Sinéad Gibney (Dublin Rathdown, Social Democrats)
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64. To ask the Minister for Public Expenditure and Reform if reported plans (details supplied) to cease cost-of-living supports and payments in budget 2026 will be benchmarked against a reduction in the cost of living; and if he will make a statement on the matter. [5420/25]

Sinéad Gibney (Dublin Rathdown, Social Democrats)
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I was deeply concerned and dismayed by reports in the media that the Government is planning to completely axe cost-of-living supports without any indication being offered about this being tied to evidence of a reduction in the cost of living. I am seeking clarity on the matter. Will any cessation of cost-of-living supports and payments in the next budget, as reported, be benchmarked against a reduction in the cost of living?

Jack Chambers (Dublin West, Fianna Fail)
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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 Third, it allowed funding to be provided for specific, temporary purposes that can be withdrawn when no longer needed.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.

Sinéad Gibney (Dublin Rathdown, Social Democrats)
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I thank the Minister for his answer. While he detailed many different economic terms, I am not hearing about the real day-to-day experience of people whose cost-of-living challenges are forcing them to choose between heat and food, to make very difficult decisions and to live with the stress of these kinds of announcements that come from Government with very little regard for their existence. I would love to hear if there are any benchmarks against standard-of-living indicators or a well-being index. Will equality budgeting be properly enforced in budget 2026 in order that these measures will not just be measured against an economic outlook but also against the cost of living that households experience day to day? The Minister talked about electricity credits. In the wake of Storm Éowyn, it seems clear that the Government has become aware of a likely increase in electricity costs. Will that be mitigated by cost-of-living measures?

Jack Chambers (Dublin West, Fianna Fail)
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As stated, we will have a planned approach to this in the context of 2026. In every budget, we publish a distributional analysis. There is a consideration of well-being. A whole range of indices are published by the Departments of Finance and public expenditure. We have committed ourselves to progressive budgeting over the next number of years. We are also committing ourselves to returning to a more standard budgetary process, which is done in parallel with a medium-term fiscal plan, which we have to submit to the European Commission to have that anchor of fiscal discipline. There will be broader discussion on that in advance of the summer period, when we have the summer economic statement and the medium-term fiscal plan. In the decisions we took through the inflationary crisis, there was progressivity at the core, including in the double payments for many specific social welfare payments, like foster carer's allowance, the carer's support grant, the disability allowance, the blind pension, the invalidity pension and the domiciliary care allowance. We are cognisant of the need to target supports. A significant social protection package will be developed within the envelope that is available in budget 2026. Much of that will be to support the families and households to which the Deputy referred.

Sinéad Gibney (Dublin Rathdown, Social Democrats)
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The word "progressive" was used, yet the measures such as electricity credits that we saw in the past few years were not targeted. If that is what the Government believes to be a progressive measure, then it needs to look at it again. We welcome better targeted measures. Those electricity credits, while important, should be better targeted to assist those families who most need them. I would also like clarity, before we finish, on the additional range of payments which might be impacted. It seemed clear from the statement that the cost-of-living supports and payments will not be continued. I would also like to ask about additional payments of child benefit, disability allowance, fuel allowance and tax credits for renters. Are they also on the slate for being cut?

Jack Chambers (Dublin West, Fianna Fail)
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The Deputy is taking a very negative stance on cuts. Thankfully, we are in a position whereby we are running a budgetary surplus. We will be in a position by means of budget 2026, the summer economic statement and the medium-term fiscal plan to provide additional supports, but through a more regular budgetary process. That means an envelope and support when it comes to the social protection budget, for example. The Deputy referred to energy credits. Perhaps the Social Democrats are opposed to electricity credits.

11 o’clock

That is fine and that is their position.

Sinéad Gibney (Dublin Rathdown, Social Democrats)
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No, we support more progressive measures.

Jack Chambers (Dublin West, Fianna Fail)
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The Social Democrats say they are opposed to energy credits, so it is interesting. A lot of the measures we introduced last year were targeted, like the living alone allowance and the qualified child increment lump sum and the working family payment. Some of the progressive measures I introduced with the additional tax credits, for example, were very much targeted at many vulnerable people in our society. That will all be considered in the context of budget 2026. As I have said, progressivity and the distributional analysis will be at the core of how we frame the wider budgetary process. We want to get back to a point where it is done through the normal budget and not through ad hoc changes through the year.