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

I thank the Deputies for putting forward this motion. I understand their motivation in doing so and welcome the opportunity for discussion on the issue of rising food prices. We are concerned with protecting our people from the severe financial and economic consequences of the recent worldwide spike in inflationary pressure. We are all aware that people are finding it harder to make ends meet. All of us in this House, regardless of party affiliation, want to respond as comprehensively as we can. The Government will not oppose the motion, but I wish to make a number of points on its content and on the Government's record in addressing the cost-of-living issues to date.

With the annual rate of increase in the consumer price index, CPI, standing at 8.2% in May, it is clear that the long period of stable prices has, at least temporarily, come to an end. This is an issue that is not limited to Ireland. Indeed, it is a trend that is being seen across most advanced economies in the euro area. Inflation has reached a record 8.1% in those economies and it is of a similar magnitude in the United States. The emergence of inflationary pressures over the course of the past year is largely explained by international factors outside the control of the Government and governments elsewhere. These factors include post-Covid supply chain bottlenecks, increased savings, which people wish to spend now that Covid restrictions are eased, and an increase in wholesale oil and gas prices because of the rapid rebound in global demand. The war in Ukraine has added to these pressures.

The Government did not wait for a further budget cycle to address these challenges. Instead, we acted early, earlier in fact than most other governments. We brought in measures worth €2.4 billion to help this year. We introduced a package of significant measures in February, costing more than €500 million, that were designed to ease the impact of rising costs on households, particularly those on fixed and low incomes. These measures included energy credits, excise and VAT reductions on fuel and energy, the extension of the low VAT rate for tourism and hospitality services, a reduction in the caps on school transport fees for multiple children, maintaining the enhancement of the diesel rebate scheme and reducing public transport fees by 20%.

In addition, we took a number of measures targeted specifically at low-income households. Additional fuel allowance payments were provided in March and May to more than 370,000 households. The fuel allowance is not designed to pay 100% of a household's fuel costs but it is a substantial contribution from the Exchequer, through the carbon taxes we raise, to those 370,000 households, each of which receives more than €1,000 through the scheme. The approach of focusing on lower-income households is important as we know they have less capacity to absorb price increases. That is why we complemented general social welfare and taxation measures in recent budgets with measures specifically designed to help those at risk of poverty. The social welfare package in budget 2022 was the highest in 14 years, with 1.4 million people receiving a €5 increase in weekly payments, and more if they have dependants or are living alone. We also introduced a number of targeted measures designed to support those most vulnerable to poverty and the rising cost of living.

Budget measures combined with the February cost-of-living mitigation have significantly increased the incomes of all social welfare household types. The Economic and Social Research Institute, ESRI, and the Central Bank have indicated these measures have been of particular benefit to the lowest-income households. Fuel allowance recipients, for example, have seen their payment increase by more than 55%. I have already indicated the scale of that figure. The full impact of the measures taken to date has yet to feed through, but the Government will continue to monitor the situation in planning future actions and in preparing for the budget.

I turn now to the proposals in the motion from Sinn Féin. The proposal to establish a discretionary fund suggests we do not have one. In fact, we do. The community welfare service makes discretionary payments every day of the week to help people with additional costs they cannot reasonably be expected to meet. These include urgent need payments to people who would not normally qualify for supplementary welfare allowance, including those in full-time employment. The supplementary welfare allowance scheme is not budget-capped; it is demand-led. While I understand the intent of the proposal, there is no need to establish a separate fund. Instead, it is intended to increase awareness of the existing scheme through more intensive media communications over the coming weeks. I want to make the situation clear for people who might not understand the phrase "demand-led". If more people need the payment, that cost will be met by the Exchequer. There is no cap on the amount that can be paid out through the supplementary welfare allowance scheme. If more people need it or there is a need for higher payments, those payments will be made. There is no cap on the budget for that provision.

The motion asks that walk-in access to the community welfare service be reintroduced. This suggests there is currently no walk-in access. In fact, although telephone-based services were introduced as part of the Covid-19 response and are still in place, a community welfare officer is available in all main Intreo centres around the country, during business hours on each working day, for walk-in services. An officer is also available to attend smaller Intreo centres or branch offices or, indeed, at the person's home in emergency situations. The telephone contact service operates alongside the in-person service. This means citizens no longer have to meet in person with a community welfare officer to make a claim. Indeed, many claims can be taken and decided over the phone. In many of these situations, as Deputies know, the community welfare officer has knowledge of people, their background and situation, and is in a position to make a prompt decision. Even if there is no meeting in person, a decision can be made once the person is spoken to over the telephone.

The proposal to introduce a three-year refundable tax credit for all existing and new tenancies, which it is claimed would put "a month's rent back into renters' pockets", is an old idea and one that would have a significant cost to the Exchequer. The question we must ask is whether it would, in fact, put money in the right hands. A previous rental tax relief was abolished in budget 2011. The view of the independent Commission on Taxation and Welfare was that this relief would increase the cost of private rented accommodation. In effect, the Exchequer was increasing the income of landlords rather than reducing pressure on tenants. That is an essential point and I am surprised this proposal is included in the motion. If the Government introduced such a measure, we would be accused of assisting landlords and developers by providing more funds to that sector. As Deputies know, it would result in putting more income in the hands of landlords.

It would actually result in putting more income in the hands of landlords. There is a real risk that pumping more money into the rental sector in this way will just inflate prices and will not help renters.

The Housing for All strategy sets out a target to deliver 33,000 new units per annum. The application of Exchequer resources to support housing, should, in the first instance, be used to fund this new housing. In the 12 months to the end of March, over 22,000 new homes were completed. This year, the Government's target is 24,600 homes. We recognise that there are ongoing challenges to the delivery of housing but we are confident that this plan can deliver and we are completely focused on its implementation.

The Government acknowledges that fees for early learning and childcare can place a financial strain on families and has already set out a range of actions to address this issue. Significant progress has already been made. More than 100,000 children now avail of two years of preschool education each year under the early childhood care and education, ECCE, programme and the national childcare scheme provides subsidies to more than 80,000 children. Findings from a recent review reveal that people using the scheme have saved money - 38% have saved at least half of their childcare costs- are making greater use of early learning and childcare services, and are working more hours themselves. The Government is committed to continuing to invest in this scheme with spending to increase to at least €1 billion this year.

Ireland has one of the highest rates of minimum wage in the EU, which is good. In addition, the share of workers on or below the minimum wage as a percentage of the total workforce has reduced from over 9% to about 6% in quarter 4 of 2020. Since the establishment of the Low Pay Commission, the national minimum wage has increased by 21%. This compares with an increase in consumer prices of 7% in the six years to December 2021. We acknowledge that prices have increased substantially since then. The Government is supportive of the Low Pay Commission and believes that changes to the minimum rate should be informed by the work of this commission.

Future actions should complement these measures and build on the services already in place, rather than set up parallel or duplicate streams of work. That is not to say that we believe no further measures are necessary. The Government has not been found wanting and will continue to monitor the situation. We will take on board the advice of bodies such as the Low Pay Commission and the suggestions from this House to respond appropriately at the right time, as we have done to date.

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