Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank Deputy McNamara for raising this matter. This is an issue that the Minister for Public Expenditure and Reform, Deputy Michael McGrath, and I acknowledged in our budget day contributions. We acknowledged that we have seen, particularly across the summer period, a steady increase in the inflationary and cost-of-living pressures that many are facing. The Government is well aware of the additional challenge and cost that these are adding to families, businesses and workers all over the country. We appreciate that, as we try to put this awful disease behind us and heal the economy and lead it to recovery, for this additional burden of rising costs to be faced by many is an additional and a real challenge that we have to acknowledge and respond to.

At European level and on a global level, there are many catalysts for this change that, as Deputy McNamara acknowledged, are beyond the influence and control of a small open economy like Ireland's and even economies that are far bigger than ours. The biggest countries are having to confront the changes happening in energy markets and the changes that have happened in global supply chains.

The Deputy asked what my colleagues across Europe feel about this and what their judgment is on the matter. As I indicated on budget day, we are seeing inflation levels begin to increase. We said that there is a risk that they will increase further beyond the forecast on budget day. In terms of what we can do about it at an economic level across the eurozone, the President of the European Central Bank has already said that she will take care regarding changes in monetary policy because we are still in a situation where the economic costs of the pandemic are so real that we must nurture many employers back to a position where they are able to provide sustainable employment. That is a key consideration in the choices that employers are making.

That leads into what we can do here in Ireland. What we are doing here is making practical changes, such as the increase in the fuel allowance made by the Minister for Social Protection, Deputy Humphreys, which took effect on 27 September, and also the changes to the income threshold, which will be increased by €20 in January 2022. This is also the reason the Government brought forward a personal tax package. We believe that those on low and middle incomes in particular should receive additional support in coping with the cost of living. Other than the Government, it appears that no one in this House believes that targeted changes in personal tax have a role to play in helping people with the cost of living. Those changes, combined with what we have done on social welfare, are what we are doing to respond to the challenge Deputy McNamara correctly identified.

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