Maria Byrne (Fine Gael) | Oireachtas source

I move:

That Seanad Éireann:

acknowledges: - Ireland, and the entire world, is facing a cost-of-living crisis driven by inflation, which is largely being caused by international factors beyond our control;

- the cost of living in Ireland is high by international standards but wages are also amongst the highest in the EU, with median gross hourly earnings one-third above the EU average;

- those on the lowest wages are hit hardest by the rise in the cost of living;

- the squeezed middle is paying a large proportion of income tax but earning too much to qualify for many State supports;

- average full-time workers in Ireland are paying the higher rate of tax, meaning they lose more than half of any pay increase through income tax, USC and PRSI;

- the cost of renting is too high, despite significant interventions through the implementation of Housing for All;

- Ireland is facing a prolonged period of inflation which requires a strategic, not a piecemeal, response from week-to-week;

- the best response from Government is to reduce costs in a structural way – to reduce people’s bills, such as income tax, childcare, college fees, medicines, hospital charges, the GP, public and school transport;

- the Government will never be in a position to compensate people fully for the rise in the cost of living; recalls: - the squeezed middle has benefitted from many universal measures in recent years,

including:

- increases to the standard rate cut-off point and income tax credits,

- free GP care for all children under six years old,

- free GP visit card for the over 70s, regardless of income,

- reduced maximum payment under the drugs payment scheme for anyone without a medical card, now down to €80,

- the introduction and expansion of the new universal childcare subsidy and two free pre-school years,

- the introduction of paternity benefit,

- parents benefit, due to be extended from 5 to 7 weeks in July 2022,

- restoration of the treatment benefit for employees and its extension to the self-employed,

- extension of invalidity benefit and jobseekers benefit to the self-employed and the €1,650 earned income tax credit for the self-employed,

- the help-to-buy incentive, which has helped over 32,000 individuals and couples to buy their first home,

- increases to all third-level student grants of €200 per year, an increase in the qualifying threshold by €1,000, and a reduction in the distance to qualify for the higher grant,

- 20% reduction in public transport fares until the end of 2022;

recognises:

- the Government has already provided €2.4 billion to households and families to help with the cost-of-living crisis, representing more than a typical annual budget package;

- along with the €200 energy credit and a cut to the Public Service Obligation (PSO) levy from October, there is now a comprehensive range of supports available to make it easier and more affordable for homeowners to undertake home energy upgrades, for warmer, healthier and more comfortable homes, with lower energy bills;

- further reductions in income tax took effect in January, resulting in the average two income household paying €830 less in income tax and USC this year;

- that not adjusting the standard rate cut-off point is a tax increase by stealth;

- pension and social welfare increases took effect in January, building on the consistent rises over recent years;

- the minimum wage has increased again this year and ranks sixth highest in Europe when adjusted for purchasing power standards;

- the Tánaiste and Minister for Enterprise, Trade and Employment will shortly publish proposals to introduce a statutory living wage in Ireland; calls for: - a cost-of-living package in Budget 2023, building on the cost-of-living package in Budget 2022, with a specific focus on the squeezed middle, to include:

- further income tax adjustments so that the squeezed middle do not lose most of any pay increase they get in income tax, USC and PRSI,

- pension and welfare increases,

- reductions in the costs that are out of line with those in other EU countries, to include:

(i) increasing universal childcare subsidies for all parents,

(ii) making the recent reductions in public transport permanent,

(iii) lowering the cost of college through reducing the student contribution and increasing eligibility for student grants,

(iv) reducing the cost of healthcare,

(v) increasing cost rental and affordable housing schemes;

- a comprehensive anti-inflation strategy that deals with the issues in the round and tackles the structural issues underlying the high cost of living in Ireland.

I thank the Minister for coming to the House for this motion on the rising cost of living in the names of Fine Gael Senators. Ireland and the entire world is facing a cost-of-living crisis driven by inflation which is largely caused by international factors beyond our control. None of us foresaw the pandemic and now the war which is driving up the cost of everything.

The cost of living in Ireland is high by international standards but wages are also among the highest in the EU with median gross hourly earnings one third above the EU average. Those on the lowest wages are hit hardest by the rise in the cost of living. The squeezed middle is paying a large proportion of income tax but earning too much to qualify for many State supports. Average full-time workers in Ireland are paying the higher rate of tax, meaning they lose more than half of any pay increase through income tax, USC and PRSI. The cost of renting is too high despite significant interventions through the implementation of Housing for All.

Ireland is facing a prolonged period of inflation which requires a strategic, not a piecemeal, response from week to week. The best response from Government is to reduce costs in a structured way and to reduce people’s bills, such as income tax, childcare, college fees, medicines, hospital charges, the GP, public and school transport. The Government will never be in a position to compensate fully for the rise in the cost of living but we recall the squeezed middle has benefited from many universal measures in recent years and we wish to recognise that the Government has already provided €2.4 billion to households and families to help with the cost-of-living crisis, representing more than a typical annual budget package, along with the €200 energy credit and the cut to the public service obligation levy from October. There is now a comprehensive range of supports available to make it easier and more affordable for homeowners to undertake home energy upgrades for warmer, healthier and more comfortable homes with lower energy bills. Further reductions in income tax have taken place. This really is the thrust of what our motion is about. Pension and social welfare increases came into effect in January. However, it is about looking into the future. Our motion calls for a cost-of-living package in budget 2023 building on the cost-of-living package in budget 2022 with a particular focus on the squeezed middle.

I hosted a meeting on childcare in Limerick last week, attended by many families both in attendance and online. One lady I met said that the cost of childcare is like another mortgage. In terms of the cost-of-living package for budget 2023, we need to build on what we did as a Government in budget 2022 but to include further income tax adjustments so that the squeezed middle does not lose most of any pay increase in income tax, USC and PRSI; pension and welfare increases; reductions in the costs that are out of line with those in other EU countries, to include increasing universal childcare subsidies for all parents; and making the recent reductions in public transport permanent.

I spoke to a student from University of Limerick who told me that students rarely came into the city centre in Limerick but now with the reduction in fares for 65 cent and they can go right around the city. Students are now encouraged to come into the city because of that reduction. Consequently they are spending money in the city which they once spent in the areas where they live. In that respect, this needs to be looked at as a permanent reduction.

Lowering the cost of college through reducing the student contribution and increasing eligibility for student grants is something I know the Minister, Deputy Harris, who was here this morning for a Commencement matter in relation to the SUSI grant, is concerned with. Many people do not qualify for the SUSI grant, which is causing much hardship and pressure for families. Some students study part-time because of disabilities and do not qualify for the grant. They are not working because they want to devote their time to their studies which puts more pressure on not only the student but on his or her family.

On reducing the cost of healthcare, much has been done by the Government in terms of the drug payment scheme, which was reduced from €140 to €80 for those not on a medical card. Increasing cost rental and affordable housing schemes are necessary

We need to provide a comprehensive anti-inflation strategy that deals with the issues in the round and tackles the structural issues underlying the high cost of living in Ireland. We need budget 2023 to be introduced to help people deal with the cost of living, especially those on the lowest incomes and the squeezed middle.

As I said, I have spoken with families about the cost of childcare. So many people have gone back into employment. In my region, the mid-west, the unemployment figure is just over 4% which is even lower than it was prior to the pandemic.Due to measures put in place by the Government to support businesses, a lot of people were kept in full-time employment. The measures gave them a salary and alleviated anything to do with expected redundancies or businesses not opening. It has been helpful in terms of supporting businesses. We must support lower-income workers into the future with the rising costs. The Government has done much but the cost at present of filling a tank of petrol, diesel or oil is significant. Inflation is driving increases in the cost of deliveries. Everything is increasing in price and being affected by not only the war but the pandemic which is still with us. So many things happened.

I note the commitment from the Minister's Department in terms of what she did for employers and employees regarding increasing pension benefits and giving employers back their PRSI contributions. There is also free GP care for those aged under six. Those aged over 70 now qualify for a free GP visit card. All of these things have helped families but the squeezed middle needs a bit more support.

Now is the right time to engage in this conversation because there will be a budget in October. There is no point in talking about this in September. We need to start examining these issues now, in terms of the different Departments and how we can build upon the €200 credit given to families to help with energy costs.

Further reductions in income tax took effect in January. Families got €830 into their pockets but they are not seeing that increase because of the higher cost of inflation. We had a discussion on insurance earlier on a Bill introduced by the Minister of State, Deputy Fleming. Those costs are going up. Rising costs are everywhere.

Our motion calls for a cost of living package in budget 2023 to build on a cost of living package in 2022. We would like pension and welfare increases and reductions in costs in line with those in other EU countries to include increased universal childcare subsidies for all parents. We need to make the recent reduction in public transport fares permanent, which I have already mentioned. We need to reduce the cost of college fees and healthcare. The cost of healthcare has become prohibitive. I have met people who have not been able to afford to pay for health insurance. We need to make it accessible because our health is our wealth.

We need to address the provision of cost rental and affordable housing. In my area, we opened 71 co-operative houses recently and another 100 social housing units are coming on stream. Others are being built. As a country, we need to deliver more because we have more people in employment. People are interested in moving to different areas for jobs. We need to deliver housing in budget 2023. We need to help people deal with the cost of living, especially those on lower incomes and the squeezed middle, and to support people into the future.