Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

There is no question but that inflation has picked up recently all across the world, including in Ireland and the rest of Europe. The annual rate of consumer price inflation was 5.1% in October, the highest since 2003. Among the key factors are the supply chain disruption, issues caused by the impact of Covid on supply chains across the globe, and the consequent imbalance between supply and demand. There are also issues specific to energy on the global market, particularly regarding gas. Therefore, the carbon tax is not the factor responsible for the inflation, and the Deputy should not try to give the impression that it is, which she has been consistently doing. I will come back to that.

I accept fully that prices are increasing. They are increasing predominantly because of external factors, which are global. Every country is experiencing increases. It was discussed at the recent European Council meeting, particularly in respect of energy prices. A broader range of issues determine prices, in particular the supply of gas. What came out of the meeting regarding the energy mix within Europe was the view that we have to drive and expand the provision of renewables even further to achieve sustainability in respect of both price and what is best for our environment. We have to develop very strong interconnection to have more sustainable energy arrangements in the future.

In the budget, we introduced a tax package worth approximately €520 million, which Sinn Féin opposed but which will give workers relief and help them. It will help, but not meet all, the additional costs. It will help workers to deal with the increased cost of living. We also introduced a social welfare package worth approximately €550 million to guard against fuel poverty and specifically target those on low incomes who are most at risk owing to increasing energy costs.

We made a very significant decision to back workers in childcare, working with the unions and other representatives of workers to create a sustainable pathway for all those who work in childcare through a joint labour committee, and also working with employers and employees. The State is providing substantial financial underpinning so that there will be career pathways. The Deputy mentioned a freeze of childcare costs but we want to go further in reducing them. The budget, which was substantial, represents part of a multi-annual approach to transforming childcare, having regard to childcare workers, the development of the child, affordability, access, and sufficiency of provision.

The Deputy referred to a tax credit regarding rent. There is no guarantee at all that it would achieve the outcome she desires. The Minister responsible for housing has brought in measures to restrict rent increases but the inflationary spike has overtaken them. However, he is going to bring in further legislative measure to deal with this. He will bring them before Government shortly. They will result in further controls pertaining to rent increases. The most fundamental ways to deal with rent increases, however, are to increase housing supply, provide more cost-rental accommodation and introduce other affordability measures, which we have provided for legislatively. This is not just happening in the Republic; it is also happening in Northern Ireland, as the Deputy knows well because her party is in power there. Energy bills are going through the roof in Northern Ireland. Gas prices have jumped there by 35%. This is further evidence of what is happening on the island as a whole and in the rest of Europe and the wider world. We will do our best to protect the low-income groups.

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