Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

I thank the Deputy for raising the issue, which has a number of elements. One is the petrol and diesel excise rates and VAT on hospitality is another. The Government is acutely aware of the impacts of energy price inflation and the broader cost-of-living crisis on households and businesses. Perhaps the Deputy did not get an opportunity to dwell on the work that the Government has done. I would argue the Government has acted decisively to lessen the impacts of inflation.

That includes €12 billion in supports to date to citizens to try to offset the costs of living caused by the energy crisis consequential on the war in Ukraine and the post-Covid period. In budget 2024 alone, it provided for €2.7 billion in once-off cost of living measures, including targeted welfare interventions, electricity account credits or energy credits, reduced VAT on electricity and gas and reduced public transport fares. In 2022, we also provided for temporary reductions in the excise rates of 21% and 16% per litre on petrol and diesel. The good news is that, thanks be to God, fuel prices have fallen considerably from the highs of 2022, when a litre of petrol and diesel cost between €2.10 and €2.20, compared with between €1.69 and €1.77 today, and a barrel of crude oil on global markets costs $84, well below the highs of more than $110 experienced during much of 2022. Consumer inflation has eased from a peak of 9.6% in 2022 to 1.5% in June. All of this is positive news.

With regard to the summer economic statement, we are proposing to put €1.4 billion aside for tax and we are looking at expenditure increases, year on year, of about 6.9%. That is very significant, by any yardstick. We have provided for tax reductions over the last four years of Government. The preference of the three parties in the Government, Fianna Fáil, Fine Gael and the Green Party, is to maintain a focus on the personal taxation front. Wages have increased. If we do not do anything with the personal taxation framework, essentially, we would be taxing people. However, to enable us to keep pace with wages and make sure people are not taxed could cost up to €1.1 billion for that alone. We are being warned, left, right and centre, not to overheat the economy so choices will have to be made, but the preference of the three parties is clearly on the personal taxation front. The cost of a full-scale VAT reduction would be about €750 million on top of the €1.4 billion, or if we were to try to do food alone, it is estimated at about €550 million. These are the choices that the Government will have to make.

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