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

It is only a number of weeks since we lifted restrictions. We are emerging from a pandemic that has dominated this country and the rest of the globe in respect of economics, public health and so forth. The intervention by the Government was imaginative, unprecedented and effective in terms of underpinning jobs and incomes to the best degree possible given the extraordinary situation we faced. That cannot be wished away and forgotten about as if it did not happen.

With regard to the global situation, because the world is opening up there has been an imbalance between supply and demand, as the Deputy well knows. The bounceback of the economies has created supply chain issues, which is adding to inflation. We have the exponential increase in oil and gas prices, which is a factor, and issues with transportation. All of these combined are giving us what some economists in the European Central Bank have called a pandemic cycle of inflation. It remains to be seen how long it will continue for. There are different schools of thought on that.

What I am saying to the Deputy is that wages have increased in the private sector. We have never said that wages cannot increase. The good news so far is that those wages have increased in line with productivity gains within that sector and certain other sectors of the economy. It is good, fine and important that this happens, but we should be aware of what we must not do. Most stakeholders agree with this. In this regard, we had a very good, constructive meeting last week with the social partners in the context of the Labour Employer Economic Forum. We need to navigate our way through this intelligently, the priority being to protect those who are hardest hit by this inflationary cycle. Having regard to people's weekly bills, we need to take measures that can help to cushion the blow of this inflation. That is the Government's agenda.

Deputy Nash may call the electricity payment a gimmick. It is a €200 million provision. Two hundred million euro, on any day, is not a gimmick; it is a serious, substantive allocation, but we have to do more, particularly to help people in need and to have measures to target people in need. Also needed are measures that over the medium term will be sustainable in some instances and in line with medium-term Government policy. That is the approach we are taking to this.

During inflationary cycles in the past, there were many policies that people felt would be impactful against inflation in the short term, but they turned out not to be. We do not want to fall into repeating mistakes, particularly those of the 1970s.

It is a long time ago. It is when we last had a really serious issue in terms of inflationary spiral.

We are going to continue to focus on the minimum wage. We have the second highest minimum wage in the European Union. It is the sixth highest if purchasing power is factored in. As I said, we are going to work with the partners to see how best we can navigate our way through this.

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