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

Again, people at different times can distort what gets said. I warned against a wage-price inflationary cycle, but not against wage increases, which have occurred in the Irish economy and that have been linked with productivity and other factors. The latest data from the Central Statistics Office, CSO, show that average hourly earnings rose 3.8% in the third quarter of 2021, from a year earlier, and were up 7.6% from their pre-pandemic levels in the third quarter of 2019. We could go through the annual average wage inflation over that period as well, but that is not relevant now. It may be academically, but the reality now is that prices are increasing significantly because of the global energy crisis and supply chain issues arising out of the impact of Covid-19. I was simply pointing out yesterday that the global situation has to be taken on board. It is not the Irish Government that has cut anyone’s wage or income.

The Governor of the Central Bank of Ireland is clear that the wage increases so far are linked to increases in productivity, which is a good thing for the economy. If we were to have wage increases greater than the increases in productivity, that could lead to businesses having to increase prices and so on, and that is in no one’s interest. What I said yesterday is that we must work intelligently through this. That is why the Government worked in the budget on tax relief and on specific, targeted social welfare measures that would help low-income families in particular. In addition to those social protection measures, however, we also took other decisions concerning the cost of living that would impact families in particular.

Reducing paediatric hospital charges, increasing eligibility for families to access GPs for six- and seven-year-olds, and reducing the drugs payment scheme threshold are very targeted measures that make a real difference to families in certain circumstances. It is the better, more intelligent approach to deal with the unprecedented inflationary cycle that we are currently experiencing. The Central Bank believes that it will peak in 2022 and that we should hopefully be out of it by 2023.

The Government has also taken measures in respect of the cost of energy through the rebate, which is a €200 million cost. The Minister, Deputy Eamon Ryan has introduced that. The Government has approved the legislation which will reduce electricity bills by €113. We acknowledge that these measures just contribute to easing the burden of inflation on many families. We will continue to work across the different areas to see if we can reduce that impact. We would also like to engage with the social partners and others in terms of adopting an intelligent way to deal with this inflationary cycle that retains the best of what the economy has going for it right now. The economy is producing jobs, which ultimately are the best protection against low incomes and so on.

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