Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The Government is aware of the challenges many households are facing due to increases in the cost of living, in particular those on lower incomes. The recent rise in inflation is a problem faced by almost every advanced economy in the world. We saw a fall in prices in 2020 as a result of the pandemic but, as the global economy recovers, we are faced with new challenges including rising energy prices and supply issues, which have been exacerbated by the terrible war in Ukraine. In this context, the Government has introduced measures focused on temporary supports that can quickly provide assistance to households.

In February, the Government announced a suite of measures with a value of over €500 million, including an uplift in the energy credit to €200 per domestic account, inclusive of VAT. Measures in respect of the fuel allowance, school transport, the drugs payment scheme, public transport and the working family payment were also prioritised. In light of the continued high fuel prices, further expenditure measures were subsequently introduced, with a temporary emergency support measure for licensed hauliers and an additional €100 lump sum payment to fuel allowance recipients to be paid in May.

Taking into account that the estimated cost of €400 million in respect of the energy credit was considerable relative to the original Estimate for the Department of the Environment, Climate and Communications, a Supplementary Estimate for Vote 29, to provide for the additional funding needed for the energy credit, was brought before the Dáil in March. Further Supplementary Estimates may be required later this year to provide for the other measures, to the extent that the related costs cannot be met within the existing allocations.

These expenditure measures, along with the excise duty reduction on petrol, diesel and marked gas oil introduced by the Minister for Finance and now extended until budget day in October 2022, and the VAT reduction from 13.5% to 9% on gas and electricity bills until the end of October, amount to €1 billion in aggregate. These measures provide substantial assistance towards mitigating, although of course not fully offsetting, the impact of rising prices.

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