Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I acknowledge that the cost of living is rising very fast. We had a prolonged period across the world of very low inflation. That is now over; we now see inflation at about 5% in Ireland, Britain and other parts of the world. We have not seen that in a very long time. The rising cost of living is causing a real squeeze on family budgets and has resulted in rising costs for business. Most of the factors driving this are outside the control of the Government, at least. They are largely driven by increases in energy costs and international oil and gas prices and disruption to supply chains as a consequence of Covid. It is estimated that inflation will moderate throughout the course of this year, but that does not take away from the fact that the impact of rising prices is having a really severe effect on family budgets and is squeezing many families in this State.

As to what the Government can do, it is multifold. The Deputy mentioned increases in pay. An increase in the minimum wage has just kicked in. There are increases in pay for public servants. Across the private sector, substantial pay increases are now being awarded to workers, and these are necessary to compensate people for inflation. There is the reduction in income tax, which kicks in this month. I will come back to that in a moment on foot of the Deputy's unusual comments in that regard. There are the increases in welfare payments and pensions, which also kick in this month, the 2% cap on rents, the freeze on childcare fees and the €100 grant for energy costs. Are we looking at other things we can do to help? Yes, absolutely.

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