Verona Murphy (Wexford, Independent) | Oireachtas source

I thank Sinn Féin for tabling this motion, which allows us to discuss further the rising cost of living and the developments of the week, which now sees the motion calling for many reductions, including that of VAT which I proposed last week.

Many of the earlier price surges were seen as temporary due to supply chain bottlenecks associated with the lockdown. The longer they go on, however, the more "temporary" fuses into "permanent", resulting in the economy moving from underperforming to overheating with no period of stability in the middle. Once inflation becomes embedded into the system, it is very difficult to wring out.

While acknowledging that not all of the current cost of living problems can be blamed entirely on Government, decisions taken by the Government have certainly made the problem worse than it otherwise would have been. It is within the Government's power to reverse some of its detrimental decisions.

Over the past few months, the Government did number of things that are contributing to the problem. The first major thing that is impacting on the cost of living is the lack of supply in the housing market in the context of both properties for purchase and for rent. The Office of the Planning Regulator has been advising councils on planning by trying to enforce planning guidelines that are not prescribed in law. Councillors believe that the advice of the regulator is infallible, which is resulting in many examples of houses not being built, judicial reviews, projects being scrapped and supply being restricted. We all know that when the supply is restricted, the price of the existing units will increase. I have yet to see evidence of the Government addressing this issue. In fact, whenever I raised it previously, I have been met by Ministers trying to stonewall. Addressing the problems in our planning system would ultimately help with the problems relating to the cost of living.

The second example relates to petrol and diesel. Currently, approximately 55% of the price of diesel or petrol comprises Government taxes and charges. Every time the carbon tax has increased, the Government has not only benefited from that increase, it has also benefited from the extra VAT being charged. Likewise, when the wholesale price of petrol or diesel increases, the VAT returns to the Government also increase. There is no entity in Ireland that has caused fuel prices to increase more than the Government. Not only does a rise in the cost of diesel hurt the commuter travelling to work, it also means a major increase in the overheads of many businesses. Anything that needs to be delivered will be more expensive to deliver. Anything that is farmed will be more expensive to produce. Ultimately, the consumer will be met with a double or triple whammy of price increases, all resulting from an increase in the cost of motor fuel. Ending the practice of applying VAT on excise duties would be a start. Perhaps the VAT rate could be reduced as was done in Poland or maybe we could just get rid of the carbon tax. All of these options are within the Government's grasp if the political is there to avail of them.

My third example relates to home heating. Most people within the Pale may not realise it, but a bag of coal today costs €24. For every bag of coal that is purchased, the Government takes €7. Last week, the cost of a bag of coal increased by €4.50 per bag plus VAT. Another increase of €250 will happen on 4 April. Then, an increase of carbon tax on 1 May will apply. All of these are subject to VAT increases, which will make the Government’s tax take €8, while the price of a bag of coal will have doubled in the past seven months. The cost of home heating oil has risen significantly. I am not sure by how much it has increased in recent weeks, but we have all heard the stories of home heating oil prices going up overnight and of companies not being able to guarantee prices even within the few hours before delivery. What has surprised me are most utterances from Members of the House about home heating oil purchases of 1,000 l. Most people or families with whom I speak to are barely able to purchase 300 l at a time. I am greatly worried about the disconnect between those in this House and the people who are trying to purchase 300 l of home heating oil or a bag of coal. Nor does the fuel allowance cover the level of increase, about which we have heard from many people today. We must remember that those who qualify for the fuel allowance are the people who are least able to transition to expensive green alternatives.

We have one of the highest VAT rates in the world. We are charging VAT on other taxes. I do not know how the practice of applying VAT on excise duties was ever allowed to come into play, but it is a scandalous state of affairs that needs to be changed. The Government must acknowledge that it is morally reprehensible at all times, but moreover at this time-----

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