Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I move:

(1) THAT for the purposes of the tax charged by virtue of section 95 of the Finance Act 1999 (No. 2 of 1999), that Act be amended, with effect as on and from 10 March 2022, by substituting the following for Schedule 2 to that Act (as amended by section 42 of the Finance Act 2021 (No. 45 of 2021)):

		Light Oil: Rates per 1,000 litres						Heavy Oil: Rates per 1,000 litres		Liquefied Petroleum Gas: Rates per 1,000 litres
With effect as on and from:	Petrol	Aviation gasoline	Used as a propellant	Used for air navigation	Used for private pleasure navigation	Kerosene used other than as a propellant	Fuel oil	Other heavy oil	Used as a propellant	Other liquefied petroleum gas	Vehicle gas: Rate per megawatt hour at gross calorific value
10 March 2022	€474.11	€474.11	€413.51	€413.51	€413.51	€84.84	€118.01	€120.55	€118.27	€54.68	€9.36
1 April 2022	€465.98	€465.98	€405.38	€405.38	€405.38	€84.84	€118.01	€120.55	€118.27	€54.68	€9.36
1 May 2022	€465.98	€465.98	€405.38	€405.38	€405.38	€103.83	€141.12	€138.17	€130.52	€66.93	€9.36
12 October 2022	€654.07	€654.07	€555.53	€555.53	€555.53	€103.83	€141.12	€158.50	€130.52	€66.93	€9.36
1 May 2023	€654.07	€654.07	€555.53	€555.53	€555.53	€122.83	€164.23	€178.83	€142.76	€79.17	€9.36
11 October 2023	€671.43	€671.43	€575.61	€575.61	€575.61	€122.83	€164.23	€178.83	€142.76	€79.17	€9.36
1 May 2024	€671.43	€671.43	€575.61	€575.61	€575.61	€141.82	€187.34	€199.17	€155.01	€91.42	€10.13
9 October 2024	€688.78	€688.78	€595.68	€595.68	€595.68	€141.82	€187.34	€199.17	€155.01	€91.42	€10.13
1 May 2025	€688.78	€688.78	€595.68	€595.68	€595.68	€160.81	€210.45	€219.50	€167.25	€103.66	€11.48
8 October 2025	€706.14	€706.14	€615.76	€615.76	€615.76	€160.81	€210.45	€219.50	€167.25	€103.66	€11.48
1 May 2026	€706.14	€706.14	€615.76	€615.76	€615.76	€179.81	€233.57	€239.83	€179.49	€115.90	€12.84
14 October 2026	€723.49	€723.49	€635.83	€635.83	€635.83	€179.81	€233.57	€239.83	€179.49	€115.90	€12.84
1 May 2027	€723.49	€723.49	€635.83	€635.83	€635.83	€198.80	€256.68	€260.16	€191.74	€128.15	€14.20
13 October 2027	€740.85	€740.85	€655.90	€655.90	€655.90	€198.80	€256.68	€260.16	€191.74	€128.15	€14.20
1 May 2028	€740.85	€740.85	€655.90	€655.90	€655.90	€217.80	€279.79	€280.49	€203.98	€140.39	€15.56
11 October 2028	€758.21	€758.21	€675.98	€675.98	€675.98	€217.80	€279.79	€280.49	€203.98	€140.39	€15.56
1 May 2029	€758.21	€758.21	€675.98	€675.98	€675.98	€236.79	€302.90	€300.83	€216.23	€152.64	€16.91
10 October 2029	€773.25	€773.25	€693.38	€693.38	€693.38	€236.79	€302.90	€300.83	€216.23	€152.64	€16.91
1 May 2030	€773.25	€773.25	€693.38	€693.38	€693.38	€253.25	€322.93	€318.45	€226.84	€163.25	€18.09

(2) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

Before I address the substance of the resolution and lay out the rationale for it, I will mention that, as will be the case with many of the speakers this evening, I know that, as important as these issues are and as acutely aware as I am of how much they matter to so many people in our country, we are all very moved by and deeply aware of the horror of what is happening in Ukraine at the moment. I am also aware of the obligations we will have to the many thousands of Ukrainians who will come to our homes here in Ireland and the commitments we will have to them, which I know the Irish people and the Government are determined to discharge.

With regard to the motion itself, I will first address the economic background to it. The opening point I would like to make to the Dáil this evening is to emphasise that we are in the very early days of the economic consequences of a war. The duration of those consequences, their scale and what they will mean for our country and economy is still unclear at this point. However, we know the risks are very significant. While the risks are very different from the risks faced by those in Ukraine, we nonetheless know that from an economic point of view, they are very serious for families, employers and our economy. However, I will again emphasise that we are in the early moments of all of this and we may need to face many other challenges. We will have obligations to meet the humanitarian needs of all those who will come to our country. We may face other challenges in other parts of our economy. The Minister, Deputy McConalogue, has already indicated this evening that he will need to provide further support and interventions to those who work in our agricultural communities to help with the supply of food. As we do our bit to work our way through the consequences of this war, we are still in an early phase. There are very significant economic risks and they need to be recognised. We need to ensure we make decisions that are sensible and can have an impact, but they must also be affordable to our country and we must be capable of sustaining them.

As I look at the need to sustain these measures, I am very conscious that when I talk about issues with regard to our national finances and the need for them to be sustainable, what will be motivating all Deputies in the House this evening as they speak on the resolution is the personal finances of the many people who are now affected by the rising cost of energy and the rising prices we are seeing in our garages and forecourts. I also know what the changes in the cost of energy mean for many people who are in business, particularly those with smaller domestically owned businesses. I acknowledge it is a particular issue for those in our haulage and transport sectors. I also acknowledge that the rising price of energy is of great concern to those in our business community and that, for those pulling up at forecourts and garages, seeing the price of a tank of petrol or diesel going up and up is a cause of great concern. I know it is a cause of much anxiety to many people. I recognise that and want to play my part in making a difference in it.

The Government wants to play its part in alleviating some of the difficulties that many people are facing at the moment but, equally, I want to emphasise to Deputies this evening that the forces that are causing the changes in energy prices these measures are responding to arise from a war. Changes were taking place in our economy and energy markets beforehand but they have been heightened beyond recognition by the consequences of a land war in Europe. That is a development that is beyond the control of this Government. We can play a role in helping our economy to deal with many of the consequences of it, we can help with those costs, we can offer support and we can make a difference but we cannot entirely insulate our economy, our business community and those who are concerned about the price of fuel from the changes that are taking place. It is not possible for this Government or any other government to give a commitment to offset all of the costs that will arise because of the war taking place at the moment. What we can do is make a difference and help. That is what this motion aims to do.

In bringing this financial resolution before the Dáil this evening, I am proposing a 20 cent reduction in the excise rate for petrol and a 15 cent reduction on auto diesel, with a proportionate 2 cent reduction in excise on marked gas oil. The measures I am proposing to the House this evening are inclusive of VAT and will last until 31 August 2022.

For those who are filling up their cars at this time, conscious of what the rising price of fuel could mean for them, for their families and for their living standards, particularly after all that we have gone through with this pandemic, this will offer help of between €9 and €12 on that tank full of petrol or diesel. I know that since these measures were announced changes have taken place in the price of energy. I accept that in the coming period we will see further developments that will have a further difficult impact on many as we see further changes in the price of energy. The measures the Government is introducing aim to offer help. The cost of a tank of fuel will be €9 to €12 less due to the changes we are making in excise duty in this financial resolution.

These reductions aim to get the balance right between trying to give help to many at a time when they really need it, recognising that we will have other challenges within our economy and other obligations that we will need to meet that will also require additional funding, while at the same time allowing the Government to continue to make progress on the issues that mattered to very many before the consequences of the war in Ukraine. We are looking to get the balance right between both those imperatives. At the same time, I need to introduce measures which respect the minimum rates that are allowable under the European Union energy tax directive.

The revenue impact of a six-month decrease in the excise duty on these fuels will have a cost to the Exchequer of €320 million. By budgetary standards this is a very large commitment of the country's money to respond to this challenge. However, it is very important that we do what we can to make a difference by offering this help. This €320 million over the coming months will reduce the cost of a tank of petrol or diesel by €9 to €12 at a time when the Government knows further changes are likely.

I will now speak to the amendments tabled by the Opposition. Amendments have been tabled by Sinn Féin and the Rural Independent Group. Deputy Doherty's amendment seeks a 34 cent reduction in mineral oil tax on petrol and a 25 cent reduction on diesel. The amendment also seeks to remove carbon tax on kerosene until 1 May. The Deputy is also looking for a report on the impact of these measures.

The amendment from the Rural Independent Group seeks a 58 cent reduction in tax on petrol and a 45 cent reduction on diesel. The amendment also seeks to suspend all the carbon tax from tonight and to cut VAT on energy products to 5%.

Many of the measures that have been tabled here this evening are not possible to implement. A reduction in excise duty of 25 cent for diesel, as proposed by Deputy Doherty, would not be consistent with the minimum rate set out in the energy tax directive. The combined effect of the measures I have announced today along with this scheduled 1 cent reduction to offset the biofuel obligation scheme increase and also to recognise the impact of the diesel rebate scheme means that any further excise reduction would bring the effective rate below the minimum permissible rate.

Furthermore, the reductions for petrol and diesel proposed by the Rural Independent Group would bring the rates for both fuels below the minimum rates that are allowable under the energy tax directive. What does this directive do? The directive sets out the minimum levels of taxation that are applicable to these energy products for specific fuel usages. For diesel that is used as a propellant, the minimum rate equates to 33 cent a litre. For petrol it is 35.9 cent per litre. In the change I am making for diesel, I am taking the excise duty that is due on diesel down to the lowest level currently permissible under the energy tax directive.

The Sinn Féin amendment would remove the carbon tax on kerosene until 1 May. The Rural Independent Group amendment would remove the carbon tax on all fuels until the impacts of the energy crisis are fully understood and an economic evaluation is published and laid before the Oireachtas.

The subject of carbon taxation was debated at length in this House in recent weeks. I again make the case, which I accept as a difficult case to make in an environment where we are seeing the cost of energy continue to increase, that carbon taxation has a valuable role to play particularly in an energy environment where we are not seeing prices increase at the speed they are now, in gradually over time changing the decisions that transport users and businesses make with regard to the use of fuels and the types of fuels they use and also at the same time creating the money and resources needed to invest in a lower-carbon future. That is the case I have made to this House in the past with regard to carbon taxation.

Particularly relevant to the debate we are having tonight is to be clear about the impact of the increases in carbon taxation on the changes in fuel prices. For example, this month one year ago the average petrol price was €1.36 per litre. As the House is well aware, in many places that price has gone over €2 per litre over the past 24 hours.

The additional taxation due the increase in carbon taxation is 2 cent. While I acknowledge the increase in the price of energy at the moment is having an effect for many people, the change in carbon taxation is having a small impact on the total price. It is a very small contributor to changes that are under way. It is 2 cent on the price of a litre of petrol of all of the changes that are taking place at the moment. The narrative that has been brought forward by some that the increase in carbon taxation is the main reason for changes in the price of fuel is incorrect. It does a disservice to the role that carbon taxation may yet play in helping us to avoid even greater climate chaos in the future. It is also a small contribution to the total level of change taking place at the moment. I say again that it is 2 cent at a time when we have seen the price of petrol increase beyond the €2 per litre mark.

That said, of course I accept that it is a cause of concern to many in the House at a time when we are seeing so much change happening in the price of fuel. The role of taxation in contributing to that is something that this House will debate. I know some in the Opposition will look to change it. However, this taxation in turn is funding the public services that Members of this House again and again say we need more of and a higher quality of. The tax yield from excise duty on fuel is more than €2 billion per year. That is €2 billion per year that is helping to pay for our nurses, doctors and teachers. It is €2 billion a year that not only makes a contribution to paying for the public services that we need now, but is an invaluable contribution in the context of the challenges that the Irish economy may yet need to confront, challenges which we will overcome and over which we will prevail.

My final point relates to a core theme of the amendments tabled with regard to VAT.

As some in the House will be aware, Ireland has retained its historical application of one of the reduced rates of VAT, 13.5%, to a range of services. They include the supply of fuel, gas, oil and electricity. Under the directive, the rate applicable to such services can be maintained but cannot be reduced below 12%. If it is reduced below that level, even on a temporary basis, we face the prospect of losing the derogation of the reduced rate and having to return to the higher standard rate of 23%. I say that in the context of the various amendments brought forward, which the Dáil will debate.

I wish to go back to the opening points I made in framing the economic context of the resolutions being brought forward. As I said, we are, as a country, in the early days of having to understand the economic consequences of a war that is taking place, accelerating and changing forces that were already under way in the global economy. However, if we are in the early days of understanding what their long-term impact will be, we now know their impact on the lives of those who are experiencing the change in the price of diesel and all other fuels. We may need to deal with many other challenges and consequences as a result of this war. We now have changes taking place in the cost of energy, which we know are having an effect on many at present. I have underscored that throughout my contribution. We know that those changes are a cause of concern and anxiety to employers and those who depend on their cars to commute to work or to go to school. We appreciate the impact that that is having, but the forces behind that change are due to a war that is taking place which, in turn, is affecting the price of energy. We can help with and play a role in alleviating some of that cost. We are doing so by bringing forward measures in this financial resolution that, when the Dáil adopts it this evening, will help with the price of a tank of diesel or petrol by between €9 and €12. Many will want that difference to be greater, but it is a help and will make a difference. We do this in the context of many other challenges to which we may yet need to rise and to which the Government may yet need to fund responses. Just as we cannot insulate ourselves from the humanitarian consequences of what is happening, we cannot suggest this evening that we can insulate ourselves fully from the economic consequences of what is happening.

We understand the challenge. The Government understands the difficulty so many face. We can help with it. We want to help and, through the resolution that has been brought forward, we are aiming to make that difference while also readying ourselves for other consequences and other challenges that may approach and that this country, with, I hope, the support of this Dáil, will yet be able to overcome.

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