Cian O'Callaghan (Dublin Bay North, Social Democrats) | Oireachtas source

While inflation on many good services has abated compared to what we experienced from 2021 through 2023, it simply would not be correct to say that Ireland's cost-of-living crisis has gone away, as I am sure we all agree. Lower inflation rates do not mean prices are falling; they just mean prices are not rising quite as fast as they were previously. The period of severe inflation between 2021 and 2023 was experienced by a society that did not have much room to manoeuvre in the first place.

Ireland was already a very expensive country in which to live in 2021. Compared with EU averages, it is even more so now. With the exception of Luxembourg, we are now the most expensive country in the European Union with prices of goods and services for households 45% above the EU average in 2023. There are many reasons for this. One of them is the chronic unwillingness on the part of previous Governments to make necessary investments to bring down the cost of living, including for key public services. Whether it is housing, healthcare, transport, childcare or education, people have for far too long been dealing with significant out-of-pocket costs for access to basic services that are free or very heavily subsidised in most other European countries. There have been some welcome initiatives, it is important to recognise, in recent years around public transport and childcare, but notwithstanding those there still remains a very big problem and there needs to be a lot more done in these areas.

Government has less control over things like the price of energy, of course, but there are still things that can be done to ease the burden on hard-pressed families. In our general election manifesto, the Social Democrats pledged to retain the lower 9% VAT rate on energy to provide support to households and businesses in difficult times. To do otherwise would be to place too heavy a burden on families and businesses of all sizes. It would also be unnecessary. The Minister of State will be just as aware, as I am, of the stories over the past three or four years of businesses facing monthly energy bill increases in the thousands or even tens of thousands of euro, the kinds of numbers that can make businesses simply unviable.

It is often the case that the larger the business, the larger the energy bill and therefore the bigger the hit, especially in some areas of manufacturing that are so important to our economy. Of course, they are under huge pressure at the moment, particularly with the impending announcements expected from Donald Trump with regard to tariffs and the severe negative repercussions that will have for some businesses, including some sections in manufacturing. Where it is possible for us to support businesses, help them keep cost increases to a minimum and maintain competitiveness, we must do so.

It is not just the Trump announcement. Hundreds of thousands of SSE Airtricity customers will also see their energy bills rise today. The average electricity bill for households is likely to climb by more than 10% while the average gas bill will rise by 8%. That will cost the average user approximately €300 per year, and more if they are heavy users, for example, a large family or household living in a poorly insulated home.

There are structural problems with our energy system that contribute to our high prices. We are yet to see the scale of investment that we need in renewable energy that would contribute to cheaper and more secure energy. In the meantime, postponing a return to the full rate of VAT on electricity and gas is a proportionate move given the economic circumstances we are in and the high cost of living that workers, family and hard-pressed individuals are in, and indeed businesses. I welcome this move, and the Social Democrats support it.

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