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

It said the measure proportionately benefited people on lower incomes compared with those on higher incomes. For people with an income of only a few hundred euro a week, the extra €200 meant much more to them than it did to a person on a higher income. Another report noted that measures to reduce taxes and levies on diesel and petrol, which Sinn Féin calls for every day of the week, are the least targeted measures. It is important to say that. Most people will agree we must target our resources where they will have the most effect.

I believe the Opposition accepts that we cannot fully absorb the impact of inflation. It is a global challenge, which, apart from the impact of the Covid pandemic, is due to Putin's war. I will repeat that. Most of the difficulties we are having in regard to fuel supplies and prices are due to Putin's war. If that war were not happening, we might not be in the position we are in today. We cannot skirt over that.

I understand why the Opposition has tabled this motion. It is easy and very popular to say we should always spend more. Those of us in government understand that but we have a greater responsibility to look after the broader picture, not just for this week but for next week, next month and next year. We have shown we are not afraid to act when needed, but we will not act in a reckless manner. Fiscal policy that is poorly designed can backfire. We could end up making inflation worse and chasing inflation. It is not a viable option for the Government to try to respond to every change in inflation on a weekly or monthly basis. We would only end up chasing our tails as we exacerbate the problem we are trying to address.

As the House will be aware, the Government will outline its budgetary strategy in the summer economic statement, which will be published in the coming weeks. It will set out the budgetary stance for next year and how we will return our finances to a stable trajectory. We will target the lowest viable level of borrowing to bring our deficit under control, while still allowing us the flexibility to intervene in a targeted way wherever and whenever that is needed. In an environment in which interest rates are rising, this is the only course of action to take. People are feeling that rise in their mortgage payments and the State feels it as well in respect of servicing public debt. We will continue to reduce the ratio of our public debt to income, which will help with the cost-of-living challenge in a targeted, responsible way. We will reduce the reliance of the public finances on highly volatile corporation tax receipts, which, as mentioned on a regular basis in the House, have made the headline budgetary figures look misleadingly positive. These receipts cannot be guaranteed to continue year after year into the future. We cannot bank on always having them. While the numbers might look very positive right now, there is no guarantee that will be the case next year, when we will still be dealing with cost-of-living issues. Inflation will not disappear in only a few months.

The Ministers for Finance and Public Expenditure and Reform will present budget 2023 to the House in the not too distant future. As we have stated, it will contain measures that will substantially deal with increases in the cost of living and how they affect individuals, workers, families and those who are most vulnerable. Discussions during the budgetary process are the appropriate forum for designating policy interventions that are best suited for the current conditions. Through dialogue with stakeholders, we will introduce a budget that continues to return our public finances to a sustainable level, while also acting responsibly to help those most in need. At the same time, we do not want to fan inflation because that immediately will make everybody's situation worse.

The Government is very conscious of the challenges people are facing. We encounter them on a daily basis on the street and in our clinics. That is why we have brought forward a number of measures to deal with them. We have demonstrated that we will respond in every way we can to mitigate the costs of inflation. We will continue to respond as appropriately and as best we can. I will not go into the details of the various measures we have introduced during the year. Those measures are in place and are indicative of what the Government will do into the future. It has been suggested that we are waiting until the end of the year to take further action. In fact, the measures we introduce will be brought forward in a few months, not at the end of the year. The calls for an emergency budget have not been fully thought through. Budget 2023 will soon be announced and it is through the normal budgetary process that we can most successfully address the cost-of-living challenge without jeopardising the long-term stability of our economy and, at the same time, protect the people in Ireland who are most vulnerable in these difficult financial times.

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