Ivana Bacik (Dublin Bay South, Labour) | Oireachtas source

I am glad to speak on behalf of the Labour Party in a debate that purports to address twin crises - the climate crisis and the cost-of-living crisis.

I have indeed spoken previously about these twin crises that we are all facing in society. All of us across the House are hearing from constituents, families and individuals about the astronomical increases in the cost of living and the bills that everyone is experiencing, in my constituency of Dublin Bay South and elsewhere too. People are telling me about the increases that they are seeing in the cost of their rent, childcare, fuel bills and groceries. Inflation is at a 20-year high and that this is really hitting hard. We heard today from Barnardos regarding the impact on child poverty that this is also having.

The Labour Party takes the cost-of-living crisis seriously. Just recently, on 26 January, we tabled a motion offering real solutions to address the crisis. The motion called for the transformation of the national minimum wage to a living wage, increases in social welfare payments linked to the rate of inflation, and a windfall levy on excessive profits in the energy, transport, housing and food sectors due to rising prices. Unfortunately, the motion was opposed by the Government and did not pass. Despite the record tax take in 2021, we believe that insufficient action has been taken by the Government both in the latest budget, and indeed in what was recently a mini-budget in all but name. The measures introduced simply did not go far enough to address the very serious cost-of-living crisis being faced by so many in this country.

That is why we cannot support the Government amendment to this motion. However, we in the Labour Party, as with all of those on the left or green-reds, take the climate crisis seriously too. We recognise the urgent need for measures to tackle the climate emergency, reduce our climate emissions and tackle the biodiversity crisis that we also face. That is why we support measures to tackle climate, including measures introduced by this Government such as the establishment of a citizens' assembly on biodiversity, which we debated earlier, together with the climate action plan targets that we have welcomed. We also supported, with some reservations, the Government retrofitting plan. That is why we have also supported the introduction of a carbon tax.

That is also why we disagree with the Sinn Féin position on carbon tax and support the Social Democrats' amendment to the motion. The reality is that Sinn Féin does not take climate seriously. For them, climate can wait, apparently. The party does not see the urgent need to introduce measures to tackle emissions and the party cannot be trusted on climate. We believe that parties that profess to be serious about climate do not oppose carbon taxes just as parties professing to be socialist do not oppose taxes on wealth and property taxes. Green-reds believe that properly targeted carbon taxes can reduce emissions and redistribute wealth in accordance with the principle that the polluter pays.

I was proud to stand earlier with the Not Here, Not Anywhere group of activists campaigning on green issues and to hear their arguments in support of more urgent measures to tackle climate. For them as for us, carbon tax is patently not the only mechanism to tackle the climate emergency. In conjunction with wealth taxes, carbon taxes can deter harmful patterns of behaviour, can ensure that the biggest and wealthiest emitters pay the most and can ensure redistribution of wealth to transfer benefits to those who would otherwise not have the ability to meet the cost of retrofitting and other necessary measures.

Carbon tax is clearly not the only mechanism to tackle the climate emergency, nor is it in any way the only reason for an increase in the cost of living, or even an increase in the cost of fuel. I have spoken already about the increases that we are all aware of in the cost of living, where it is not just fuel and energy. We are talking about increases that people are facing in their rent and childcare costs, and in their food and grocery bills. Carbon tax is not the reason for those increases.

We know that in the fuel increases and energy price increases that we have seen just today, the primary cause for these is Russian aggression in Ukraine. Those are international causes that we accept. We do not say that the Government can or should be blamed for all of the increases in the costs of living or in inflation. Government, however, should act to ensure the more equitable redistribution of wealth and a more equitable and effective introduction of a carbon tax that would include a windfall tax on big emitters and on energy companies that are experiencing supernormal profits during a time of such real hardship for so many people.

In the context of the crisis we are experiencing, there is clearly an urgent need to ensure ring-fencing of carbon tax revenues in order that there is a just transition, and as socialists and social democrats are arguing across Europe, that targeted measures are introduced to address these twin crises for so many.

In budget 2022, we in the Labour Party called for a new, targeted carbon tax credit. Combined with targeted increases in the fuel allowance and social welfare payments this would have addressed the cost of living for those at risk of fuel poverty. Our carbon tax credit for 2022 would have been set at €200, would be refundable and allocated on a household basis. It would be available up to an income limit of €50,000 and to those living in homes with a building energy rating, BER, of less than B2. Over time, the credit would be phased out as homes are retrofitted and renewable energy generation is increased. I have spoken previously about how a very ambitious and targeted retrofitting programme can address both of these crises and I know that there are people across the floor of the House who recognise that.

We in the Labour Party have also called for the introduction of a penalty-free derogation on VAT applied to energy. Our motion on 26 January included that measure. The Government must examine the need to reduce the VAT wedge on energy and fuel bills. This is eminently achievable and is an approach that is being adopted by EU member states led by socialist and social democratic governments. This needs to happen in a time-limited way and we in Labour have done the maths on this. A six-month drop in VAT on fuel and energy would cost approximately €200 million. This will cost less than the €200 energy bill rebate to be given in April but will be more impactful and targeted for those in society who need it most. Again, we recall the record tax take for 2021, with VAT raising €1 billion more than was projected. We must see how best to target that and to return some of that windfall to people who are most experiencing hardship at present.

We support the updating of the strategy to combat energy poverty, as well as the initiative to establish a cross-departmental task-force on energy poverty. It must be genuinely cross-departmental to achieve its targets.

Finally, we believe that the retrofitting programme must be more carefully targeted. In the constructive criticism that we have offered of the national retrofitting scheme, while very much welcoming its introduction, we have expressed concern that it may not make enough of a difference in tackling both cost of living and climate change for many households. It is insufficiently targeted at those households that cannot afford the deep retrofit, that do not have the savings of €25,000 and that cannot afford to borrow the cost. It must, therefore, be reviewed to see how it can be targeted in a better way.

Just as we did during the Covid-19 pandemic, we must trust the science. The mantra when we hear about climate change is based on the fundamental principle that we must be honest about the nature of this crisis. As Extinction Rebellion has said, politicians must tell the truth. We must, therefore, be honest. The carbon tax must form part of our national strategy to incentivise climate friendly behaviour and to fund necessary infrastructure to aid that transition. The polluters must pay but that argument does not exempt us all from this responsibility. We must all recognise, those who are serious about climate, that Ireland continues to be far too reliant on fossil fuels. Wind energy accounts for only 40% of our renewable energy and we need to reach a target of 80% in eight years. We still do not have a national strategy to scale up affordable hydrogen production.

We also know that private equity companies with operations in Ireland are profiteering from the climate crisis by investing in fossil fuels. We need to see much more decisive action on this, on the importation of fracked gas and on so much more. Lending voices to these matters would be far better use of parliamentary time than seeking to convince the constituents and citizens that any sort of moratorium on the carbon tax would solve their problems. I reiterate that carbon tax, properly targeted, can reduce emissions, redistribute wealth and have a place in the package of measures that we need take to tackle the climate crisis. We also need to see very serious actions by Government along the lines that the Labour Party proposed on 26 January to tackle the cost-of-living crisis that is causing such real hardship for so many families and households and I know that all Members are hearing this.

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