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

We in government accept that many people and businesses are under pressure. We represent ordinary people too. We are elected by ordinary people and we meet them every day in our day-to-day lives as well. The reality is that the inflation that is being experienced is at a 40-year high and is primarily driven by international factors. I think Deputy McDonald also accepts that. It is exceptional in nature. That is why we have brought in a series of exceptional measures outside of the normal budgetary cycle because we accept that these are not normal times and a normal approach is not justified.

We have to continue to fund a number of the measures which we have already introduced, including the reduction in excise on fuel, petrol and diesel and indeed the reduction in VAT on gas and electricity also.

We will publish the summer economic statement next week and we will also, at that point, have the mid-year Exchequer position. That will help provide clarity on the resources that are available to the Government and to the country in the context of budget 2023. It is quite possibly the case that we as a country may face a prolonged period of high inflation. We believe it will peak in the short number of months ahead but we cannot be certain of that. Monetary policy is changing internationally also and the global economic outlook is deteriorating. We need to use the limited resources we have wisely and we have to time our further interventions to have maximum impact. It is our view that people will most need further help come the autumn and into the winter period. We will need at that time a set of measures that can have an impact quickly. This will, in particular, be targeted at those who most need the help in respect of one-off measures, temporary measures and so on.

In the budget we will also need to see the building on measures we have already taken across a range of areas to address further the day-to-day costs that people are facing be that in childcare, transport, in education and in health. We have made moves and significant investments in a number of those areas.

Of course, there will be need for a significant welfare package as well as providing a reduction in tax by way of ensuring that people do not continue to climb into the higher rate of tax as they receive an income increase.

In addition, we will have to invest in housing, in healthcare, in education and in disability services, and we have just listened to the debate there. We will have to fund the mica scheme, to ensure that we have the resources for the mother and baby homes payments scheme and, of course, the cost of supporting the refugees who are coming to our country after having fled war. There will be many demands on taxpayers’ money and, of course, Deputy McDonald will be calling for more to be done on all of those issues over the months ahead.

The good news is that Ireland is in a relatively strong position going into this period. Unemployment now is less than 5%. We have labour shortages across a whole range of sectors in the economy and we have a broadly balanced budget. We have one of the fastest-growing economies in the European Union and are continuing to win a large share of international investments. We have some capacity but we have that capacity because we have managed the public finances well and the economy has rebounded very significantly.

Next week is an important milestone in the budgetary process. The Minister, Deputy Donohoe, and I will engage with the Oireachtas and will appear before the Committee on Budgetary Oversight to discuss with the Deputy’s colleagues the choices we face as a country.

I am sure that the irony is not lost on Deputy McDonald that if we had followed her approach, had taken her advice to spend €3.5 billion more in the previous budget, had taken this advice to do more every time we made an intervention over the past number of months, that we would not have the headroom and capacity which the Deputy now calls on us to use in order to do more. We have to try to meet all of these competing demands. There will be a significant intervention in the autumn by the Government and it will be focused on the cost of living that people are experiencing.

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