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

I thank the Deputy for raising this very important issue again today in the House. The Government acknowledges that the cost of living is rising. It is rising very fast at present, faster than it has in 20 or 30 years, and people are feeling the squeeze. Whether it is the shock of looking at your gas bill, whether it is the electricity bill or whether it is the rising cost of filling a tank of diesel or petrol, everyone is feeling it in their pocket and, of course, those on lowest incomes are feeling it more so than those who are not. The Government gets that. We have already taken action, much of which was opposed by Deputy Pearse Doherty's party, and some of which was not.

We acknowledge, though, that the action that we have taken to help families with the cost of living is not enough and for that reason, the three party leaders, when we met on Monday night, commissioned line Ministers to develop proposals for a package of measures that will allow us to help families with the cost of living. That is being worked on at present, with further discussions on it today. I am meeting with the unions and employers this afternoon and there will be a chance to discuss it then. There will be a committee meeting of the economic Cabinet committee which I chair next week which will provide another chance to discuss it as well. We will make a decision on it soon, certainly in the next couple of weeks, because we acknowledge that the cost of living is rising, that it is causing a huge squeeze for many families and that as a Government we have to do something about it. We are aware that other Governments in other parts of the world have taken action too and we believe we must do so as well.

In terms of the context, it is important to bear in mind that when the budget was prepared in September and October last, the estimates for inflation were somewhere between 2% and 3% and we built the budget on that basis. However, that has not been the case. It turns out that inflation has been much higher. It is in and around 5%, and rather than being a temporary phenomenon, while it might moderate, it looks like we may be stuck with high inflation for a longer period than we would have anticipated. When the facts change you need to adjust your policies and that is what we intend to do.

Back as far as last March, I was talking about the possibility of inflation. As far back as last June, I was strongly advocating for a personal tax package, welfare increases and pension increases in the budget, and we achieved that. That was done. Perhaps it was not adequate but it was done. Let us not forget that Deputy Pearse Doherty's party opposed the reductions in personal taxation. I advocated reductions in personal taxation to make sure that people getting a pay increase got to keep it because people earning over €38,000 who get a pay increase lose half of it in income tax. I wanted to make sure that people getting a pay increase - thankfully, most people will get a pay increase this year - got to hold onto it. The Deputy did not want that. I also wanted to make sure that those workers who do not get a pay increase - Deputy Pearse Doherty might not realise this but there some workers who will not get a pay increase this year because their employer will not or cannot provide it - would get something and the Deputy opposed that too.

Sinn Féin needs to be honest about its positions as a party. It might be the case that the Deputy objects to increases in carbon tax because of climate scepticism etc. but he also objects to reductions in personal taxation. The truth is, when it comes to after-tax income, significant numbers of middle-income people in the State would be worse off if Sinn Féin's budget had been introduced rather than ours. That is a fact. We acknowledge that things have changed since then, the cost of living has increased by more than anticipated and we need to act on that. We are working on those proposals now.

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