Pearse Doherty (Donegal, Sinn Fein)
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1. To ask the Minister for Finance if he will introduce an emergency budget with further targeted measures to support lower and middle-income families in response to the highest level of inflation recorded in 38 years; and if he will make a statement on the matter. [31502/22]

Pearse Doherty (Donegal, Sinn Fein)
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I wish to make a point of order before we begin. I do not lay fault at the feet of the Minister for Finance, but in my 12 years as Opposition spokesperson on finance I have not experienced a situation where the Minister for Finance has not been present. There are times when a Minister has to attend other international duties or events and we in the Opposition have always facilitated the change. I understand that that was requested in this case as well, but the Chief Whip needs to get his act together. The senior Ministers need to be here. That is no reflection on the Minister of State, but he does not have delegated responsibility on some of these issues and it cannot be the norm. I am very disappointed that the Government did not facilitate a swap for the Minister.

That said, the Minister of State, Deputy Fleming, is welcome. The first question relates to the need for an emergency budget to have targeted measures to support low and middle-income families. He will be aware that we are seeing the highest rates of inflation for 38 years and we need Government intervention. The idea of waiting until October and perhaps a social welfare Bill and a finance Bill at some later stage does not cut it with ordinary families and workers who are feeling severe pressure at this point in time. Will the Government bring forward an emergency budget with measures targeted at low and middle-income families?

Seán Fleming (Laois-Offaly, Fianna Fail)
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I acknowledge the remarks the Deputy made about the Minister for Finance. He is chairing a Eurogroup meeting today. I think everybody is aware that he had his mother's funeral on the last day, which was totally unforeseen. Everybody understood that, but I take the point he makes.

The Deputy will be aware that the Government has responded in a timely and forceful manner to limit the impact on households of international commodity price-driven inflation. Interventions designed to address the increase in the cost-of-living issue worth approximately €2.4 billion have been introduced to date, encompassing welfare increases, income tax reductions, VAT and excise reductions, lump-sum payments and other measures.

Many of the drivers of inflation at present are global in nature and Ireland as a whole will be worse off than it would otherwise have been because of these international price changes. I think that applies to every country. The Government cannot prevent this, but what it can do is minimise the fallout for those sectors and individuals least equipped to absorb these international shocks. In this context, the Government is acutely aware of the impacts of rising inflation across household groups and has introduced this range of measures to help alleviate the burden on those worst affected by the price increases. For instance, the tax and welfare changes introduced in budget 2022 and more recent measures to mitigate the increase in the cost of living were strongly progressive, with the gains from measures more keenly felt by those in the lower income groups.

The Deputy will appreciate that while the Government's response has been forceful, the people's and taxpayers' resources are not infinite. Ireland's public debt is among the highest in the world. In fact, Ireland's personal debt is one of the highest in the world as well, so when we combine both, the Irish people are one of the most indebted nations worldwide. Borrowing costs are rising and the European Central Bank is no longer backstopping the issuance of public debt. Furthermore, we must be careful to avoid a scenario in which fiscal policy inadvertently creates second-round effects, leads to an inflationary spiral and threatens the overall sustainability of the public finances. The Government's response continues to be to mitigate the fallout from price increases while recognising that a balanced approach is needed to ensure that we do not make the problem worse. While the various measures that we have introduced were not technically a series of emergency budgets, they were a series of urgent measures to deal with the situation up to now.

Pearse Doherty (Donegal, Sinn Fein)
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That simply does not cut it. The mantra coming from the Government that we are going to do nothing until October's budget at the very earliest is something that it feels it should be proud of. The Government needs to listen to where ordinary people are at. Every single day they are feeling that squeeze. They are seeing it in food prices that have gone up by 5%. They are seeing it in energy costs that have gone up by 57%. The ESRI report today talks about average families looking at up to €40 per week.

The Minister of State referred to insulating or trying to protect those on low and middle incomes, but the reality is that it has not happened. The Minister of State should not just listen to me. If he listens to those on the front line, whether the Society of St. Vincent de Paul, One Family or Social Justice Ireland, they will all tell him that more needs to be done. We recognise that the Government cannot insulate everybody from the inflationary pressures that we are seeing and that are turbo-charged by the war in Ukraine, but it can do more. That is why the Irish Fiscal Advisory Council and the Central Bank says there is space to do more at this point in time. Why is it that the Government refuses to deal with the serious pressing needs of so many households at this point, right here and right now?

Seán Fleming (Laois-Offaly, Fianna Fail)
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I understand that. The inflation situation has been increasing. Aside from the budgetary effects that came in on 1 January, we did introduce measures very quickly and promptly after that in February. Everybody knows that included the €200, including VAT, energy credit to every electricity account holder in the country. Everybody should have received that by now. More importantly, there was a reduction in the public transport fare for people who cannot afford a car to travel to work and who rely on public transport. Then we had the additional €125 fuel allowance increase. That is also for working families in particular, as people with the medical card would have been exempt from the cost of the drug payment scheme, which has reduced from €120 a month to €100 a month and it is now on its way down to €80 a month. That is €40 a month that many households and working families are benefiting from. We announced temporary excise cuts as well. That has now been extended to mid-October, into the budget time. Further measures were announced in April and May, including the VAT on electricity.

Pearse Doherty (Donegal, Sinn Fein)
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I do not know if the Minister of State really believes what he says and that the Government has done enough. Let me put it like this: the Irish Fiscal Advisory Council told the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach that inflation has benefitted the tax revenues of the State. Inflation and growth have given a bonanza of €2 billion, yet since the start of the year what the Government has introduced has given €1 billion back, so there is space. That is what IFAC is telling the Minister. There is space to do more.

The Minister of State mentioned the €200 credit for every household and said that everybody should have got it. It was so poorly designed that we have situations where people living in Wexford, for example, social housing tenants, only received €25 because the credit was split between those who share meters. The Government has not provided the support and protection that is needed. The OECD called the Government out and said it provided limited protection to poorer households, so it is allowing them to wither on the vine. What is needed is an emergency budget, an increase in social welfare rates in response to inflation, an increase in the minimum wage, the introduction of cost-of-living cash payments to lower and middle- income households, the removal of excise on the cost of home heating oil, the slashing of childcare fees, to put a month's rent back into renters' pockets and ban rent increases. That is what is needed. Otherwise, what the Government is doing, in my view, is shameful.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I will take up the last point in particular about putting the rent back in renters' pockets. If the Government had ever suggested anything like that, the Deputy and the party opposite would be the first to say this is a subsidy for landlords. That is exactly what would be said, and that is the way it would work out-----

Pearse Doherty (Donegal, Sinn Fein)
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Not if the Government bans rent increases.

Seán Fleming (Laois-Offaly, Fianna Fail)
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-----and when landlords know, there would be an increase.

In fairness, we can do a lot but we cannot do everything to mitigate it. The measures to date have been well over €2 billion. Recently, our concentration is also on employment and the hospitality sector.

Many places cannot even open on Mondays and Tuesdays, such as restaurants and places serving food. One of the solutions was to reduce VAT to make it more economical for people to go to those places and to get employment back up. The best insulation we have against poverty is people getting back to work. We now have 2.5 million people in the workforce, which is a record high, even higher than it was pre-Covid. For those 2.5 million families, that is the best insulation against poverty.