Wednesday, 15 June 2022
Cost of Living: Motion
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,
- 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;
- 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,- 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.
(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;
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.
I second the motion and welcome the Minister, Deputy Humphreys, to the Chamber. I thank my colleague, Senator Maria Byrne, for setting out the motion.
The scourge of inflation is hurting everybody in this country. The rise in the cost of living caused by inflation is hurting families, single people, students, adults and every sector of society. Inflation is, in the main, outside of our control. The illegal invasion of Ukraine has set the world upside down, in particular the continent of Europe. We have seen that across a range of areas, including energy security and concerns about energy supplies.
We know the importance of money in people's pockets. Families who this time last year had certain pressures have now reached a different level. The Government has responded and, to be fair, that is set out in the motion. The Government has responded in budgetary and supplementary packages and in addressing issues with the duty on fuel. When the Minister, Deputy Donohoe, was before the House I asked that these things be kept under review. They have to be kept under continuous review by the Government.
We need to re-examine duties on fuel because that is having an impact on everybody across the country who drives a car, in particular those in rural and regional Ireland where choices are limited and people have to use cars to go to work, school or drop off children. There are significant costs associated with this. As I said, the Government has responded, but need to consider the whole area of fuel.
The squeezed middle comprises real people. It is not a cliché; real people up and down this country are earning good money on paper but have mortgages or rent to pay and childcare costs, and inflation is using into whatever reserves or savings they might have and their budget planning is being affected.
The Government has assisted the squeezed middle for a number of years, including increases to the cut-off to the standard rate of income tax credits, free GP care for all children aged under six, free GP visit cards for those aged over 70, regardless of income, a reduced maximum payment under the drugs payment scheme, the introduction of paternity benefit and the extension of parents' benefit from five to seven weeks in July. These are all very positive measures that have assisted people.
One important area we have focused on over a number of budgets is adjusting the standard rate cut-off point for the higher rate of tax. Some parties and individuals seem to have an aversion to what they perceive to be tax cuts and think they are bad. Tax cuts are important. Adjusting the standard rate of tax is very important, because if we did not adjust the level at which people start paying the higher rate of tax, then everyone would end up on a higher rate of tax. Fine Gael and the Government have looked at this over the past number of years. It is important that the Cabinet and Government continue that in the forthcoming budget.
We want a cost of living package in budget 2023 to build on what we have done in 2022. We want further income tax adjustments in order that the squeezed middle do not lose out. Most pay increases they are getting are going on income tax, USC and PRSI. We want pension and welfare payment increases. We want to examine the areas where costs are out of line with other European countries, including increasing universal childcare subsidies for all parents.
The reduction in fares on public transport was an excellent start and it is something we should focus on, in terms of eventually moving to having free public transport. Lowering the cost of college through reducing the student contribution and increasing eligibility for student grants, reducing the cost of healthcare and increasing the number of cost rental and affordable housing schemes are all measures that will assist the squeezed middle in our country, that is, the people who get up early in the morning, go to work, pay their taxes and do not get the same benefits as everyone else. That is important.
Senator Flynn will have a chance to contribute to the debate. It is important that people who work hard, pay their taxes and do not benefit from the benefits other receive are looked after as well. We will continue to adjust the tax threshold to ensure that people will pay the higher rate of tax at a higher rate of income. If we do not do that, everyone will end up paying a higher rate of tax.The Government has done a lot and I know the Minister is doing a lot within her Department. We need to continue the focus on ensuring that all sectors of society benefit because they need help. They need assistance. As I stated, inflation is largely outside our control due to the war in Ukraine and the impact it is having. The Government has responded. It needs to continue to respond to look after all sectors of society. As I stated, the budget package in 2022 was important. There is a need to continue that and to continuously monitor the impact of the cost of living on society.
I thank the Fine Gael Senators for tabling this Private Members' motion. I am responding to the motion on behalf of the Minister for Finance, Deputy Donohoe, and the Government. The Government supports the motion on the basis that we agree with its call for a budget to help people, particularly those on the lowest incomes and the squeezed middle, deal with the cost of living. We agree that we need to respond to inflation in a strategic way, rather than doing so piecemeal. Budget 2023 is just over three and a half months away and this is a useful opportunity to listen to the views of Senators. It is timely to have this important discussion now rather than the week before, or indeed the week after, the budget.
The national economic dialogue will take place next Monday. It will provide a forum for an open and inclusive discussion on competing priorities and economic perspectives in advance of budget 2023. As the motion points out, countries the world over are facing significant issues in the context of the cost-of-living crisis. Inflation is currently running at over 8% in Ireland, with nearly half of that due to higher energy prices. This is eroding real incomes. Although the reality is the Government will never be in a position to fully compensate people for the rise in the cost of living, we have already made significant interventions and will continue to do all we can to help people.
The Government has demonstrated its willingness to intervene assertively in the economy when that is needed. If one looks at what happened in the past two years during the pandemic, there was unprecedented support. Approximately €48 billion was provided through programmes such as the pandemic unemployment payment, the employment wage subsidy scheme and a range of other supports. Those supports were designed to help workers and businesses, and they worked. The economy has recovered far faster than anybody imagined.
Many commentators predicted a tsunami of redundancies and business failures but that has not happened. Instead, we have more than two and a half million people at work - the highest level of employment in the history of the State. At the same time, the number of people on the live register is now at its lowest level for many years. There are a significant number of job opportunities across all sectors at the moment. As Minister, through our Pathways to Work strategy, my Department, along with the Department of the Minister for Further and Higher Education, Research, Innovation and Science, Deputy Harris, is focused on providing education and training supports in order that people who are currently unemployed have the skills and, most important, the confidence to take on those job opportunities. The one thing on which everybody in this House can agree is that the best way to help a person out of poverty is to help him or her into quality employment.
Equally, all present recognise that it is those on fixed or low incomes who are hit first when it comes to rising food or electricity costs. That is why, last year, I introduced the largest social welfare budget package for 14 years. It is why the Government has continued to respond swiftly as circumstances have changed, with a wide range of further measures to assist with the cost of living. These include the €200 energy credit for all households, two additional lump sum payments of €125 and €100 for those on fuel allowance, cutting the excise rates on petrol and diesel, cutting the VAT on gas and electricity, reducing public transport fares by 20% and extending the 9% VAT rate for the hospitality sector. Those are just a few examples of the recent interventions by the Government to help people with rising costs.
The motion also highlights a range of measures the State has introduced in recent years to help the squeezed middle. These include measures such as free GP care for all children under six, a new universal childcare subsidy and the extension of invalidity benefit and jobseeker's benefit to the self-employed. In the budget last year, we also brought in changes to income tax to help middle-income earners. By increasing the standard rate cut-off point, any couple each of whom earn €45,000 benefited by €830. As was highlighted during the public hearings of the Committee on Budgetary Oversight on the subject earlier this year, adjusting bands and credits upwards, especially in a time of high inflation, is a move to try to maintain the value of take-home pay for all taxpayers.
As the motion notes, the price of renting continues to rise. I acknowledge that the Government needs to do much more in the area of affordable housing.
There is a limit to what the Government can do to offset rising energy costs. We can take steps to reduce the burden but we cannot absorb it in its entirety. Acting to protect households from the most severe impacts of the pandemic and from rising inflation has been both necessary and appropriate. These interventions have come at a significant cost, however, and that cannot be ignored. Immediately before the pandemic, our public finances were on a solid footing. We managed to introduce universal benefits such as those to which I referred, as well as increased pension and core welfare payments. That meant that when the pandemic hit, the Government could respond in a positive and counter-cyclical manner to limit the fall-out.
The reality of being in government is that one has to deal with hard choices. We cannot always do everything we want to do. It is becoming clear to us that the era of free money is over. Borrowing costs are rising, having risen by two percentage points since the beginning of the year. In order to limit the exposure of the public finances to rising borrowing costs, the Government has to take account of that and target a low level of borrowing. This underlines the valid point made in the motion that we must respond to inflation in a strategic way, not a piecemeal one.
Almost every week, the Government responds to motions or calls in the Oireachtas for extra spending to respond to inflation and cost-of-living crisis. Those calls are understandable but I fear what would happen if the Government actually implemented everything that is being sought. Instead, what we need is a well thought-out cross-government and medium-term strategy to respond to inflation in a way that does not simply exacerbate the problem we are trying to fix.
As Minister for Social Protection, my priority will be to protect the most vulnerable people in the months and years ahead. In July, I will host my Department's pre-budget forum. It will be an opportunity to engage with all the different stakeholders and representative groups, such as carers, disability groups, representatives of lone parents and so on. I will be engaging with everybody and listening to all the views at that forum and that will help inform our thinking in a strategic way ahead of the budget.
We need strategic interventions across government as part of the budget. That means a tax and welfare package, measures to reduce the cost of childcare, and looking at other ways we can put money back in people's pockets to help make their lives a little bit easier. Members can be assured of my commitment to do just that.
I thank Senators for the opportunity to speak this evening and I look forward to listening to their contributions.
I welcome the Minister to the House and it is always great to see her here. I thank Fine Gael for this Private Members' time because it gives us an opportunity to talk about the inflationary crisis that this country faces.
The Minister has said that we cannot have people coming into the Oireachtas day in, day out asking for stuff and we need to be strategic. I fully agree with her on that. However, I attend the Order of Business every day and I listen to Government Members talk about hospitals and health issues. Indeed, I commend Senator Buttimer on suggesting, during the Order of Business debate this week, that we have a meeting prior to the budget to discuss things. I thought to myself that we do not have to wait too long as we had this debate arranged.
We all know about the squeezed middle and that term is overused. We all accept that there are issues that concern the large proportion of income tax.
As the Minister and I know, and I do not wish to give her or the Members of this House a history lesson, that the cost of renting a home is too high and it is nigh impossible for most people to purchase a home. Pension and social welfare payments are not sufficient to meet the costs of living. Too many people simply cannot survive on the minimum wage and it has failed to keep pace with the cost of living. The price of petrol and diesel is particularly having an impact on agriculture and enterprise, and we need to do something about that. The Minister hails from a Border county so she and her constituents have particular experiences in that regard. The price of home heating oil now forces people on some occasions to decide whether to eat or heat, and that certainly happens in the winter. Such a situation is unacceptable. The cost of energy prices has gone through the roof. The cost of home rental has forced people back to couch-surfing, particularly students. People can no longer afford to live in the city of Dublin. Today, I spoke to people who work in Leinster House who simply cannot afford to live within a radius of 20 to 30 miles and that is the reality. Childcare fees have gone through the roof and cost as much as another mortgage. None of those facts are new to anybody in here and it is certainly not new to anybody in Leinster House.
One could be forgiven for thinking that the opposite side of the House, that is, the Members supporting the coalition Government who tabled this motion - and I welcome this opportunity to debate the motion - were not in government. They are in government and the Minister's party has been in government for a very substantial time. During the Order of Business when I and other Members deal with healthcare and the childcare crises-----
Yes. Without interruption, may I repeat that healthcare is in crisis. Childcare is in crisis. Housing is in crisis and the Government simply cannot deliver. Education is in crisis. People cannot live on their social welfare payments, so payments need to be increased. I suggest that the tax cuts is Fine Gael re-calibrating its message in order to be politically attractive to its narrow electorate.
Tax cuts over welfare is essential but I do not want tax cuts over essential funding for essential services.
Too many people must wait between two and four years for cancer treatments and I cite an article from one of today's national newspapers stating people have had to wait four years to be treated for a rare cancer gene but cannot afford to see a consultant. As that is the reality, we must be realistic. The coalition has been too slow to respond to the soaring fuel and food costs and we need a mini-budget.
I wish to convey some messages. Before the Oireachtas goes off on its long holidays, I expect a mini-budget to happen. We need to look at VAT and excise cuts on energy and fuel. We need to address the issues of women who could not get up this morning or yesterday morning. One woman rang my office today to say that she rises up every hour to turn her 14-year-old who suffers from scoliosis and he has waited years for treatment. That is the reality. Hundreds of people have contacted our offices to complain that they cannot get support from the child and adolescent mental health services, CAMHS.
As the Minister will know, the Low Pay Commission made 18 recommendations concerning a progressive living wage, which is important. The Tánaiste issued a statement in the last few days saying that a living wage would be phased in over a number of years but that is too late. Quite frankly, it is bit rich to suggest that people can wait for a few years for a living wage to be phased in when politicians in this House and in the Lower House are exceptionally well paid.
My key message is as follows. I urge the Minister not to forget that she is in government and that her party presided over all of these issues, so now to suggest that things will happen is wrong. She has been in power and has not delivered for the people or on these issues so something needs to be done.
Finally, I hope that common sense will prevail and a mini-budget is introduced before the Houses embark on the summer recess because that is needed. Either there is a crisis that must be tackled urgently or there is not. I thank Fine Gael for this Private Members' time because it has given me an opportunity to voice some of the concerns of the people who struggle day in, day out without sufficient financial resources.
I thank the Minister for coming here. The Minister’s party has tabled an important motion because we all know, especially in recent weeks, that the cost of living has increased. I believe that we must go back to basics and ensure that the people on the margins are looked after, namely, the most vulnerable, who are people who have a fixed income from the State or receive pension or unemployment benefits or a disability allowance and who do not have an opportunity to see huge increases in their incomes.
The amount of money that people spend on fuel is a huge proportion of the income that vulnerable people get from the State and, therefore, we must revise the fuel allowance. I do not think that the fuel allowance should just be provided for a short or certain period in the year. I believe that the fuel allowance should be available throughout the year and at different times because electricity bills are high at other times apart from Christmas time when the weather is really cold, and families must pay their electricity bills throughout the year. The fuel allowance needs to be directed at the people on the margins who are in receipt of an income that will not increase.
We must consider helping families as they now face extreme financial challenges. I concur with what colleagues have said about exorbitant childcare costs as I have two children in a crèche. Sometimes childcare costs as much as three times one's mortgage. People have called for core funding to be increased. Many of us in this Chamber have called for childcare to be brought back into the education system and for the State to properly provide it to help families, and women. I mention women because if people cannot afford to pay for childcare, then ultimately it is down to women a lot of the time to stay at home and mind their children. It is the careers of women, therefore, that are put at risk.
On interest rates, while I acknowledge this matter does not come under the remit of the Minister's Department, I must stress that it is very hard to change a mortgage. Many people have a mortgage with a variable interest rate and they will be crucified financially because it is not easy to switch mortgages due to a lack of financial instruments plus the system is archaic. Therefore, I believe that people should be provided with support to switch their mortgage and get a fixed lower interest rate because it is predicted that interest rates will increase over the next two to five years, which will have knock-on effect on mortgage repayments.
We also must assist the people on the margins who are facing and will face massive fuel costs in the next while. I am sure that all of us have texted pictures of our diesel bills to family members and friends declaring how much it cost to fill a fuel tank and that it cost nearly twice as much as this time last year. The soaring fuel costs are unbelievable. To help anyone who relies on transport for their jobs and families who do a lot of transportation we should cut VAT and excise duties in order to give some comfort to families and give a little back.
I thank my colleague, Senator Ardagh, for sharing her time. I welcome the Minister to the Chamber and welcome this opportunity to have a conversation on the cost of living. There are some aspects of the motion that merit discussion and consideration. I am not sure that reducing income tax is the best way to achieve a reduction in childcare costs or medical bills.If we reduce income tax at the same time, that would be difficult because if you reduce income tax, it costs more to do that and you do not have as much money to spend on the other things you would like to do. It is difficult to marry the two in the one budget.
At this time the focus must be on measures such as reducing the cost of childcare and dealing with the cost of fuel for families. As Minister for Rural and Community Affairs, Deputy Humphreys will be aware that those hit hardest by the cost of fuel are those living in rural Ireland who must travel to get to work. In my own area of Mayo, it is quite common to travel, even within the county, from Belmullet or Achill into Castlebar. You could be talking about an hour each way to get to work. It is quite common for people in Castlebar and Ballina to go to Sligo and Galway for work five days a week because many of these people are working in healthcare or in factories. The cost for people to get to work in rural Ireland, which would be under the Minister's brief, is considerable and is putting those families under considerable pressure. A particular measure targeted at those living in rural Ireland going to work faced with that challenge of fuel prices would be certainly welcome.
I note the motion says to reduce the fees for college. I would advocate for a more targeted approach. There are people in this country who are paying college fees and who can well afford to do so but then there are families that cannot afford college. It is not only college fees. It is the cost of accommodation, food, bills and everything that goes along with that. I would much rather see a targeted approach to education where we target the Student Universal Support Ireland, SUSI, grant, expand the grant, put more funding into that so that those who need assistance to get to college actually receive it and those who do not need it do not get it, because we do not have enough to do all of these things. A targeted approach would be preferable.
The same applies with healthcare. Previously, there were plans within the Minister's party to have universal healthcare. We want to make sure that we have access to healthcare for everybody. Access is not equal across the country. There are those who cannot afford to access a doctor who are making the call on a daily basis that they cannot afford the €50 or €60 to go to their GP. On the other hand, there are people who can well afford to pay and are quite happy to pay. I favour a more targeted approach to address and focus on those members of society who are genuinely struggling with the cost of living because not everybody is struggling the same way. Everyone is feeling it but some can afford to pay and some cannot.
I am very much in support of retaining the public transport reductions. That was a good initiative that was brought forward. The Green Party has been calling for that for a long time but we are all on the same page now that by reducing the cost of public transport one will reduce the number of people in their cars, reduce emissions etc. That is a positive.
I would have considerable concern around looking to reduce taxes at a time when we cannot afford to do it and about certain measures, in terms of healthcare, childcare and education, that are not targeted at those who need them most. Those measures merit further discussion and consideration.
As I said, the cost of living is the number one issue that we are all dealing with. We may disagree on the best way to deal with it but we all accept that it is the burning issue, the key issue of the day and we all want to do something about it.
I move amendment No. 1:
To delete all words after "Seanad Éireann" and substitute the following: "notes that:
- Ireland is facing a cost-of-living crisis;
- the cost-of-living crisis is driven by inflation, by external factors such as supply and demand mismatches following the Covid-19 pandemic, the war in Ukraine and domestic factors such as housing and rental crisis inflation;
- inflation reached 7.8 percent in the twelve months to May 2022, the highest rate of inflation in 38 years;
- inflation disproportionately impacts lower and middle-income households, who spend a higher proportion of their income on food, energy and other essential goods and services;
- core social welfare rates have failed to keep pace with the rising cost of living;
- the minimum wage has failed to keep pace with the rising cost of living;
- in the past twelve months:- the price of petrol and diesel has risen by 26 percent and 42 percent, respectively;calls on the Government to take appropriate emergency action, to include:
- the price of home heating oil has more than doubled;
- household energy prices have increased by 57 percent;
- rental prices have increased by 12 percent;
- the introduction of a ‘cost-of-living cash payment’ of €200 for every adult with an income less than €30,000 and €100 for every adult with an income between €30,000 and €60,000;
- an increase in working-age social welfare rates in response to the rising cost of living;
- the establishment of a discretionary fund of €15 million, to assist households with utility debt;
- an increase in the minimum wage in response to the rising cost of living;
- the removal of excise duty applied to home heating oil on a temporary basis;
- a further reduction of excise duty on petrol and diesel;
- an immediate reduction in childcare fees; and
- the introduction of a refundable tax credit equivalent to one month’s rent and a ban on rent increases for a period of three years."
I welcome the Minister.
This is quite a bizarre moment. We have a motion from Fine Gael much of which, essentially, involves the party congratulating itself on the great job it has done on the cost of living before going on then to declare the additional help that we need next January. It is June.
There was a lady on national radio the other evening, a number of Senators may have heard her, called Tracy, who came on to tell people how she had been affected by the cost-of-living crisis, how she had gone three to four weeks without buying her shopping and how unexpected car repairs meant she was not able to buy food. The public transport system does not get her to where she needs to go and she needs her car. She cannot work because of a lack of affordable childcare but also because she has health issues that would hinder her employment opportunities. Right now, she is relying on the Society of St. Vincent de Paul, friends and family for help.
Fine Gael's message this evening is the Government will talk to the people in January. We need a mini-budget now. Sinn Féin has been calling it for months. I cannot believe that on top of missing that call and congratulating themselves on the wonderful job they are doing, they went out yesterday with this nonsense about a 30% tax rate. They have heard the figures from my colleague here already. The health system is in crisis. My colleague, Senator Maria Byrne, in Limerick, knows well the crisis at first hand in University Hospital Limerick. Maybe my colleagues in Fine Gael would like to go down to the emergency department tomorrow and canvas views for tax cuts as patients languish on trolleys for 15 hours at a time. When we have almost 1 million people waiting on hospital waiting lists, Fine Gael's priority, how it wanted to rebrand itself, is as if to say, "Look at us, we are the tax-cutting party." Are they so out of touch with the crisis in the public services?
If the Minister does not want to go to University Hospital Limerick, I would invite her to go in front of the homeless action team's offices where we have no emergency accommodation whatsoever in the midst of the worst housing crisis in the history of the State created by her party. Fine Gael talks about housing as if it is some kind of natural disaster. "Isn't it awful", they say, "Why don't we pull on the green jersey and all try and help?" It is not a natural disaster. It is the result of incredibly poor policies over the past decade which have created this housing crisis. The Minister's message this evening to the thousands of people on housing lists across the country is the Government will give them tax cuts, as if that will fix anything.
I might invite the Minister to come to our village in Castleconnell and talk to people paying €1,400 in rent each and every month. My party has proposed a cut in their rent and a ban on rent increases to give people back money in their pockets, not next January but now, because they are hurting now because they cannot afford their bills and because the cost of diesel, already heading towards €2.20 a litre, apparently will be at €2.50 a litre by the summer, and yet, before the Minister goes off on holidays, the message from Fine Gael is that there is no problem here, the Government will have a budget in October and it will look at the matter in January.
Looking at the nonsense proposal of a 30% tax rate, an economist described it to me yesterday as "fiscal incontinence". That is what it is. We have a fiscal window of €1.5 billion and Fine Gael's proposal costs €1.7 billion. Fine Gael wants to be all things to all people but the fact of the matter is for ten years the party has failed on housing. For ten years, it failed on healthcare. The evidence is there in the hospital wards and in the waiting trolleys in Limerick.
We have the lowest proportion of first-time buyers of houses in Dublin - down to 30%. The Government is failing in so many respects in terms of public services and then the Minister talks about hard choices. Is the hard choice to introduce tax cuts for the already well-off while we have people languishing and suffering each day? Is the Minister that out of touch with what is happening in the country today?
If the Government wants to make hard choices, here is a suggestion. Why not start by scrapping the special assignee relief programme which gives millions of euro in taxpayers' money to millionaire executives in the country? Clearly, that is a step too far. That is a hard choice that Fine Gael will not make.
This is all about rebranding Fine Gael back to basics. It is the Irish Tory party or Thatcherite party that likes to promise tax cuts while it abandons public services. The housing crisis is getting worse, month on month and year on year. Last week, the Minister for Housing, Local Government and Heritage could not even commit to reducing the number of homeless to under 10,000 by the end of the year but, not to worry, there will be budget measures in January and tax cuts.
Seriously, people are at the end of their tethers. We had a housing meeting the other night full to the rafters in Limerick and heard horror stories. One man is living basically in a space for furniture - one of those places where one puts one's furniture when one is between houses. That is where he was. The emergency people had nowhere to send them and the Minister wants to talk about tax cuts.
Fine Gael has had ten years to sort out these problems. It is no wonder that we only had six minutes from Fianna Fáil and the Green Party is nowhere to be seen. I do not blame them. They are clearly embarrassed to be associated with this. They know what is going on here. Fine Gael decides to rebranding the party as a tax-cutting party, but at whose expense? Fine Gael has failed this country in terms of housing, in terms of homelessness, in terms of healthcare and in terms of basic fairness and justice and its members have the gall to come in and talk about tax cuts for the wealthy again. People are seeing through this Fine Gael Government. They are out of touch and, please God, soon they will be out of time.
I propose to share time with Senator Wall.
I thank Fine Gael for this motion this evening. Obviously, the Labour Party has put down an amendment to the motion.It is important that we have an opportunity to discuss this cost-of-living crisis but it is also important to contextualise it. Last week, we heard representatives of the Irish Fiscal Advisory Council, IFAC, talk about the vulnerability of corporate tax revenues. We also heard the Minister for Finance, Deputy Donohoe, ruling out a second budget and telling people that the cost-of-living crisis is not necessarily an urgent issue now and that they can wait until the winter. Our Government is also targeting a surplus in the public finances for next year. Therefore, I must ask the proposers of this motion if they really believe they can pull off tax cuts as well as the wish list of expenditure increases they are also calling for in this motion? Do they really believe they can put an extra few euro in the pockets of middle- and higher-income earners and yet do all the other things they are seeking to do in this motion as well?
I was struck by the pre-budget submission issued by the Irish Small and Medium Enterprises, ISME, association. It called for a levy on incomes over €100,000. Fine Gael and this Government have resisted higher taxes not on those with middle incomes but on the high-paid for many years. This is a measure that the Labour Party and other parties of the left have been calling for. Now ISME is calling for it as well. Therefore, I would like to hear the Minister's response on this point. Certainly, however, if the Labour Party were given the choice, we would want to prioritise investment in public services. We do not believe that the State can afford tax cuts now.
The reality for all those on my right here is that this is not a new cost-of-living crisis. We have a permanent cost-of-living crisis. The sooner we see this as a permanent issue requiring permanent solutions and not once-off measures, the better. For example, when the housing assistance payment, HAP, was introduced, it was thought that it would only last a few short years. Now, however, the State is spending €1 billion annually, and this amount is growing, because we cannot wean ourselves off the dependence on private landlords. Let us also consider the response to energy costs. We know from research undertaken by the Sustainable Energy Authority of Ireland, SEAI, that the difference in the energy costs between a house with a building energy rating, BER, of F compared with one with a BER rating of B is €3,500 annually. We are not going to fix this situation by giving €200 to people or with any miserly increases in the fuel allowance or anything else. We must retrofit those houses so that the cost of fuelling the energy requirements of them is resolved for long into the future. Yet the national retrofitting scheme requires households to stump up at least 20%, or more, of the cost, especially those households that do not qualify for the fuel allowance. Therefore, the Government needs to get real about retrofitting. It must see this as a public good. I see no reference to retrofitting in this motion.
We talk about the cost of childcare as well. The Minister talked about employment being the best way out of poverty. We have two Bills before the Houses now. One is the Right to Flexible Work Bill 2022 and the other is legislation on work-life balance. We know the benefit to be derived from allowing women to have flexible and remote working arrangements. We saw this during the pandemic because the number of women in employment increased. We saw that women were able to take up full-time work because they had those arrangements. Yet this Government is insisting that the right to request flexible and remote work is a perk of employment and that people must be in a job for six months before they are entitled to avail of it. What message does this send out to lone parents and to women who wish to take up employment? It is one thing to say we want more women in employment and that we wish to reduce the number of women and families in poverty, but on the other hand the Government is not undertaking the simple measures of allowing women to take up flexible work from day one of employment. I hand over to my colleague, Senator Wall, now.
I will not read out all that I have prepared. I welcome the Minister to the House. The reality is that we all know that more and more families are hurting and finding it difficult to make ends meet. They are turning to us, and other public representatives, in greater numbers to assist them in finding answers to the demands the cost of living is putting on them. Normally, the country's favourite topic of conversation is the weather, but now that has been replaced by the cost of petrol, diesel, food and maybe even daring to book a night away. The conversations happening in my clinics are about how families will be able to afford the costs associated with children going back to school in the autumn. Many of these conversations are with people who themselves never thought they would enter such a clinic in their lives. The overriding reality is that these problems exist now. Fuel prices are hitting home now and choices are being made now about this week's shopping. It may already be too late to make the decision about having a holiday with the children.
I recently met representatives of the Society of St. Vincent de Paul and Barnardos. Listening to them, the messages from both groups were the same. Their services are stretched to the limit. We need Government intervention now. We need the mini-budget that the Labour Party has called for. It will be too late in three and a half months' time. This is a simple fact of life for the people I deal with day in, day out. This is the simple fact impacting so many people now. This situation requires Government intervention. As has been called for by other Members, a mini-budget is needed now.
We often hear mention made of looking after our own. This is exactly what this motion is seeking to do. It is about looking after the proposers' own. I support it, however, because for me it is about assisting with whatever supports I can and doing whatever I can do in my power to support people. The Minister knows we talk a lot in this House about putting money into people's pockets. None of us are looking to do that so that people will have money in their pockets to spend on a night out or anything like that. We are seeking to put food on people's tables. We are aiming to support people and to enable them to have light and heating. I stress this point.
I genuinely believe that this Government believes it is doing everything it can in its power for the people. For most people in political parties, though not all, this shows how disconnected they are from ordinary people on the ground. For example, my colleague, Senator Kyne, used terms like getting up early in the morning, paying your taxes and all that old language we heard four years ago from the then Taoiseach and now Tánaiste, Deputy Varadkar. I think that was for a party campaign. We have moved on from then. Ultimately, people need supports and we should be exploring having a mini-budget to help the very poor people in my communities. I understand that type of situation is not very visible to many people in this House. I live it and I see it. There is a meeting this evening at 8 p.m. in Ballyfermot to discuss the cost of living. Equally, as my colleague, Senator Chambers, also highlighted, having a car in rural Ireland is not a luxury. It is a must-have for people to be able to get from A to B, even though many places, like Ardara, County Donegal, now have bus services. Unfortunately, those schedules are limited in the context of allowing people to go to hospital appointments, jobs etc. I highlight this aspect as well.
In common with many Members, I met representatives of the Irish National Teachers Organisation, INTO, today. The union has four simple requests for education in future. One of them is a no-brainer and it should be brought in as part of the next budget plan. I refer to supporting and funding schools 100% instead of 80%. That would take a great deal of pressure off the ordinary working parent. I support the Government's consideration of phasing out the minimum wage. We all welcome that here. Four years is the time being considered for this phasing out, but four years is a long time for people struggling. We must examine this issue. It was also noted by the Irish Congress of Trade Unions, ICTU, that a decision has been taken in Germany to increase the minimum wage from €9.82 to €12 from 1 October. Why are we not looking at these issues with the same urgency? We seem to get many of our ideas from other European countries.Why can we not take a leaf of the Germany's book with regard to the minimum wage? This is important. Something the Government is really missing is getting out and speaking to the people and knowing what is going on. I hear people on the street saying that they went to Penneys this month with child benefit for two or three children and were out by more than €300. This is an awful lot of money. People really have to choose between putting on the light or feeding the children. They are genuinely struggling. The Government could do an awful lot more if the political will were there. We have to lose the idea of putting money into people's pockets. We are not looking to put money into people's pockets. What we are looking to do is put food on their tables and support them. It is as simple as that. What we are doing now is not working . I support Fine Gael's motion which is about supporting people. It is a step in a positive direction but the Government is well out of touch.
I thank the Minister for coming to the House to take the motion although I know it was directed at the Ministers, Deputies Donohoe and Michael McGrath. We would swear listening to some of my colleagues on the left today that the motion seeks to divide Irish society. I am minded by something Senator Flynn has just said about needing to look after our own. The privilege of my career to date has been to be the Minister for Social Protection for four years, which is the role the Minister is privileged to hold today. As a co-drafter of the motion, I know it leads with the fact we need to secure a comprehensive welfare package to ensure all of those people on the single fixed income they receive from the State are well protected from the increase in the cost of living. I will also make no apologies for recognising that we have a squeezed middle. If we do not recognise that they cannot afford the cost of living increases that have happened in this country in the past six to nine months, they will become the new vulnerable group because they will not be able to afford their household outgoings. We will end up calling them the new working poor.
I make no apologies for looking for the bands of the social services supported through subsidies to be extended to include people earning between €30,000 and €60,000 a year. The subsidies I am looking to have extended by the Ministers for Public Expenditure and Reform and Finance include the child subsidy scheme. We know it has a band rate of between €26,000 and €60,000 at present. Those earning €26,000 get a sizeable portion of their childcare fees paid. As we go up the band to earnings of €40,000, €50,000 and even €60,000, people tell us the cumbersome access to the support grants almost negates the ability of the amount of money they get to have any impact on their childcare costs.
My colleague, Senator Maria Byrne, spoke about the cost of education. We want to decrease the cost of the fees in universities. The Minister with responsibility for further and higher education said this here this morning. More importantly we want to wider the access for SUSI grants. People who earn a decent wage of €40,000 and pay an enormous whack in tax are precluded from accessing SUSI grants.
We want to look at the cost of healthcare. In the most recent budget it was welcome that prescription charges were reduced from €120 to €80. I believe we can go further. We need to look at parking charges in hospitals. I call for the 20% reduction in transport fees and costs introduced several weeks ago to be made permanent.
This motion is a matter for the Minister for Finance. I know he has been asked by the leaders of the coalition parties to look at this. It demands that we seriously look at introducing a 30% tax rate. For years we have been speaking about the fact that people pay 40% at €36,000, which is far too early. This could only be called an average wage at this stage. It is far too early to be paying 40% in tax. I know that every year we try to protect people from any increases they might get in their salaries by widening the PRSI and USC bands but I have to say that is not good enough. We need to seriously think about doing this over the coming years.
I know this would not be cheap. Introducing a 30% band at the same rate as the 40% is paid this year could cost anything up to €1.5 billion per year over the coming years. We are in the lucky position of having more people working in the State than we ever had in our history. Those working people who go out early in the morning to work long and hard days struggle with the cost of living the same as everybody else on a fixed income. We need to make sure they know that we value the fact that work pays better. Right now it absolutely does not. If we do not do something serious, such as introduce a 30% tax rate next year or in the coming years, and indicate how the roadmap would be made out, we will be at next to nothing because we have been speaking about it for far too long.
I absolutely believe it is the responsibility of the Government to respond to the needs of its people in a sustainable and comprehensible way and this will happen through the budget. I make a call publicly here that I made privately at our meeting earlier. We cannot wait until October or January to recognise that petrol at €2.25 a litre in my local petrol station is absolutely unsustainable even for the people the left would call wealthy. It is not acceptable that the Government does not respond through a financial resolution. It must be done sooner rather than later. It is very difficult to justify that the Government's tax take on the increased petrol prices has gone through the roof while everybody is struggling. Everybody knows that the costs of petrol, diesel and green diesel have gone through the roof. We need to respond now.
I thank the Minister for coming and for her responses to date. I acknowledge the response from the Government, particularly from the Minister, with regard to the fuel allowance in recent months. It recognises that people need help. They need help more with regard to their energy costs. The change to the PSO levy announced yesterday is a welcome change. We need to see changes in the price of petrol and diesel in our forecourts and we need to see them now.
I thank the Minister for her presence. This is an important motion. At its core it is about people. Every one of us in the House understands the pain and frustration of people. The last thing we need is to come in here to engage in political gamesmanship and make accusations about this side of the House. Senator Gavin can look at me and put his video on the Sinn Féin TikTok machine all he wants. I understand. I live in the real world. In the real world people want action and they are getting action.
The Sinn Féin narrative is to divide and conquer. That is its narrative. My only motivation in politics is to represent people and to be a voice to bring change to improve the quality of life and enhance the lives of people. Families throughout the world are demanding action of their governments and not only here in Ireland. I want to make a point to the oil companies. I ask them to reduce their prices. Our economy is recovering from Covid at one level. We are near full employment. Businesses cannot get people to work. There are notices in many outlets looking for staff. Unfortunately an illegal war in Ukraine, rising energy costs and rising food prices are having a profound impact. I repeat my call to the oil companies to reduce their prices. This is a time of global crisis. As President Biden said yesterday, it is a time of war.Let us reflect for a moment on what we debated in the House this afternoon, namely the Bill on sick leave pay. Let us also reflect for a second on what the Government has done for workers by way of paternity, parental and enhanced maternity benefits and the extension of social insurance benefits to the self-employed. These are matters Senator Gavan does not want to speak about or hear because they do not suit his narrative.
Sinn Féin is demanding that social welfare rates be increased. What did the Government do? In the budget in October and subsequently, long before the war in Ukraine, it recognised the pressures associated with the cost of living. However, Sinn Féin did not want to hear about that. It was demanding that the cost of home heating oil be reduced. What did the Government do? It worked to reduce the cost of home heating oil, but Sinn Féin does not want to do that. It does not recognise-----
Sinn Féin demanded an increase to the minimum wage, yet it does not recognise that it was increased eight times under Fine Gael Governments. That is the narrative it wants to peddle.
Let us make it clear that none of us in this House tonight is happy with the way the world is at the moment. All of us recognise the significant challenges ordinary citizens face every day. For Sinn Féin to lecture those of us in government to the effect that we do not understand or care is not fair. It is plainly the politicisation of this Chamber.
We do understand and care. While I accept that this is a political Chamber, Sinn Féin should come in with solutions. It should not come in with empty rhetoric and accuse us of standing idly by when we fully understand the challenges people face. That is why the remarks of the Leader, in the context of the financial resolution, are ones that I hope the Government will listen to and take on board. They propose an immediate step that could be taken to address the cost of fuel. This motion should not divide the House. As the Leader has said, it should unite us. I hope the motivation of all of us is to support an gnáthdhuine, the ordinary person, whether he or she is a worker or an employer. We have in the Minister for Social Protection, who is with us tonight, a person of great empathy and understanding who gets it. She worked in a credit union and understands the people and their concerns. That is why, at Cabinet meetings, she is a voice for the people who need us to support them.
Cuirim fáilte roimh an Aire. I find it interesting to talk of narratives. Let us talk about the Fine Gael narrative. We hear Ministers and spokespeople talking about GDP, the fastest growing economy in the European Union and full employment, but the reality is that one might as well be the emperor strutting around naked because the emperor has no clothes. We are not living in an economy; we are living in a society, and people have been struggling for years under this Fine Gael Government. The costs of housing and childcare are not just new realities for people because they have long been a millstone around families' necks, that is, if they can even get a house or childcare place. The pandemic and war in Ukraine have of course exacerbated the problem and caused energy and food prices to skyrocket. Families are now choosing between heating and eating, but they were doing that a couple of years ago. I did a survey and the respondents told me they were going down lanes to pick up sticks off the road and sleeping in the one room. Elderly people were going to bed during the day to keep warm. Therefore, it is not just down to the pandemic or the war in Ukraine. Nobody is saying the Government has a magic wand or can help every single household but it could do an awful lot more.
The energy poverty strategy lapsed in 2019. Since I came into this House, I have repeatedly asked the Minister where the new energy poverty strategy is and about prioritising people who are struggling to heat their homes. The truth is that energy poverty is not a priority for the Government. We do not have the energy poverty strategy, nor do we have the data on households to determine how many are in energy poverty and what their energy expenditure is. We have been asking for these data for two years but still do not have them. The retrofitting scheme cannot even be assessed for its social impact because we do not have the data. Without them, the retrofitting programme, as it stands, is a wealth transfer.
The cost-of-living crisis we are experiencing indicates how catastrophic life has been for people after ten years of Fine Gael in government. The list of failures, including in respect of housing, healthcare, childcare and the cost of energy, goes on and on. It is interesting to see that, even now, it has got to the point where even the President feels he needs to say something. He is right. What he said yesterday was profound: a republic is about meeting its people's needs. We have a housing disaster. It has long since stopped being a crisis; it is a disaster.
Budget 2021 did nothing for renters. Not a single measure was put in place for renters to address one of the biggest crises in the country. Sinn Féin would put one month's rent back in the pockets of hard-pressed renters and ensure no rent increases for three years. Fine Gael says it cannot be done. It will not even test it in the courts. It would rather see people made homeless.
For those lucky enough to find a place for their child, childcare is a second mortgage. Again, we were told to bring forward proposals. Sinn Féin has fully costed proposals that would immediately reduce the cost of childcare for hard-pressed families. We see childcare as an essential public service.
We have also repeatedly called for an increase in the working-age social welfare rates. Sinn Féin called for a living wage long before any other parties were talking about it. It also called for the establishment of a discretionary fund of €15 million to assist households with utility debts, which the Society of St. Vincent de Paul and Social Justice Ireland have also been calling for. Workers and families can take no more. An increasing number of people are falling through the cracks. It is long beyond the point where we need the mini-budget. We need a comprehensive package of measures. People are desperate. Others have said that we are hearing tonight from Fine Gael that the people will just have to wait it out until October. Even then, the measures in the budget will not come into effect until the new year. Rather than bringing forward a mini-budget with targeted measures and a comprehensive package to help people who are struggling today, the Tánaiste is kite-flying income-tax breaks. Tonight, Fine Gael Senators are doing the same. We are hearing them use the same old tired dog-whistle tropes about the people who get up early in the morning. The full cost of the measure proposed is €1.7 billion, it has been said. That exceeds the Government's planned budget package of €1.5 billion for all new measures, leaving no funding available for hospital waiting lists, childcare, social welfare increases, further support regarding fuel prices, school class sizes, public transport measures and further education measures, or anything else. Is that the Fine Gael policy? Is the policy a grave threat to public services, with no more public services and just a tax break for some workers? That is it. As my colleague Senator Gavan has said, that is Thatcherism 101.
Every single public service in this country is creaking at the seams. The war in Ukraine has brought this into clear focus because we now have refugees sleeping on the floors of hotels. We do not have hotel rooms for tourists because we are housing our homeless and refugees in hotel rooms. Children are living in pain and older people are cold and going hungry. I urge my Fine Gael colleagues to rethink their approach. All they are offering is the equivalent of a price of coffee to some workers. Instead, they could be investing in genuine public services and targeted cost-of-living measures for those who are struggling the most.
The reality is that the Government will never be in a position to compensate people for the cost-of-living increases. In fact, Ireland and the rest of the world are facing a cost-of-living crisis. It is driven by inflation, which is largely caused by factors beyond our control. Sinn Féin is criticising and asking what Fine Gael has done. It is demanding social welfare increases. The Minister for Social Protection, Deputy Humphreys, made over €500 million available in the last budget for social welfare increases.There was a €5 increase in the social welfare working-age payments and pensions. Sinn Féin is demanding the price of home heating oil be reduced. The Minister brought in increases of 55% in the fuel allowance up to an average of €1,139 for the 2021-2022 fuel season. Sinn Féin is demanding the minimum wage be increased. The minimum wage has been increased, most recently by 30 cent, and this has taken it up to €10.50. Only today the Tánaiste spoke about bringing it up to the living wage of over €12. As Senator Boylan just said, Sinn Féin is looking for a discretionary fund of €15 million to help households with utility bills. She should fact-check and look up that there is a scheme in place brought in by the Minister's Department of €45.75 million, which is available for exceptional and urgent needs. Households can go to their community welfare officer and look for help with their bills. That fund is there. The Senator must not be advising her constituents of it and maybe we will let them know about that today. Furthermore, by decreasing taxes you increase people's take-home pay for those in the squeezed middle, who are those paying for most of the benefits Sinn Féin is looking to provide.
I support this motion. I support Senator Doherty's proposals on petrol and diesel. That change needs to be brought in now; we cannot wait until October. Fine Gael, as a party in government, has looked after the people through Covid and will look after the people through this period of high costs of living.
I welcome the Minister to the House. This is a great debate. We have debated this issue up and down and the Minister will hear more before the evening is out. I am sure the Departments of the Ministers for Finance and for Public Expenditure and Reform are looking in at what is being debated here as well.
What has happened over the last ten or 12 years is unprecedented. We have had the crash, the pandemic and now the war. This is happening not just in Ireland but right across the world. There is a scarcity of commodities caused by various things from the war to the pandemic. Work ceased in many places with the result that there was no production. You can see it in semiconductors for cars. There is scarcity of cars because there is a scarcity of semiconductors, batteries and battery parts. That is why the price of rented cars is so high. There is a scarcity of many things right around the world. It is a perfect storm and in many ways, in many areas and in nearly every country in the world, everybody is suffering.
I fully support the motion put down this evening. It is a good motion and one that has allowed every party here debate what has happened. Over the last number of years Governments have pumped more than €50 billion into the economy. They have done some great things. It is unbelievable what Governments have done over the last number of years. That is why the country is going so well at the moment. We have full employment. Why is this? We have full employment because Governments have managed things well. They have borrowed money and pumped it into various sectors and areas in the economy. These are the taxes that are coming back that can help everybody. Look back at what has happened over the last ten or 12 years, as I said. Senator Gavan quoted an economist earlier on. Those same economists said back in 2011 that we had to take money out of the economy and that we had to run down banks. He quoted them as referring to financial incontinence.
-----take money out of the economy and close the economy down. That is what they said. Now they say we should pump money into it. Pumping the money into it has paid off when you look at what has happened. People's salaries had been reduced. Everything was reduced. Social welfare was reduced. Hospital services were reduced. However, all of those have been expanded over the last number of years. When you talk to people and employers they compliment Governments on what they have done and the hard decisions they had to make and will have to make.
I agree with the motion that we need some action in certain areas that have been outlined and it should be over the next number of weeks, in particular. Transport is very costly, as is the cost of fuel. Those areas have been highlighted here and I have no doubt the Minister will take those on board and that the Government will act on those issues in the very near future.
This is an important debate about the cost-of-living crisis. It is interesting when we talk about widening who we are targeting with supports to people who have so-called good salaries that we are shamed for it by some people in this House. We must focus on our ongoing fundamental responsibility to those who are suffering the most, namely, those in and at risk of poverty and people who are surviving, barely surviving or not surviving. However, we must also look at people who are struggling now more than ever and those are not people who are well-off. They are people on the margins and the squeezed middle. They pay a large proportion of income tax but are earning too much to qualify for State supports and are paying hand over fist for essential services and goods. I agree the best response from Government is to reduce costs in a structured way to reduce burdens and bills on families.
I want to talk about childcare and the need to increase subsidies but we must look at supply. A short-term measure there is to look at community childcare. The Minister is doing such great work in rural Ireland. There is phenomenal and transformational change in rural Ireland and suburban villages could also benefit from hubs and community childcare that enables people to live and work locally and bring more people into employment.
One thing I wish to especially focus on is that recently the Government approved legislation that will remove the existing statutory inpatient charge of €80 per night for all children aged under 16 years across public hospitals. I bring to the Minister's attention the children's urgent care centres. These are new care centres. There is one in Connolly Hospital. Until recently it operated from 9 a.m. to 5 p.m., Monday to Friday. It now operates Saturday and Sunday from 10 a.m. to 5 p.m. That is something I called for for a long time. I have had incidents with the kids on Saturdays and Sundays when they are at matches. For children aged up 16 years there is a levy of €75 to use that urgent care centre. I again reference the families who are on such a tight budget, are on the margins or are in the squeezed middle. This is one of the things that can push them over the edge. We cannot allow that to stop emergency care or urgent care for children. We should scrap the levies at children's emergency rooms and also in those urgent care centres.
Cuirim fáilte roimh an Aire. Gabhaim buíochas leis an Seanadóir Currie freisin as a cuid ama a roinnt liom. A Chathaoirligh Gníomhaigh, when I came to the Seanad people told me how much better it was here than in the Dáil because there was a higher quality of debate. That has not been the case this evening and I have been very disappointed with the tone of this debate. It has been reduced, instead of focusing on the issue in the motion, to political mud-slinging and point-scoring.
I do not accept that the Government is out of touch. Every one of us lives in our community, talks to our neighbours and people in our area and seeks to help them all the time. I have the privilege as well, in my professional work, to deal with people across Dublin and the problems they have. Nobody is as in touch as we are in terms of dealing with people and I reject the notion we are not. As for party records, I will stand over the record of Fine Gael, its history and its record in government, especially over the last number of years, seven days a week before I stand over the record of Sinn Féin given the criminality it has defended across this island and the violence and intimidation it has wreaked in communities throughout the island. I will not be lectured by Sinn Féin on that kind of thing. The negativity its members project would suggest that this country is somehow a basket case when in fact if you look at the record of this Government, it has defended ordinary citizens. We are not talking about the wealthy.We are talking about people in average income brackets. People on the average income in this country pay the top rate of tax. I will not apologise for seeking to make those people's lives easier than they are at the moment. I will not apologise for saying that we should be putting in place a package of measures to ensure that those people who collectively pay the bulk of tax can continue to go to work. We must continue to make it worth their while to go to work so they can bring home money to feed their families and pay their expenses as we all would like to do.
That is the difference between Fine Gael and Sinn Féin in this debate. As a Government party and one that aspires to be a responsible party of Government, we have to stand over the commitments we make. We cannot simply come here with a shopping list and say "you should do X, Y and Z" without any attempt to explain how we are actually going to pay for it or justify how it could be delivered. When criticism was made of other speakers, they were shouted down. Senator Gavan has intervened possibly in every speech since that happened.
He has also got up here and told us how awful things are. He seems to think that the solution to the best funded health service in Europe is to put in good money after bad when in fact it is a management issue. Of course there is legitimate criticism to be made across this country. The difference is that Fine Gael, instead of trying to score points, is looking for solutions, trying to tweak things to make life easier for those who are working and trying to deliver for their families. That is what this motion is about. If the Opposition Senators looked at what is being proposed here, they would realise it is actually a compassionate attempt to make life easier for people, not the opposite.
I support the motion. We are trying to flag key issues that need to be addressed while taking into consideration the global issues we have seen, particularly in the last three years when we have seen a pandemic that has affected the world. In Ireland we put nearly €50 billion into the economy to keep it going over that period. That gives an indication of what support the Government put in place to support our society. We have seen a massive war that we thought we would never again see in Europe. That has had a significant impact on commodity prices. We have put forward this motion to try to deal with the cost-of-living issues that have arisen because of those core issues and the inflation that is taking place at the moment. Curbing inflation is an important issue for Fine Gael and the Government. We need to come up with logical and fair proposals that are going to benefit society. The motion goes an awful long way to help with that. I am disappointed by the political games being played here tonight, which are just appalling. This is about putting forward a platform of help and support for the people of our country so they can move forward. There are key issues. Fuel has been mentioned, the price of which is nearly out of our control. We need to look at those core issues and put a plan in place to deal with the fuel crisis at the pump and the fuel crisis that the agriculture sector is experiencing at the moment. It is under exceptional pressure.
Childcare is a massive issue for us a society and as a Government. It is important that we put a strategic plan in place to help all our society when it comes to childcare. I am the father of four kids and we know exactly the issues pertaining. We have four children in primary school at the moment and it is a significant burden and cost we are bearing. We know have to work through with the help of family and other supports. The motion is about bringing support and help to the people and putting a platform in place such that when it comes to budget time, the measures will help our people to move forward in that struggle. That is why the motion is so important and I support it.
We have had an interesting discussion. I support the motion as it is a very serious response to a grave crisis. It struck me when my good friend, Senator Boylan, was speaking that I thought I was listening to an extract from An Béal Bochtby Myles na gCopaleen in the first chunk of her speech. To deliver the list of suggestions she had, we might need to add buttons to the calculator to get the figures all combined together.
We have a very serious set of important propositions here. I wish to address a couple of them and commend them to the House as worthy of particular attention. The tax cuts to assist the squeezed middle - those on low incomes from, say, €20,000 to €60,000 - are proposed because if people in this bracket, who are under awful pressure, get a small pay increase under Building Momentum or under the current agreements, they will end up paying income tax, USC and PRSI to the extent that they will erode their wages. Hence the logic of the tax cuts for these people. They are targeted at people who need them. Welfare increases for pensioners are very important. These are people who suffer particularly from fuel poverty and they need attention. The idea of a lower cost of education through reducing student contributions and increasing eligibility for student grants is very important. A lot of parents suffer here and it is about equality of opportunity.
Reducing the cost of healthcare is another commendable suggestion. We have made massive strides in this area but much more needs to be done. The motion is extraordinarily well crafted in that we have the increase in the cost rental and affordable housing schemes. That is an initiative that is very badly needed. Making the reductions in transport costs permanent is also very important. In Virginia, County Cavan, the N3 route to Dublin is very well used. Buses on the hour are packed. People who use that route tell me that the reduced fare has meant so much to them. Those are practical solutions that can be implemented.
I agree with the Leader of the House on an immediate intervention in the area of fuel. This is an issue in the constituency I share with the Minister, Deputy Humphreys. I commend her on her recent initiative on access to pensions and on the carer's allowance being made available to a wider range of people. In the area we represent, there is effectively no public transport for people who work in factories and low-paid jobs around those counties. They do not have the rail network or buses. They need to have cars and fuel is a major prohibition there. It is a great motion. I hope that it will get the unanimous and fulsome support of the House and that people will see it as a good start to solving a very difficult crisis.
There is no doubt that one of the greatest challenges facing us is the skyrocketing cost of living. Every single one of us in these Houses is being contacted all the time by constituents who believe the cost of a basic standard of living is becoming more and more difficult to meet. That reality is felt right across the country. I and no doubt the Acting Chairman are hearing it all the time in south Kildare. The cost of living has an impact on the quality of life that somebody has in a material sense and in terms of mental health. The stress on any family from the pressures of paying rent or paying a mortgage while also trying to ensure that the family home is heated and the family has enough food is massive.
A recent poll showed that 72% of people understood that a lot of the increased cost of living is down to the war in Ukraine. There is no doubt that the illegal, brutal and outrageous war waged by a tyrannical dictator has sent global energy prices and inflation rates to completely unsustainable levels which we have not seen in decades. It is having a deeply negative impact on all of us on this island.We certainly need to have a summit to bring stakeholders together to try to create a consensus across society about how best we can cope with these unprecedented economic developments. We need to have a social dialogue and a prioritising of the particular spending that means most to people. We need to develop an inclusive process to look at the causes, consequences and implications of inflation.
The fact is that no government anywhere across the globe can completely insulate its people from the realities of such an inflationary cycle, and no party in these Houses can honestly state that they would be able to do that. It is fair to say that the Government has responded to what is another unprecedented situation. To say otherwise is completely disingenuous. Some €2.4 billion has already been allocated in the context of measures to cushion the impact of the rising cost of living. This is a very significant amount of money. For people to say that the Government has not responded in any way is, as I have said, completely disingenuous.
Should we do more? Yes. Can we do more? Yes, I firmly believe that we can. We need to look at very specific areas at which we can target that funding. Many of us would, for example, have had the opportunity to meet with representatives from the INTO earlier. Ensuring that children have the opportunity to go to school, to be warm and to have the capacity to have a hot meal while there is very important. We still have the voluntary contribution - which we know is not voluntary - in so many schools. The capitation grant should be increased and the voluntary contribution should be scrapped.
The State should be providing both free school books and support in respect of the purchase of school uniforms. Children who grow up in households where there is a toxicity of stress are very negatively impacted. Research has shown that children who live in homes that are affected by anxiety, stress and pressure about finances and the family having enough money to support itself in a sustainable way are greatly affected. We need to be able to put enough supports in place where we can, and that includes in the context of education.
I acknowledge that the Government increased the weekly fuel allowance rate and made an additional lump-sum payment in March, along with a special €100 payment to 370,000 households that receive the fuel allowance. This has been very important. We should be able to do more in this regard.
I also acknowledge that there has been a 20% reduction in public transport fares and a 50% reduction in such fares for young people, which is of great importance too. It is important that we do more in that regard, particularly in places like Kildare. When one gets past Sallins in north Kildare, the cost of travel increases exponentially.
The fuel allowance, which was increased last October's budget, is very important. Sinn Féin's proposal was not to increase the fuel allowance at all in the budget. It is important to put that clearly on the record.
Inflation has increased dramatically all over the world. The difference between some Opposition parties and the Government is that we are doing something concrete and substantial about it.
I want to raise the issue of profiteering. There is no doubt that some operators have engaged in a level of price gouging that is adding to the impact of inflation. I say to those businesses to remember that the State and the taxpayers’ money kept their doors open during the pandemic and to remember who will keep them open in the longer term, namely, the Irish people.
The Minister is very welcome. I know of her personal commitment to ensuring that the most vulnerable in society are cushioned as much as possible. That has been very clearly articulated by the decisions she has made as Minister, especially in the area of the fuel allowance, which has been increased by 45% in the past year to 18 months. That is significant. It is true that the Government is taking in more money now in excise duty because of the increased cost of fuel, but that is funding the increase in the fuel allowance the Department of Social Protection has provided. I have no doubt that the Minister is keeping the situation under review and that if further interventions are needed, they will be made.
I support the motion, which is very much in tune with what people are feeling and suffering. They are suffering because bills are going up left, right and centre. All one has to do now is purchase a basket of shopping and one will notice that the prices have increased. This motion will start a conversation within politics but also within Government on what needs to be done.
This is a tripartite Government. Fine Gael will outline its position on how it believes we can help people, the most vulnerable, the stretched middle and the people who are on the margins. We will try our very best to influence the budget process in order to ensure that what has been articulated here this evening as a result of this excellent motion becomes a reality. It will become a reality because we will use the budgetary process as best we can to ensure that the Fine Gael watermark, which is to help, protect and support the people who are struggling, working and supporting this country and who have made it what it is and who will make it will be in the future, is evident.
I welcome the Minister. This Government is one for every citizen of our country. Fine Gael is a party that is fighting for all in our society, including the most vulnerable. The Government and our country have welcomed more than 35,000 people from Ukraine, mainly women and children. We are a country which, through a pandemic and a lockdown, introduced unprecedented supports that were brought forward by the Leader of the House in her previous role. Those supports have resulted in the highest ever number of people in employment in Ireland.
I represent an area of Roscommon and east Galway that has pockets of deprivation where we have fought for DEIS funding. Now, one in four schools, and nearly 240,000 children, will benefit from additional supports. Families will have these extra supports through education. The Minister’s Department is providing hot meals to these schoolchildren.
It is crucial that the average income in this country should be in the €40,000 bracket. It is important that we know that these people and families can live through this period of inflation. They are no longer able to deliver for and to support their families in the way they could a number of years ago. With so many people back at work, we are in a position to ensure that all families will benefit from the supports the Government has been able to offer.
The Minister is very welcome. I will put this in a way that the people who are in the squeezed middle have been described to me recently, namely, those who feel that they have to pay for everything and have nothing left. They have their monthly income. They then have their mortgage and childcare - which amounts to a second mortgage - to pay for. As a result of what has happened in the past six months, they have the equivalent of a third mortgage to pay as a result of the increase in the cost of living. This is not sustainable for the people I know in Tipperary. They cannot manage, have no money left at the end of the month and they need support. We have done this so far, and we need to do more in the next budget.
I agree with the proposals that have been put forward on what needs to be done to tackle the cost of living and the price of fuel. The latter is a significant issue for Tipperary. Most importantly, and I know this as the father of a young child, childcare is a matter that can be tackled. We can have a real impact on people's expenditure every month by taking action in respect of childcare. The Minister is committed to making real and positive changes. She is in Cabinet to make changes in respect of childcare. This will impact all of those families with children who are working night and day just to repay their mortgages and pay for childcare and for diesel just to get to work.This is not a situation that people want to be in. They need the support to which I refer, and they need it as quickly as possible.
We have had a very fruitful and frank discussion. I welcome the Minister's commitment and that of the Government in respect of the motion. Many things have been outlined, including in respect of the cost of childcare and of fuel. It is the squeezed middle, as well as lower paid workers, that is affected. That is the kernel of the debate. There has been overwhelming support for the motion and Members have made positive contributions. It was put forward in good faith to try to help families that are really feeling the pinch. There has been much bashing from our colleagues on the left. I am sure that sense will prevail and that they will see that the motion is trying to deliver for the most vulnerable in society. This is a genuine motion from the heart by all the Fine Gael Senators here tonight. That is why we put it forward.
As the Minister stated, now is the time to have a discussion. It is incumbent on all Departments to come together to see what they can do to deliver for these families. Many have referred to the Minister's Department and everything it has done to provide payments and the supports that were put in place for families especially during the pandemic. Nobody foresaw that the war would cause all this pain. It is not something that will disappear overnight. There has to be a more structured solution. The Minister said that. We need to look at short-, medium-, and long-term responses and at key measures that will alleviate the pain of families on lower and middle incomes. Every family and citizen deserves a degree of certainty. The Government has done a lot. Many things that need to happen have been highlighted.
The motion has, more or less, majority support. It is appreciated that the Government is willing to take it on board. I look forward, as we all do, to working with the different Departments and making meaningful contributions or suggestions as to where we see these cuts and supports happening in the context of families.
Garret Ahearn, Paddy Burke, Jerry Buttimer, Malcolm Byrne, Maria Byrne, Micheál Carrigy, Pat Casey, Shane Cassells, Lisa Chambers, Lorraine Clifford-Lee, Martin Conway, Ollie Crowe, Emer Currie, Aidan Davitt, Regina Doherty, Aisling Dolan, Robbie Gallagher, Pippa Hackett, Seán Kyne, Tim Lombard, Vincent P Martin, Fiona O'Loughlin, Joe O'Reilly, Pauline O'Reilly, Ned O'Sullivan, Barry Ward.
I move amendment No. 2:
"To delete all words after “Seanad Éireann” and substitute the following:
“notes that: - the annual rate of inflation in Ireland has risen significantly reaching 7.8% in May, the highest in over thirty-eight years;
- the rise in inflation is being driven by increased costs for electricity, home heating oil and gas, higher rents, housing costs and mortgage payments, and rising prices for food and fuel;
- the National Minimum Wage only increased by 30 cent or 3% in January which is well below the current rate of inflation;
- the €5 increase in weekly social welfare rates in Budget 2022 is not enough to keep pace with rising prices resulting in a real cut in living standards for those on fixed incomes;
- the Department of Finance reported a record tax take for 2021, with VAT alone raising €3 billion more than 2020, and €1 billion ahead of projections;
- the Irish Congress of Trade Unions issued guidance in December to private sector unions that they should seek pay increases in the range of 2.5 to 4.5 % in 2022;
- Ireland is the most expensive country in the EU for housing costs with record rents, the highest mortgage interest rates in Europe, and a chronic lack of supply that caused house prices to increase by 15.2% in the year to March 2022; recognises that: - the soaring costs of food, heating, fuel and housing is causing real hardship and putting more people at risk of poverty;
- VAT is a tax on consumption which disproportionately impacts on the less well-off, and rising prices in particular on energy and fuel is resulting in a VAT windfall to the State;
- rising prices will cost some households an additional €1,300 this year on their gas and electricity bills after prices rose by over 27% in 2021, amongst the highest in the European Union, while petrol and diesel fuels rose by 33.7%, with petrol prices rising above €2 per litre across the country in June 2022;
- increased economic growth, global supply concerns, and the situation in Ukraine will influence future fuel price rises;
- the proposed €100 off energy bills is tokenistic, not enough for those who need it, and poorly targeted;
- measures to control rents have failed with annual average increases nationally of 5.3% over the last decade, the most recent RTB report showed a 9% increase on an annual basis in the fourth quarter of 2021, while rents in Dublin are now more than 40% above pre-crisis levels;
- the average Irish mortgage interest rate of 2.79% is more than twice the EU average of 1.31% costing households over €2,000 a year with no action to date from Government to bring this down;
- Ireland has the second highest OECD household spend on childcare costs, with couples spending an average of 24% of income and single parents spending 29% of their wages on childcare costs;
- despite the constitutional commitment to free education parents and guardians pay significant out-of-pocket costs to send their children to school;
- since the publication of Sláintecare in 2017 progress on the abolition of patient charges and the rollout of free GP care is taking too long; acknowledges that: - the failure to act on the cost of living crisis in a whole-of-Government way will further reduce the living standards of millions of Irish people and condemn more people to poverty and homelessness;
- the key factors impacting the rising cost of living are within the regulatory and fiscal control of Government; calls on the Government to: - urgently take a whole-of-Government approach to tackling the soaring cost of living;
- introduce an immediate rent freeze and a roadmap to reduce Irish mortgage interest rates to the EU average;
- provide an emergency energy costs relief package for households which should include a temporary time limited reduction in the VAT rate on energy and fuel up until the next Budget, and for the Minister for Finance to seek an EU derogation to allow for the long-term retention of the historic 13.5% rate on electricity and gas after such a temporary VAT cut expires;
- introduce additional targeted supports for those in energy poverty by widening access to the fuel allowance, and commit to the introduction of a refundable carbon tax credit for low-income households to support the long-term phasing out of fossil fuels;
- support pay increases for workers across the economy in line with the rising cost of living;
- legislate to enhance collective and sectoral bargaining laws and frameworks to ensure that working people obtain a fairer share of the wealth they create;
- transform the national minimum wage to a living wage;
- provide for increases in social welfare payments linked to the rate of inflation, with a long-term commitment to bring weekly rates up to the minimum essential standard of living;
- introduce a windfall levy on excessive profits made in the energy, transport, housing and food sectors due to rising prices;
- take comprehensive action to make education free, introduce a universal public childcare model, bring forward the cap on childcare fees, and accelerate the implementation of Sláintecare;
- meet any additional costs of living with Covid-19 through 2022 including the proactive provision of antigen tests and FFP2 and medical grade face masks.”