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

I thank the Deputy for raising the issue. He has articulated the real-world experience of many people at this point in time. Not everyone but, certainly, a share of the population is very much feeling the effects of what is a 40-year high level of inflation. The Deputy has acknowledged, to be fair, that the Government has made a range of interventions in different areas to address cost of living. We have had some universal measures, including the electricity credit, the reduction in transport costs and, most recently, the elimination of hospital charges for children under the age of 16, but we have also had a number of targeted measures, in particular with the fuel allowance through the two bullet payments, for example, and the increase in the rate of fuel allowance that took effect on budget night last year. Doing it that way was an exceptional measure.

We have reduced the drugs payment scheme threshold to €80 per month and put caps on school transport fees. We have cut the annual public service obligation, PSO, levy. We have launched a major national retrofitting scheme and we have already touched on the reduction in VAT on gas and electricity and in excise on fuel. It is important that it always pays to work. The overwhelming majority, who are able to, want to work. The evidence is that they are working. We have an unemployment rate below 5% and we have now exceeded the pre-pandemic level of employment in Ireland. It is more than 2.5 million people, which is approximately 150,000 more than were employed pre-Covid. That is a remarkable turnaround and is testament to the resilience of the Irish people and indeed, the Irish economy.

That is why it is important that, as well as addressing cost-of-living measures through expenditure, we have a tax package in the budget. We have a programme for Government commitment that we will honour because we do not want a situation in which the constituent that the Deputy highlighted ends up getting a pay rise or does some overtime and pays half of that in tax because he has crept into the marginal rate of income tax. A static tax system at a time of rising incomes is equivalent to an increase in tax. It seems to be only on this side of the House that there is support for a reduction in income tax for people who are earning quite modest levels of incomes - in the mid-€30,000s.

I have acknowledged we will make an intervention in the autumn in the normal annual budget, but we will also be focused on a set of measures that can kick in as quickly as possible and will be temporary and one-off in nature. The advice that we have received from all the main bodies is to target resources, insofar as we can, to those who need them most. Work is actively under way on preparing that. We will have the summer economic statement next week, which will clarify exactly the envelope of money we have for next year's budget.

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