Jack Chambers (Dublin West, Fianna Fail) | Oireachtas source

The inflationary shock which started in 2022 was the most significant episode of inflation experienced in Ireland since the mid-1980s. Aware of the challenges that inflation posed for households and businesses, Government provided a series of temporary and permanent cost-of-living packages. The purpose of the supports was to ameliorate the exceptionally high energy bills that were a result of market volatility through one-off energy credits and to offer temporary, targeted financial support to households and businesses while permanent income caught up to higher prices. Government adopted a two-pronged fiscal policy to allow a responsive approach to key economic and social challenges. The policy of separating temporary and permanent spending had three main objectives. First, it ensured the adequate provision of supports for external challenges while continuing investment in core public services. Second, it provided transparency on the costs of responding to external challenges. Third, it allowed funding to be provided for specific, temporary purposes that can be withdrawn when no longer needed.

Since 2022, consumer price inflation has fallen significantly and consistently. Headline inflation has been below the target rate of 2% since August last year. The consumer price index and harmonised index of consumer prices reveal a significant stabilisation in consumer prices, with the growth rate down to 1% and 1.4%, respectively, in December 2024. The Government has not announced or committed to any further temporary cost-of-living packages. While the Exchequer finds itself in a favourable position, recent global developments will bring with them a level of uncertainty that will require a planned and strategic approach to investment to ensure our fiscal position remains sustainable. In addition, requirements under EU fiscal rules will necessitate the development of a five-year medium-term expenditure strategy, with no differentiation between permanent and temporary measures.

I assure the Deputy that in the context of budget 2026, the Government will give full consideration to that wider inflationary outlook and if it changes, and the most appropriate mechanisms to target and support household living standards. In line with the standard procedures, these will be matters discussed as part of the annual Estimates process.

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