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

I thank the Deputy for raising what is a very important issue. Since this Government came into office in the midst of a global pandemic, a one-in-100-year event, the Government has intervened to an extraordinary degree to underpin incomes and support lower income workers, to keep people in jobs and to support enterprises. That has been an effective and successful intervention in underpinning our economic activity. There is no question about that. We supported workers from the get-go of the formation of this Government.

This time last year, a barrel of oil on the international markets traded at $61; today it is at $91 a barrel. That was not caused by carbon tax. It is a global phenomenon. Let us not try to misrepresent the issue for the public out there who are watching. The cost of a litre of petrol has risen by 28% over the same period. Gas prices on international markets have nearly quadrupled over the past year. The average annual gas bill has risen by €700. The vast majority of that has very little to do with carbon tax. That has to be said.

On proposals to reduce VAT, we have been over this before. I know the Czech Republic example has been cited by the Deputy in the past. Before the Czech general election, which was just before Christmas, the Czech Government reduced it to zero. There is a new Government in the Czech Republic now and it has gone back up to its standard rate of 21%. Ireland already has a derogation on our VAT rate. If we were to do a temporary reduction, we would lose the derogation and could end up back at 23%, a much higher cost of VAT, which we do not want to do, obviously. We want to keep it at the current rate of 13.5%. That has all been explained.

The United Kingdom and the US are looking at multi-decade highs in terms of inflation. The euro area inflation rate is now at 5.1%, an all-time high. The US rate is even higher again. We understand that people are under significant pressure arising out of this inflationary cycle. As a result of that, in the budget we allocated well over €1 billion to a number of measures to increase disposable income for the people, both in terms of tax income relief of about €525 million and also significant proposals around social protection in terms of the fuel allowance. For example, since coming into office the Government has raised fuel allowance from €630 to €914. Coupled with the €113.50 electricity payment, Government supports for those on low incomes have increased by 63% to €1,027. We are going to do more on that front.

The challenge for us is that we cannot chase inflation. From a macroeconomic point of view, that has been tried in previous decades and it did not work. We have got to cushion the blow of this inflationary cycle for those most in hardship and those most at risk. We have got to target the measures the Government is currently examining to do just that. That is what we intend to do and to alleviate people more generally in terms of these pressures.

The Government has a number of measures under consideration to help people over and above what we have done already in terms of the budget. That will be the basis for our actions later this week. Aontaím go bhfuil brú faoi leith ar dhaoine faoi láthair. Níl aon amhras faoi sin. Tá pacáiste le teacht ón Rialtas chun cabhair agus tacaíocht a thabhairt do chosmhuintir na tíre seo.

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