Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I am pleased to have the opportunity to contribute to this discussion on Oxfam's recent global report on inequality levels. The report draws attention to important issues around wealth and income inequality, cost-of-living pressures and how policy in advanced economies can respond to these global challenges. In particular, the report highlights the negative effect the Covid-19 pandemic has had on equality across the world. However, the range of supports the Government put in place in Ireland was extremely effective in stabilising people's incomes and protecting those most at risk.

The Deputies spoke about the energy companies making profits. In Ireland, the main company making a profit is the ESB, which reinvests its profits in Ireland's energy infrastructure. Dividends or profits from that source do not go into any private individual's pocket. The recent Central Statistics Office, CSO, survey on income and living conditions shows that without Covid-19 income supports, the at-risk-of-poverty rate would have been more than 8% higher than it was. Instead, this rate fell by about 1.5% during Covid, down to 11.6%. We all accept that figure is far too high but it would have been 20% without the Covid measures introduced by this Government.

The report also highlights the importance of progressive taxation measures in tackling income inequality. Ireland is a very strong performer in this regard. This discussion is about both global and domestic issues. The Revenue Commissioners estimate that in 2022, the top 1.6% of income earners will pay 28% of total income tax and universal social charge, USC, receipts.

Furthermore, over half of the total income tax and USC receipts will be paid by 8% of taxpayers in Ireland. Indeed, the redistributive power of our tax system has been repeatedly acknowledged by the Economic and Social Research Institute, ESRI, the OECD and the International Monetary Fund, IMF. I note that the Oxfam blog post on the report highlights the increase in wealth in this country in recent years and raises the issue of a wealth tax. Of course, there are already a number of wealth taxes in place in Ireland including capital acquisitions tax, capital gains tax and local property tax. These generate €2.8 billion per annum as it stands. I know that some people in this House object to a property tax. I would have thought parties on the left would generally support a local property tax but quite a few in this House oppose it. It is very important as it contributes a significant portion of that €2.8 billion. With regard to designing a new tax, Central Bank data show that the main driver of increases in wealth in recent quarters was the positive re-evaluation of housing assets. The value of people's houses has generally been increasing from where it was after the financial shock and this has increased the bank of wealth in Ireland. Houses are a key element in the increase in wealth in Ireland.

With regard to the cost-of-living pressures, we are all aware that inflation has peaked across all advanced economies. This is linked to the rebound in global demand, persistent supply disruptions and pandemic-related effects. The war in Ukraine is further exacerbating this situation. The Government is acutely aware of this and of its impact, especially on low-income families. That is where we have concentrated all of our resources and the €2 billion in increases the Government has dealt with since budget day, up to the most recent changes and the various increases to help people with fuel poverty. Without these, the situation in Ireland would have deteriorated far more dramatically. However, the causes of the current price pressures are not within the control of the Irish Government. The Government has to balance an appropriate response to the increased cost of living in Ireland with the unprecedented level of global economic uncertainty and macroeconomic risk. I am satisfied that the Government has been taking reasonable step-by-step measures on this issue. Nobody thinks the Government can eliminate inflation. All the Government can do - and it is taxpayers' money we are using - is to ameliorate the worst effects of this inflation, especially on those who feel it most.

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