, tax systems in the world, which supports the lower paid?

I agree, and I have said it here many times, that we should index tax bands and tax credits. That should be the norm. Otherwise - to use the phrase that was used, which I have used as well - it is effectively a stealth tax every year when that does not happen. Would the witnesses not agree that the vast bulk of the package of €775 million was petrol and diesel that helped everyone?

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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Who is the Deputy directing the question to?

Edward Timmins (Wicklow, Fine Gael)
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ICTU.

Mr. Ger Gibbons:

I thank the Deputy. We acknowledged that there were issues arising from rising fuel prices facing particular sectors of the economy. The issue we had was that the protest and the blockades resulted in a bespoke package for certain sectors of the community. The question we would ask is: if trade union members had done the same, would they have got an equivalent package? That is the issue we had and one of the first things that came to mind for us. Some of those measures are very costly. The question is, and I think it has been raised by some of the other participants here: will they be passed on? Will ordinary people and commuters who will see these benefits? That is a question we would have as well.

In relation to the progressive taxation system, yes it does but it comes at an enormous cost. Dr. Tom McDonnell mentioned raising the minimum wage. One of the issues we have focused on over the past number of years is the European directive on adequate minimum wages. When that was proposed, there was a background document proposed by the European Commission. It estimated that if Ireland had an adequate minimum wage, there would be a saving of approximately 0.25% of GDP. If you turn that into GNI*, that is roughly €800 million that would be saved in social transfers to low-paid workers if the minimum wage was adequate. We do have a progressive taxation system but to get where we are, it costs the State an enormous amount of money to do that through social transfers and other-----

Edward Timmins (Wicklow, Fine Gael)
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I am conscious of my time.

Mr. Ger Gibbons:

Okay, I will leave it at that.

Edward Timmins (Wicklow, Fine Gael)
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We have the second highest minimum wage in Europe after Luxembourg. We know the Nordics have a different system in regard to how people are paid. I get it regularly from small businesses that the minimum wage is at a high level, especially for very young workers, and it puts upward pressure all the way along on people who are on more than the minimum wage. While Mr. Gibbons's argument may be correct, we are actually up there with respect to the minimum wage across Europe.

Mr. Ger Gibbons:

I will come back on that. I think that is purely in nominal terms. If you look at purchasing power parity, we are about the fifth highest. Ireland is a wealthy country; we should be up at the top. The issue, in regard to this European directive I mentioned and the way it considers minimum wages, is: does it provide an adequate income for a full-time worker? There are international benchmarks that are used to assess the adequacy of a minimum wage. The international benchmark is about 60% of the median wage. In the latest data we have seen for 2023, which are from the European Union and the OECD, Ireland comes in at around 48% of adequacy. That is quite low but the point is that if the minimum wage is not adequate, then it falls back on the State to make up the gap.

Edward Timmins (Wicklow, Fine Gael)
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I understand that, and that is a trade-off. I am conscious of my questions because I am limited to seven minutes. This question is for Dr. Tom McDonnell. In regard to what the Government did - the €775 million for, primarily, petrol and diesel for agricultural contractors, hauliers and transport people - how would we he have done thing differently?

Dr. Tom McDonnell:

I thank Deputy Timmins. That is a very good question. It is worth looking at the distributional breakdown of the package as it is. We know that, disproportionately, the diesel cut will tend to benefit higher-income households. The petrol cut is more balanced; if anything, it skews slightly towards lower-income households. The carbon tax is broadly neutral. It is regressive itself but it funds a lot of progressive projects, as was pointed out earlier on.

In regard to what I would have done, if the issue of a cost-of-living crisis is that households are falling into deprivation, poverty or simply do not have the resources, then the suggestion is that the emphasis should be focused on those households, which are genuinely at risk of a cost-of-living pressure. One of the things that could have been done was, rather than doing the electricity credits, as was done last time, you could do something like a universal credit that is taxable. That would have allowed you to have had a progressive subsidy to all households, although the benefits would have disproportionately gone to lower-income households.

The Commission on Taxation and Welfare looked at how to protect households over the longer term and one of our recommendations is that we would start to look at removing all cliff edges from the welfare system but also moving towards a system of income-tapered payments.

If we had such income-tapered payments in place, it would have been trivial to put together a package which would have protected people at the bottom but also done so in a targeted way. I would have gone for something like that. It is not necessarily clear that there is a perfect amount, whether it be €500 million or €1 billion. There is no correct, positive answer to that but if it is a cost-of-living crisis, then it is about protecting people who are likely to fall into deprivation and poverty. That would have been the focus.

I accept that there are obvious business concerns associated with the energy price shock but there is some rationale for providing succour to those businesses. In the medium to longer term, we need to move away from fuel price subsidies towards subsidies that encourage businesses and households to reduce their energy usage.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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Cuirim fáilte roimh na finnéithe chuig an gcoiste. Ar dtús, is mian liom a rá go bhfuil rudaí go dona, go háirithe de bharr go rinne an Rialtas na roghanna míchearta. I have a few different questions I want to ask St. Vincent de Paul regarding its opening statement and the huge cuts in the incomes of disabled people following the budget. It is estimated by the Disability Federation of Ireland to be a cut of €1,264 at a time of a cost-of-living crisis. It is an incredibly significant impact on disabled people's incomes. From their work as an organisation, have the witnesses seen the evidence of how that has affected people, and can they tell us more about that?

Mr. Michael Higgins:

I thank the Deputy for the question. To speak to the experience of members, who are our volunteers around the country, we do not have explicit data on the differentiation between people with disability versus people who are not affected that way. Our analysis tends to focus more on the hardship that broad swathes of the community face and the impact that has on volunteers who are trying to assist them. Anecdotally, it is very clear, as Ms Bayliss presented, that the poverty that has been experienced over the past few years is becoming entrenched with certain groups, and our attempts over the years are a hand-up rather than a hand-out. It is becoming much more difficult to assist people in certain cohorts to get out of poverty because they are moving further and further away. As we sit here right now, I cannot give the Deputy specific data on our engagement with a focus on that cohort.

Ms Louise Bayliss:

I can give slightly more concrete data. Last year, we had 260,000 requests for assistance, which was the highest we had ever had. This year, we are tracking over 6% at the moment, from last year. We are seeing a higher demand from people. People are looking for help earlier. We also see that different cohorts are looking more. The majority of people who are turning to us for help are people living in single-adult households, whether that is a lone parent with children or an older person living alone. We can definitely see that people cannot run a household on one single social welfare payment. The supports that are needed, either through the fuel allowance or the living alone allowance, really need to be targeted and directed to those households that we see looking for help. The majority who are turning to us for help are women and they are single adults living alone. When they turn to us, that is reflected in the survey on income and living conditions, SILC, data and minimum essential standard of living, MESL, research we do. The people who are turning to us are the people who we know are at risk of poverty.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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I have a question for Social Justice Ireland. The ESRI recently did a study showing that the home grants for insulation and so on have largely been taken up by people on higher incomes. The witnesses have called for a redesign of the grant systems to make them more accessible to low-income households. That is very much needed. Will they explain what the grants should look like?

Ms Susanne Rogers:

I will answer the disability question and hand retrofitting to Ms Murphy. There was a conversation about it at the cost-of-disability summit last week. There are two strains. You are trying to cover any of the extra costs that are incurred by somebody having a disability or replacing income that may be lost as a result of not working. There are definitely two different conversations about supporting disabled households. Transport was a big issue that came up frequently last week. Opportunity cost and participation cost were the big things. My colleague, Ms Murphy, will discuss retrofitting. It is more her speciality.

Ms Michelle Murphy:

The first point is that there are still upfront costs associated with the grants, which is a strong barrier to low-income households, particularly those households which are eligible but are not taking up the opportunity. That is very concerning for us. We need to look at the barriers and how we can amend the existing schemes to address those upfront costs and barriers. The second point would be to look at something like introducing a building renovation passport scheme. There is more detail in our submission. The retrofit is taken on a step-by-step basis, so the householder or individual qualifies for the grant but takes on the process on a step-by-step basis. Each time in the process, people get their certificate. It makes it more manageable, particularly for lower-income households, because the retrofit will not be the only additional cost they face. They have many other things to budget for and there may be other pressures on any savings that they may have. This would make it more manageable. A step-by-step process for households would also reduce the waiting lists for the retrofit schemes, which are substantial.

It is also about looking at the broader picture for retrofitting and the impact it can have on the household and on an individual. For example, do they have to move during the renovation or not? What is the impact? They are simple things like getting a home painted, what that means for an individual on a lower income, and how we can look at that from a broader perspective? We have consistently proposed in our budgetary documentation that there should be investment in community energy advisers to identify those households who need this, with the lowest BERs, particularly in rural areas, and to assist them in this process, to make sure that the households who need it most can avail of these grants. Pobal has produced some excellent research showing the lower take-up in more deprived areas and has some recommendations too.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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I have a question for Dr. McDonnell. In his opening statement, he talked about the need in the medium term to develop our own renewable energy production and to invest in ways to reduce our energy demand. He is saying this is medium term and will not be short-term measures. What can be done to accelerate that? We are clearly quite far behind as a country.

Dr. Tom McDonnell:

We are enormously behind. We are not making enough progress with the progress we are making. One current issue with the strategy is that it is too heavily weighted towards middle and higher earners. It is too challenging for lower-income households to make the transition. If we want it to be a genuinely just transition, we need to focus on measures that will include lower-income households. Ms Murphy has already talked about retrofitting. We need to look at much more significant subsidies for lower-priced vehicles for the transport fleet, for example, to enable people to make that transition. We need to rapidly improve the charging infrastructure, which is not in place yet. Most significantly, we need to make the changes to our renewable energy infrastructure, including the grid and production as well. There will have to be a much more significant role for the State in doing that directly. It has been moving very quickly.

One issue will be, as we make those improvements, that it could put up energy costs for households and businesses to pay for those investments. In my view, the State as a society and community should pay directly for those additional investments in the grid, solar, and wind, rather than passing them on to businesses and households. That will help to push down the cost of builds for everyone, which will improve our competitiveness and help to reduce energy poverty. Ultimately, there is a lot that we need to do. We need far more construction workers. We need to bring them in from abroad because we do not have them in the short run. We need to increase that capacity if we have to bring in skills from abroad for project management and other things.

We also need reform of our planning rules, of course. There is a lot to be done but this is not something we need to despair about. It is something that is absolutely solvable and we just need to put the resources into it.

Gerald Nash (Louth, Labour)
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I was struck by something Dr. McDonnell said in his opening remarks, which is something I have said time and again myself. The cost-of-living crisis is principally an income adequacy crisis. Households would not be experiencing and encountering the problems they are in 2026 if this were not the case. We know the data, that 20% of all workers are low paid and there was a 0.5% real wage rise in 2025. We do not have the data for 2026 yet but when we look at the decisions taken in budget 2026, and in the Finance Act that took effect on 1 January, because we do not have indexation of PAYE bands, taxes and credits the real value of wages is eroded even further. This is complicating and exacerbating the problems for working people in terms of their ability to meet the challenges they are experiencing because of the energy price spike. Everybody is united in saying we cannot continue to chase rising energy costs and need to deal with what the fundamental problem is, namely, our excessive reliance on fossil fuel importation. We need to do this for all kinds of reasons, including making decarbonisation a priority. We need to focus on this but we are not doing so at speed or at the scale required.

I will go back to the points made by Dr. McDonnell, and by Mr. Gibbons also, on the way in which the fuel support scheme was designed. I have questioned the Taoiseach on this quite a lot recently. My criticism of the package was that there was nothing in it for PAYE workers, and this is something that is objectively a fact. The Taoiseach pushes back and says it is the case that working people would benefit from a reduction in excise duty at the pump. They would but that is by accident. The point is that this is not progressive.

Some of the data I looked at, and the witnesses might correct me if I am wrong, suggests that certainly from the point of view of diesel the top two deciles would benefit disproportionately from the cut. In nobody's language is this progressive. We do know, and we accept, that in the earlier package the fuel allowance period was extended by one month and that is to be welcomed. There has also been an extension in terms of the cohorts of people who qualify for the fuel package. What are the views of Dr. McDonnell? Is it correct that the top two deciles would disproportionately benefit from at least the diesel element of the excise cut package?

Dr. Tom McDonnell:

I thank Deputy Nash. The ESRI research and the distribution analysis done in the past has shown that diesel usage is disproportionately within the top few deciles. Certainly in cash terms they would benefit the most from the diesel excise part of it. The petrol excise is more mixed and it is more middle-income households who would tend to benefit. The carbon tax cut is complicated by the fact it is regressive as a tax but the proceeds from the carbon tax tend to benefit or be recycled to lower income households. Overall, the three measures on the whole are certainly not progressive and would probably skew towards higher income households. Of course the bespoke business packages will tend to benefit higher wealth households because we know in terms of business and agricultural assets it is the top two deciles and the top wealth decile that tend to have virtually all of these assets in our society, so they tend to benefit more. This is notwithstanding the fact there are potential jobs saved through these measures and they have to be looked at also. The fuel allowance package is progressive broadly speaking, in the sense that lower income households would tend to benefit the most. This is our overall sense of where it all stands. It is a complicated picture but generally not a progressive one.

Gerald Nash (Louth, Labour)
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My views on the decision taken last October on the hospitality VAT cut are well aired and well known. They happen to be views shared by ICTU, the Nevin Institute and others on the basis it is not a progressive use of taxpayers' money. There was no argument for it in October and there is an even slimmer argument for it now. It will go live on 1 July. A political decision was taken to use the space available for tax reductions on this rather than on indexation. The soundings from the Government are that it feels it will be required, and I agree, to do double indexation next year to take account of its failure to do so this year. What would be the cost of this in any given year?

Is it not the case, and certainly Dr. McDonnell and I think Mr. Gibbons also, said it in their contributions, that at a time when the economy is firing on all cylinders and when we need to be mindful of the sensitivities and precariousness of our tax base, that there should not be net tax cuts in the next budget? What would it cost to do double indexation at this point in time? Do the witnesses agree that in order to do this we are required to raise taxation somewhere else, on wealth and capital for example, to try to balance it out and ensure our tax base is not further hollowed out?

Dr. Tom McDonnell:

We have a situation now where the public finances are ostensibly in a reasonable state but we know this is because of half a dozen US multinationals that can change intellectual property assets. We are concerned about tax cuts on a net basis as moving in the wrong direction in terms of sustainability. Also, not in all cases but generally, tax cuts add demand to an economy that is chasing a restricted amount of supply, particularly when it comes to energy potentially, and this tends to push up price. In terms of the full cost of indexation, my colleague Mr. Gibbons has this data to hand and I am happy to let him intervene at this point.

Gerald Nash (Louth, Labour)
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I would like a figure on the cost of indexation, if Mr. Gibbons has it.

Mr. Ger Gibbons:

We do not have an immediate figure for the double indexation but last year the Department of Finance estimated that a 1% indexation would cost €290 million and it would cost €580 million for a 2% indexation. It is a substantial amount of money. To reiterate the point Deputy Nash was making, we are opposed to the decision made last October to move the VAT rate from 13.5% to 9% for the hospitality sector. It is something we have long criticised. To recall, when the 9% VAT rate was introduced in 2011 it was premised on that basis it would create thousands of jobs. Indecon did study in 2017 that estimated that at most it created approximately 9,000 jobs and that was in the early years. The overall cost of the subsidy from 2011 to 2018 was €3.2 billion. It works out at an average cost per job of €350,000. It is a substantial amount of money. It did not go to workers because average pay in the hospitality sector is approximately €25,000.

We looked at this a number of years ago as well. Two thirds of the overall turnover in the sector is taken by approximately 5% of firms with turnover of more than €2 million. We think it is a regressive subsidy. It is not going to go to small coffee shops and cafés around the country. It will go to large chains including large multinational chains.

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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The opening statement was on the fuel protest and the implication that who roared the loudest got subsidised. I was actually on the protest myself. It was not farmers, hauliers or construction workers. It was PAYE workers who were on the pickets as well, over the cost of fuel for them to get to work. All sectors were actually on the fuel protest. I was based in Foynes myself and I was there for five days. I have never seen anything like it. I have seen people on the protest who have never asked for anything in their lives. I have said it before. These are people who would give you the shirt off their back and would not ask you for theirs. They were from all age groups but there was a lot of elderly people on the protest with their children and grandchildren.

I asked at the time for a measure whereby if there was a cap put on the fuel prices, there would have been no moneys given to the haulage sector because it would have been introduced in the cap. What I asked for was a €1.70 cap on diesel alone. By giving €1.70 as a cap, that means you took your taxation, which was the same and actually six or eight weeks beforehand was at €1.70, so the Government took that tax. Once it reached €1.70 you would pay an increase in the cost of fuel but you would not pay tax on it. At today's rates, it is €1.95 at the pump at the moment. If they had done that it would be at €1.82 at the pumps at the moment, which would have benefited everyone. From the point of view of haulage and transport systems, by the time they had the VAT back, it was the same as giving them the €1.92 of a cap. It would have brought them back to €1.56 after VAT. By the time they get their €1,200 per month per vehicle, it would have brought them back to €1.38. It is exactly what €1.70 would have done across the board. Everyone who has a vehicle in this country would have benefited. I am not against EVs or anything like that but I have to deal with what is here today. The average vehicle that is here today on the road, that people can afford, is from between 2010 and 2018. They are fossil fuel vehicles, not electric vehicles.

I am looking at inflation. I am looking at the retrofit, which Ms Murphy was talking about earlier. When the retrofit grants were brought in, they brought in different grants for the different households. I am a building contractor, I was on-site this morning before I came here. I can tell you this morning, on plastic products alone, I have been just told there is a 16% increase affecting sewage pipes, waste pipes or anything to do with oil-based products. Since January we have had a 38% increase in insulation. We are talking about retrofit. All the grants have been eaten up by inflation, all due to fuel costs and the lack of fuel. We do not get our fuel from Iran but because of the world market it is being pulled from other places where we get our fuel. To help everyone, if there was a system put in that there was a cap put on fuel, that would be proactive instead of reactive. Put in something, pay your tax up to a level, the same as you pay income tax at 22% or you pay your 40%. All these caps can be put in place without affecting the purse. We can pay an increased cost. That is what I am trying to see collectively, that affects everyone. Targeting places does not work. When you target something, you are going to leave somebody behind. Why can we not be proactive and put in a system that actually works and can help everyone, even in the short term?

It was said here that people can run a household on a single social welfare payment. People cannot run a household on two people working. That is why we have got to come up with a system. Targeting takes too long and it takes too long to get it out there. We can we not come up with a system whereby one thing will help all and keep down transport costs, which are huge? It would keep down food production costs, approximately 80% of which comes through Dublin Port into this country, which comes down to transport costs. As for our bus services, which we do not have in the likes of rural Ireland, it would help neutralise that as well. What I am looking for is a collective measure that would help everyone even in the short term. We also need to put in something from budget to budget, so that any businesses can forecast for 12 months and we have a system in place that, whatever the caps are, cuts in when we hit this level. It makes them forecast their business for 12 months, which stops fluctuating. It is fluctuation and shortage of supply that drives inflation. Regardless of how much you increase the minimum wage, somebody has to pay for it. It is the consumer pays for it at the end of the day when it comes full circle. You raise it on this side as an employer, it goes on to the person that I work for. It is added on. In hospitality it comes around in a circle as well. Rising wages are not helping. Bringing back inflation and cost helps so they are the targets we need to commit to.

I would like to hear Mr. Gibbons, if he would like to come in and tell us one thing that could help everyone, even in the short term.

Mr. Ger Gibbons:

In relation to your opening remark, a Chathaoirligh, no doubt there were PAYE workers on the protests. As I said at the very beginning, we represent approximately 500,000 workers in the Republic and 200,000 in Northern Ireland. The package that was implemented, however, predominantly benefits certain sectors of the community. Again, just to return to the opening question, if it was members of SIPTU, Unite or any other trade union, does anybody think there would have been the same response made by the Government? I do not think there would.

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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No.

Mr. Ger Gibbons:

That is the point we are making. We said we were keen to engage with the Government on measures that we see as necessary. I would defer to Dr. McDonnell on the question the Cathaoirleach proposed in relation to fuel prices. On his final comment about the implications of the rising minimum wage and rising wages, the European Commission did a very interesting report at the beginning of January. It looked at price increases over the last number of years and cost competitiveness. In relation to Ireland, it concluded that the increase in prices over the last number of years had more to do with profits than with rising wages. That is not to say that there are not certain business communities that are facing challenges. We absolutely recognise that. It is going back to issues like the 9% VAT rate for the hospitality sector. That is not something that we think should be done. We think it is a bad use of----

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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I will make one point before I go to Dr. McDonnell. I am on time. As for a 9% VAT rate on a plate of food that you paid €5 for, that same plate of food now is costing €12. If you looked at the VAT rate on what you were actually giving at the time, you have actually doubled it. Anything you are buying today has doubled in cost. The VAT rate on everything is on an inflatable cost. The VAT intake at 9% is still more than what it was at 13.5% 12 months ago. The cost of building a house today is €200 per square foot and rising while five years ago, it was €120 per square foot. We have an €80 increase in five years. The VAT rate is on an inflatable cost. I do not get anything extra. I buy a glass of water for €1 and I pay my VAT on it. If I pay €2 for the glass of water, if I am paying 23%, I am now paying 46 cent extra for the same glass of water. We get nothing extra but Revenue gets it. I will give Dr. McDonnell one minute because I want to go around the table again.

Dr. Tom McDonnell:

On the proposal on wages, if wages do not increase by more than inflation, or at least by as much as inflation, living standards are falling for the vast bulk of the population because for most households it is the wage that is their income. If that is not adequate or it is falling behind, then we have a problem. In terms of your proposal regarding the price cap, or the cap on the tax above, I think it is a very innovative idea for sure. I suspect what will happen in practice is that some of the benefit would go in terms of actual petrol purveyors charging higher prices anyway, they would gain some of the benefit. Some of the benefit would go to purchasers of petrol and diesel, for sure. Money would be lost to the Exchequer, which is damaging for the public finances. I would not be able say with any kind of certainty what that breakdown would be. It would certainly be interesting to research.

I am sure that-----

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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I am caught for time here, Dr. McDonnell. On this basis, I would not be interfering with the public purse because the public purse would be the exact same as it was ten weeks ago before we had the issue with the Iranian war. I would not be interfering with any taxes or any of the taxes that were taken out of fuel up to ten weeks ago. It is the increased cost we would cap the tax on, which would give people a chance. That would bring it down roughly 13 cent a litre at the moment. We are not interfering with the tax purse from ten weeks ago. It is the same.

There is no problem with the income tax that was taken up to ten weeks ago. It is on the inflated cost at the moment, which allows everyone a bit of a chance and stops the gouging from a lot of the oil companies and different things that are coming in around the country. We will come back to Dr. McDonnell in a few minutes.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Apologies I was not here earlier. I had to speak in the Dáil. I thank all of the witnesses for their submissions and contributions, which I have read. One thing I was just debating with the Taoiseach when it comes to energy costs is the question of deregulation and privatisation of the energy sector. A lot of his narrative is about how we need to develop renewable resources. I absolutely agree with that. I do not know what the witnesses think but I note the fact that even though we have significantly increased the proportion of our energy that is produced by renewable energy, it has not done anything to bring down energy costs or electricity costs. In fact, they have gone up dramatically. There is not currently any evidence that developing our own energy resources actually brings price down. To me, that is because of private ownership. I am interested to hear the witnesses' opinion.

I looked back laughingly at some of the comments people like Eamon Ryan made when the not-for-profit mandate was removed from the ESB. He said competition would bring down prices and benefit the consumer and the exact opposite happened. The deregulation of the EU energy market saw prices jump across Europe but in Ireland, they jumped much more than everywhere else. That, at least, is from the figures I have seen. As part of trying to address the energy price hikes, should we not be saying privatisation and deregulation of the energy market has been a failure and we need to bring the energy sector back into public ownership and reinstate the not-for-profit mandate of the ESB?

Ms Susanne Rogers:

To stick with the Cathaoirleach's own point about how will we do the most good for the most people, it would not necessarily be the fuel in our cars and vehicles. It would be home energy I would really try to target because I have the latest statistics, which are not easy to get on the CRU website. The arrears figures are very difficult to find. The CRU has only recently started to add in the value of the figures. I was questioned about that and I thought it makes a difference whether you are €60 in arrears or €600 in areas. The CRU regulates on behalf of the industry. The consumer is encouraged to shop around. The consumer is expected to understand what is in their smart meter. I have one and I do not know what it is or does. I do not understand how any energy company can have ten or 12 different tariffs and expect me to figure out what the best tariff is for me at any given time. It is very difficult to navigate. We will need to have serious conversations about a post-fossil fuel society and what that will look like. At the moment, a lot of our renewable energy is going to data centres.

Yesterday, I was looking to see when we became electrified as a country because we cannot imagine Ireland without electricity. Ballycroy was the last place to be brought onto the grid, which is close to where my family is from on the west coast. It is the middle of nowhere. We cannot imagine a world without electricity at this particular moment in time but it is about how we manage, produce and create that electricity. We still want the nice things we have. How will we do that? There will have to be a serious conversation about energy sovereignty. You can see the weaponisation of fossil fuels across the world now. You can see the difficulties being placed upon consumers. As was said, we do not get our fuel from Iran but other people get their fuel from Iran and that is causing difficulties in global fuel markets.

We use the word "crisis" a lot. In medical terms, that is death or recovery. Those are the only two options after a crisis. We have been in this for quite some time now. For me, the home energy piece is much important than fuel. I can get the bus. I might have to wait for an hour for a bus but I can get the bus. We are at the stage now where there are people I know the Deputies are dealing with for whom putting on the immersion is a luxury action or having a hot shower is a luxury action. That is not the Ireland of a budget surplus and full employment.

To go back to the point about wages, your wages are only worth what they can get you. To say we are the top ten or top two is irrelevant. If I have the second best wage in Europe but it does not get me anything, that argument can be slightly moot. It really is a case of how far it goes. Social welfare goes nowhere. Anybody who thinks you can get by on €254 a week at the moment has never had to do it. They have never had to do it. For me, it would definitely be a case of really tackling the home energy sector. There are outrageous levels of arrears. I know MABS is doing great work, the Society of St. Vincent de Paul is doing great work along with Protestant Aid, Crosscare and everybody else. If you look at the amount of money sloshing around the system, billions of euro were spent on energy credits only to still have thousands of people in home utility arrears. It is absolutely crazy.

Ms Louise Bayliss:

To go back to what Ms Rogers said about the CRU and trying to get control of the energy figures, it is even more shocking than that because of one of the things we do not have. For a lot of the customers we support - Mr. Higgins will have the detail of how we support them through energy vouchers for pay-as-you-go - they are on pay-as-you-go meters. Their electricity runs out on a Monday or Tuesday and we get emergency calls that they have no electricity in the meter. We have no record of how often that is happening on a weekly basis. We have constantly asked for it from the CRU. It is one thing giving arrears figures and disconnections but we do not have the really crucial figure of how many people are self-disconnecting every Monday because they will not have money until Wednesday. That is a crucial figure and something that the CRU is not providing.

When you talk about crisis, the CRU should be monitoring it. When we look at what the Central Bank did before the big financial crisis, we talk about the lack of regulation from the Central Bank that allowed the financial crisis to happen. We need the CRU to take up that regulatory role a lot more strongly and a lot harsher. This point is very relevant today in that on 21 May, we will all have to put in our lobbying returns and we will have to note any interactions we have with the committee. That is the same with any public bodies, whether it is the fisheries board or whatever board. The one board that does not seem to have to register lobbying is the CRU. We do not know how many suppliers are going in looking for regulation, seeking changes in things or for their voices to be heard. That is not recorded anywhere. That is the type of information we need to start looking at.

Ms Susanne Rogers:

In the last 30 seconds and just to pick up on that Central Bank point, if you look at the consumer protection code, the Central Bank says it is about putting consumers first and doing things in consumers' best interest. The Central Bank will be looking for financial providers to put their consumers' best interests first. It should be exactly the same for the CRU.

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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Deputy Boyd Barrett can have a bit of extra time because I gave it to the rest of the members.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Apologies if I am going over ground that was covered before I came back in but did the witnesses talk about wealth taxes as a way of generating revenue? I have not looked closely at it but Mamdani is claiming he is raising quite a lot of money and doing some big things in New York. I have not looked into the details of it but I suspect the witnesses agree that we have gross inequality in the distribution of wealth in our society and that is borne out every single year with the Central Bank's net household worth figures and how that is distributed. It is heavily concentrated among a very small group. What do the witnesses say to proposals like those of Oxfam, ourselves and others about taxing the multimillionaires as a way of generating tax?

Maybe the witnesses could comment on this as well. I feel there often ends up being a little bit of divide and conquer attitude between the people who are under the poverty welfare thresholds on one side, that is, they desperately need support because they are in poverty and are really struggling.

Then there are people who are just a bit over the threshold, often workers, trade unionists, who-----

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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Deputy Boyd Barrett, may we get an answer to your question? We are running-----

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Yes. Rather than ending up in a sort of either-or, we need to support the majority, whether they are under or over those thresholds. The people who could pay for this but are not really paying for it are the multimillionaires.

Mr. Ger Gibbons:

If I may briefly go back to the previous question, in relation to the energy markets, it is not something I would be fully on top of, to be honest, but it is something on which ICTU is working at European level through the European Trade Union Confederation. Effectively, under the European legislation, electricity prices are determined too often by fossil fuels and gas prices, so despite whatever the cost of renewable energy, this is not reflected in the prices ordinary consumers pay. We are developing proposals at European level to do that.

On the wealth tax, we agree a hundred per cent with the Deputy. We have had a proposal for a wealth tax in our pre-budget submissions for a number of years. I will defer on this to Dr. Tom McDonnell, who has done some work on it.

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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Dr. McDonnell, we are limited on time, so a quick answer, please.

Dr. Tom McDonnell:

Yes, we can absolutely do a wealth tax. NERI, in collaboration with Oxfam, developed a proposal back in January. There are also proposals on the NERI website. I encourage members to look at them. We looked at why wealth taxes have failed in other jurisdictions and developed a wealth tax which we think gets around those issues. Certainly, a 1% wealth tax on the top 1% of households, which are not your average Joe Soaps by any stretch, would generate close to €1 billion annually. That should be considered. I know the Commission on Taxation and Welfare was keen to look at ideas for increasing taxes on capital more generally.

On Deputy Boyd Barrett's point about energy prices, it is important we understand where we are. We have the highest energy prices in Europe. Our energy prices have increased faster than the rate of inflation in Ireland, so there is an issue specific to the energy market. I completely agree with Deputy Boyd Barrett that the changes made in the nineties and noughties have been a failure, frankly. We absolutely need to look at investing significantly more as a State in what is ultimately a natural monopoly to a large extent as a way to bring down those prices by reducing the impact of fossil fuels.

Ms Michelle Murphy:

On the investments in renewable energy not reducing prices, it goes back to a point we have made and Dr. McDonnell has made. If you are relying on private equity and private finance to do that, they need a return within ten to 15 years, which obviously then feeds into the system. The State should be making that investment and looking for a return over a 50-year period. That would address that issue, again looking at the regulation of the market.

On wealth taxes, there is a need to look at capital gains. Proposals within the Commission on Taxation and Welfare would be a good place to start.

To go back to a question the Cathaoirleach asked about two of the key issues we could look at in the budget to address some of these issues, for Social Justice Ireland, the first one is to index the social welfare system to a proportion of average earnings. That is crucial to do that long-term planning you talk about and that budget-to-budget planning. We could then look at the indexation of wages. The second piece there is an income protection system that is tapered against wages so you do not get the cliff-edge fall-off Deputy Boyd Barrett referred to.

The tax credits for vulnerable, low-income households would come at a cost of about €210 million at the moment. Those key things should be part of a budget that looks at addressing income adequacy and where the pressures are within the system.

Barry Heneghan (Dublin Bay North, Independent)
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Gabhaim buíochas le gach duine a bhí ag caint inniu. I have my main reason for being here, but to address what was just said, I agree with Deputy Boyd Barrett that Mamdani is doing amazingly with the wealth tax, which affects the secondary properties of billionaires in New York. We do not have that many in Dublin, but definitely doing something for second or third properties that are not being used could be examined. Mamdani brought in efficiency officers to each department and nearly nulled his budget in the first year, so he has really shown what can be done when people actually get things done. As to what he did recently with the five boroughs, when he brought in reduced-cost groceries, we could definitely look at that, a State-run, reduced-cost grocery retailer that could be brought in to give people low-cost groceries in areas of poverty.

We had the CRU before the climate and energy committee last week, and I agree that it is very difficult to get its data. It is something that should definitely be brought in, and it is very interesting that Ms Rogers said that it does not have to disclose its lobby. That needs to be looked into.

I agree with Mr. Gibbons one hundred per cent on renewable energy. Since August, we have had so much dispatch down and curtailment of our renewables, but the issue relates to the data centres. We have to differentiate between EirGrid and the ESB. We are using gas because data centres like to have a regular supply of electricity, but there is a problem. I was at a solar farm that was turned off at 10.30 the other day because of the grid. We have had a code that can fix the grid for the past nine months and it is not being pushed through. I raised it in the Chamber, and I apologise I was not here. They need to work with EirGrid, industry and regulators to accelerate those required grid upgrades and reduce cost.

That is not the reason I am here. The reason I am here is to talk to the witnesses about a solution I want to get their opinion on. At the moment, if you own a house, you can access solar supports and get bills. I believe that the SEAI grants need to help people on lower incomes as the initial cost is too high. One of the quick fixes they saw in Germany is plug-in solar or balcony solar systems being rolled out quickly. In conjunction with batteries, they can really help people immediately with their bills. Do the witnesses believe Ireland should rapidly bring in safe, regulated plug-in solar systems for apartments? I represent north Dublin. Apartment dwellers could really benefit from these systems. They are cheap. You can buy them in Germany in Lidl or Aldi or you can own your own kit. Let us get it all regulated, get it in conjunction and get it safe for people to immediately see their bills reduced. I want to know if the witnesses have any opinion on plug-in solar.

Ms Susanne Rogers:

I am all in favour of seizing the means of production, but the more self-sufficient you become, the more it removes you out of that. If energy is a common good, it is now a for-profit product. I appreciate that, obviously, there needs to be infrastructure there to bring it from one place to the other. I get all that. As much as I would be fond of the turf fire, we have moved on from that. I have been reading about that and it is really interesting. As the Deputy said, it is as safe as probably buying a two-bar fire or a Superser back in the day or something like that. I refer to anything that allows us to be more self-sufficient as a nation or even as a household in terms of lowering our energy costs. Energy costs are only going up, and that is the thing that really worries me. Energy now is a luxury good. That is unsustainable. The way we are going is unsustainable. I know district heating was supposed to revolutionise-----

Barry Heneghan (Dublin Bay North, Independent)
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Yes, but with the Nordic countries, district heating systems have already been installed, so the initial cost barrier is not there. The Codema data centre in Tallaght is using waste heat utilisation, but unless the district heating system is already there, there is no point, in my opinion.

Germany is allowing renters to install plug-in solar systems safely. Why are Irish tenants being denied the same opportunity? I submitted a parliamentary question about the consultation of 2022, where five semi-State and private companies gave consultation to the Department saying that they deemed them to be unsafe. I have asked for those consultations to be published and I am waiting for them to be published because the Irish people need to know why they are not allowed use these systems. The area I represent in north Dublin, which has a heavy concentration of apartments, needs to know why these are not being rolled out. I welcome that the witnesses welcome the transition to clean energy. It cannot just be for people with a detached home and a large roof. If we are serious about climate action, would the witnesses be supportive of plug-in solar in principle, if it is done safely? I understand there might be old houses or old apartments that we need to check, but in principle, from what they know, would they be supportive of it?

Ms Louise Bayliss:

The point that is always missed around energy, the cost of energy and the SEAI grants is that a big swathe of people are excluded from it when they are renting and using HAP. They have no control because the landlord has the control. We would welcome anything that gives them freedom to reduce the costs, in principle, if it were introduced safely.

If we are looking at the cost of somebody who should be in a local authority house but is not because the State has a dearth of social housing and they are now in the private rental sector using HAP and rent supplement, their at-risk-of-poverty rate is 20.5% before housing and jumps up to 58% after housing costs. They have no control over it. That is the point. They do not have any control over their rent, but anything that would reduce costs has to be welcomed with the right proviso that it is all checked and safe.

Barry Heneghan (Dublin Bay North, Independent)
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Perfect. I am delighted with that. I thank Ms Bayliss.

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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Does anyone else want to come in on that? I will give an extra minute to Mr. Gibbons, if he wants to.

Mr. Ger Gibbons:

To be honest, I do not know that much about them. If they are for sale in Germany, I presume the comply with product safety standards.

Barry Heneghan (Dublin Bay North, Independent)
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Germany had to rebuild its entire energy system and plug system after the war. We still have some of our old sockets, down the country and in Dublin.

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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Out the country.

Barry Heneghan (Dublin Bay North, Independent)
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I am not down the country. In my granny's house, they still have them.Our sockets are slightly different. They are examining the UK socket at present. We have ISO standards and we have to obey them. However, I did a rough calculation of the payback period. With a modest Government grant of approximately €250 per year unit, you would buy the unit for €250. The overall cost is €500. The Government could bulk buy these systems and give an SEAI grant. Also, as Ms Bayliss said, for anyone's tenants who need to move or are in HAP and move, these systems are so portable. You can pick them up yourself. I would love to see a roll-out of electricians installing them. I can give Mr. Gibbons more information on it. I will get my office to.

Mr. Ger Gibbons:

That is fine. Absolutely, it is something that we think should be looked at. There are examples in other European countries. I have friends who live in Brussels. They were all approached by their electricity companies to install free solar panels. There are plenty of examples in other European countries that can be utilised. I will leave it at that.

Mr. Michael Higgins:

I reiterate one of the points we made in our opening statement calling for an emergency energy summit. A lot of the points that are being raised by the Deputies today strike two notes. The first is the absence of a medium- to longer term vision for the country, whether it be regulation, wealth taxes or more solar. We do not have a vision for getting behind that. It would be great to involve civil society, the Departments and all of the different civil groups to help formulate that vision and to feed into it, but in the interim also work at the more immediate challenges that we have. For example, we spent €4.5 million in the last three years on energy vouchers that we have developed. We hand a €50 voucher to people that they can use it wherever they wish. We are trying to scale that up. Obviously, we have limited resources. If we could work with other groups and Government organisations to do that in the short term while a longer term strategy is being developed, there are lots of ideas and mechanisms to help people in disadvantage.

On the last point when the Deputy was talking about solar panels, we have issues with meters, hardship meters, lifestyle meters, access to meters and the education piece on understanding meters. My wife is a conference president in the Society of St. Vincent de Paul. Somebody turns off the gas for the summer. She goes back and talks to them in September. They owe €70 in standing charges because they did not know the standing charges existed. Even basic education of folks in those circumstances is crucial. That would be the case as well with the solar panels. Matching the vision with the short-term tactics is required.

Ms Allison O'Malley Graham:

And innovative thinking.

Barry Heneghan (Dublin Bay North, Independent)
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I welcome what has been said. The CRU was before the climate and energy committee last week. The representatives were talking about those smart meters and definitely there is not enough public awareness on how to operate them. What if there was a scheme? You could be saving €100 or €150 a month based on some of the estimates, if you turn things on at certain times. I agree with Mr. Higgins. We have already paid to have these smart meters installed but people do not know how to regulate them. I would welcome that as well.

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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I agree with the sentiments on a plug-in solar panel, if the infrastructure is there. The biggest elephant in the room is the infrastructure. If you look at the grants available, they allow you put in solar panels on your roof up to 6 kW. Why do they not allow you more? Up to 1990, you needed 12 kW to run house. Since they introduced the heat pumps, you need 16 kW to run a house. The problem they are looking at is that anything that is plug-in can give back charge. If you are not using it and you create a back charge, you can cause a problem further down the line. Infrastructure is key and safety is key. However, there are people who could put up 20 kW on their house and be fully self-sufficient, but they do not want that because ESB Networks and all the rest of them would lose out and the people would still end up paying standard charges.

Another issue I have with certain meters in certain places is they can charge their own tariffs on their own meters which can mean a person, who is on the bread line on a low wage, in the likes of apartments could be charged because of the income. The apartments might be making a profit on their energy costs from the point of view of the meters that are in them so that each individual apartment would have to pay its own tariffs across the board.

We have looked at the low wages, we have looked at the squeezed middle, for example, two people working who cannot afford to keep food on the table, and we have discussed here the wealth tax and different things, but what we need to deal with today ,and I keep going back to is the fossil fuel part of it, is the 2.3 million vehicles we have on the road at present. On a percentage basis, 90% or more are fossil fuel vehicles. If we look at the age group of the vehicles that we have and the trajectory of how do we get people out of the fossil fuel vehicles into the EVs or whatever else we have down the line, it will not happen in our generation, I am afraid, because the infrastructure is not there to support what we need. People may have all the visions in the world of making this happen, and you may make it happen in the likes of Dublin and in the larger cities where you may have the infrastructure to do so and where you have a higher population, but there are 32 counties in Ireland. To bring the whole place together, I believe Dublin is overpopulated because now there are people who grew up here in Dublin, left these shores for whatever reasons, and cannot come home because they cannot afford to come home and there is no place for them to live. On a rail network system around the country, I believe that each county should have equal opportunity for employment for wherever people need to work. If a fast rail network were introduced, that would help.

People would imagine today that Richard O'Donoghue could make it to Dublin and I should be able to use whatever transport networks are there. Where I am living, the nearest train station is 20 minutes one way, which I would have to go into the county of Cork to use, or I go to County Limerick, which will take me 25 to 30 minutes. My issue is that if I wanted to come to Dublin today as a public representative and I come on the train this morning and I come here, there is no return train to get me home if we go into voting tonight or if I am here until late at a committee talking. There is no return train to get me back. If I go to one of the stations, I may not get parking. Then somebody may have to come and collect me. If I get the green bus from O'Connell Street down, I could be dropped within 20 minutes of the other side of my house. The infrastructure is not there to support me as a public representative. If it is not there for me, how could it be there for anyone who wants to work or communicate? If you have children in childcare, after school, etc., and if a child gets sick, you have to have the infrastructure that you can leave now and go collect your child, or if you have a loved one who is elderly or sick, the infrastructure has to be there for you to leave. You cannot pick up somebody who is sick and bring them on public transport, and try and get them home. It is fine if you are living in a city but if you are living outside the city, it does not work.

I go back to what the former Minister, Eamon Ryan, said previously. This is why I looked at the mentality of Eamon Ryan when he spoke, and even Leo Varadkar, when he spoke recently about rural Ireland costing money to keep going. What we need to look at is that the main purse coming into this country is international business, but it is on a wheel. Everyone in this country needs to keep the wheel going, whether it is profitable or not. We need to subsidise different areas to make sure international business can come and we can pay for the bigger stuff, but everyone has to put their shoulder to the wheel regardless of the incomes or profitability within their sectors. We have to make it viable for them to live so the wheel goes round. When I see the mindset of the former Taoiseach, Leo Varadkar, when he made his comments, he was looking at a narrative from a city base where infrastructure is in place. It did not take in Ireland, holistically, including the people all across the country who are on low and minimum wages. There are people suffering. It did not bring in the inclusiveness and this is what I would like to get from this committee.

We had witnesses here last week.

I was fairly hard on them because they came to me with an urban base only. What we have today is urban and rural. I want everything together. Let us find a solution that we can give out something to everyone at the one time. Targeted things do not always work, but if we can find some common denominator that somebody gets something across the line and we can target after that, then we help everyone. It is a collectiveness of everyone together, including Deputy Heneghan and every other person. Everyone is living in a different sector and living a different lifestyle from the point of view of where they live.

From the point of view of the west of Ireland and wind energy, if this country looked at solar farms as we are looking at energy, the way that planning distribution is in this country we cannot build wind turbines here because of the health implications and so on worldwide. We should be going offshore, but that was delayed by governments here that delayed DMAPs for five years. We could have had our own wind energy off the west coast where the highest winds are recorded. That is common sense. When we have people who are looking at how much individual companies are delivering for the purse, that is not how it works. We have to look collectively at everything and put it all into the one purse once we have the wheel going around. This is what I would like to see.

I thank the witnesses because there were a lot of different prospects and views from everyone. However, the one view that everyone has here today is about how we can help. That is encouraging when everyone is asking how we can help. It is not just one narrative that will work; it is all the narratives. Does Deputy Heneghan wish to come in again?

Barry Heneghan (Dublin Bay North, Independent)
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I thank the witnesses very much. I thank the Chair for letting me in. I do not normally speak at this committee. I am from an energy background. It is one of things that I have been focusing on. It is important to state that we have made huge progress on renewables, but the grid infrastructure and the regulatory frameworks are struggling to keep pace with that. The private wires Bill I am on working on is different from the Government's Bill. There should definitely be a proportionate community benefit fund for areas nearby private wires directly proportionate to the savings associated with those wires, as there is for wind farms, solar farms and across the board. Everything we do at this committee and in this House should benefit the Irish people. It is something that I am very adamant about.

To go back to the topic of data centres, I did my thesis on data centres. I understand the huge amount of energy they require. However, the way that we are dealing with them at the moment needs to be changed. The Critical Infrastructure Bill and the private wires Bill in conjunction will change that, but we need to have accountability from our semi-State and State bodies. I will definitely be chasing up some of the things that I have heard today. I thank all the witnesses very much.

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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Do any of the witnesses wish to give a comment before we finish? They have one minute each. I will open the floor if they wish to reflect on something.

Ms Allison O'Malley Graham:

To echo what we have already said, there is a need for a more immediate national conversation on energy and for that to include civil society. I have heard today about the frustration with bringing in the CRU one week and the next week the committee brings in somebody else and there is a lack of talking to each other. There is a lot of opportunity to say that is a comment for someone else. At St. Vincent de Paul, when we find our solutions at the conference level and at the local level, it is when we have everyone in the same room. Particularly with energy, when we are talking about solar PV, smart meters and all the different tariffs, the issue we see with the households we support would be who can buy their way out of that complexity, which households can afford to not understand and just go with whatever tariff works for them, not understand how a smart meter works and to purchase the retrofit without necessarily knowing all the ins and outs of it. It is those who are not in energy poverty.

To develop that educational piece, we need to be having a national conversation between the CRU and the Departments, including the HSE, the Departments for housing, energy and social protection as well as civil society organisations because we have that expertise, particularly those of us who are working with households face to face and are already sitting down looking at energy bills with people.

Ms Susanne Rogers:

From a Social Justice Ireland point of view, that is how we approach all our policy. Is it going to work in Blacksod? Is it going work in Blackrock? That is how we are looking at it. I ask Ms Murphy to come in. She is in Donegal. She will be able to give the committee a good run down on the trains from Donegal.

Ms Michelle Murphy:

I thank the Cathaoirleach. I welcome the remarks about the broader picture thinking and that we need to look at this from a national level. At some point, some areas will always subsidise others. I live in Donegal. We do not have a rail system at all. People in the north west have no access to any kind of rail. It would be in the interest of the common good to invest in that. Depending on what age people are, from children to older people to working age, we all contribute to the common good and we are all beneficiaries at some point. That why I welcome the discussion around looking at the perspective. The Cathaoirleach mentioned the budget, benefiting everyone and looking at the cost of living. How do we have a taxation and social welfare system that works for the benefit of all to improve living standards and the common good and to address current challenges? I welcomed reading the outcomes of the committee in advance of the budget and the recommendations it made around energy. It is key to look at how our taxation and social welfare system, and our investment in our infrastructure system, interact to deliver that common good and improved standard of living and improved way for businesses to survive and thrive.

On dialogue, the Taoiseach mentioned social dialogue recently. It needs to include everyone, including employers, unions, farmers and civil society and environmental groups. We will never do the planning for the future that we need to do if we cannot take into account everyone's perspective. We can make those discussions and decisions around who contributes, who pays and what will bring the longer term benefit to society, so that people will accept that going forward.

Dr. Tom McDonnell:

I completely agree with the Cathaoirleach and Ms Murphy's comments. This kind of divisive narrative about urban versus rural is really unhelpful. It is clear that rural Ireland has been denied the infrastructure it needs for a full century of the State now. It is not possible for rural Ireland to generate the economic output because it does not have the infrastructure in place. It has not been given to it. I also agree that the real solutions for this crisis are too late in coming. In many ways, what we need to do now is to have a short-term package that helps households in budget 2027, but ensure when the next of these crises happens, we are not in the same position as happened back in 2022. We found ourselves not capable in 2026 of coming up with a strategy for how to protect households properly and effectively. We need to make sure that in 2029 or 2030 we are not in the same spot. The Commission on Taxation and Welfare's proposals on income tapered supports on adequacy welfare payments linked to wages. All those things are what are required in terms of deprivation and poverty.

Fundamentally, we need to solve the problem of infrastructure provision in this country. The reason Denmark and Spain have not found themselves in the same spot as Ireland is they have invested in renewable energy infrastructure and the grid in recent years. We have simply failed to do that. The Cathaoirleach's point about offshore wind is well made. We have absolutely failed in that regard. We have the best and most benign environment anywhere in the world for offshore wind and we have simply failed over the past few decades. We need to understand as a society why we have failed and have a much more rigorous and robust attitude to resolving that problem throughout all of society, including the Parliament.

Mr. Ger Gibbons:

I wish to echo the comments that were made. I agree with the Dr. McDonnell's emphasis on infrastructure. The trade union movement represents 500,000 workers. We will find trade union members in every town, village and city in the country. I echo the point on the emphasis that was made on the importance of social dialogue with unions and employers and civil society dialogue with key stakeholders. That is why we welcome this exchange today.

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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I thank all the witnesses for coming in and for an open and frank meeting. It has been very informative and open discussion.

That concludes this session. I thank members and witnesses for attending the meeting today.