Mark Daly (Fianna Fail)
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Recommendations Nos. 2 and 4 are related and may be discussed together by agreement. Is that agreed? Agreed.

Conor Murphy (Sinn Fein)
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I move recommendation No. 2:

In page 6, to delete lines 1 to 22 and substitute the following:

Many families across the State are rightly appalled by the Government’s decision to withdraw the fuel tax cuts that were introduced most reluctantly in April. The decision may not make much of a difference to the Government but for ordinary people, increases in petrol and diesel in September, October, November and December will make a significant impact on their quality of life. September through to Christmas is already a very expensive time for people. Last year, Barnardo’s back-to-school cost report outlined everything parents were expected to cover, from school shoes through to voluntary contributions, classroom resources and on and on. It adds up to hundreds of euro per child.

The Zurich cost-of-education report published this year found costs of over €1,700 a year for a primary school child while secondary school education costs €3,000 per annum per child. Just yesterday, online shopping charges of €3 per item for parcels and packages originating outside the European Union came into effect. At a time when people are under serious pressure as a result of the cost of living, the last thing they need is another unexpected charge. Ireland is uniquely exposed because of online shopping and how it is integrated with Britain. The Government could have chosen to support people. It could raise money in other ways and leave the fuel rebate in place. It could have taxed the banks but is more than happy to let the financial crash loophole remain in place, meaning that the banks continue to carry forward losses from 2008 when the economy crashed and offset them against their current booming profits. Even the measures which were introduced in April were hard to access. Many hauliers reported difficulties arising from the three-month wait for the rebate. Deputy Doherty has raised this with the Government numerous times, but we see no willingness to be agile on its part. If the Government had made the cut directly at the pump, hauliers would get the benefit immediately and would not have to wait three months for it. Everybody else would also benefit, including all of those commuters, etc., fill up their cars with petrol or diesel. In addition, it avoids the cash-flow issues that the rebate scheme has ingrained within it.

This recommendation proposes the postponement of the increases in carbon taxes on home heating oil, green diesel and canister gas until October.For months, the Taoiseach ruled this out. While people endured the worst cost-of-living crisis in memory, the Taoiseach stood resolute.

Sinn Féin has always opposed increasing carbon taxes. They are unfair and do nothing for the climate or the environment while alternatives do not exist or are unaffordable. A further increase in this tax punishes those who are already struggling - workers, families and people with disabilities - without giving them an alternative. If this Government had imagination and listened to ordinary people, it would know that punitive tax increases such as these do one thing, that being, force people into deprivation and keep the poorest houses cold.

On recommendation No. 2, the Government typically increases the price of home heating oil, natural gas and solid fuels in May every year and the price of motor fuel in October. Our recommendation would delete all further increases in carbon tax that the Government has outlined from now until May 2030. Our proposition would leave the existing levels in place until this coming October, when they should be reviewed. This will be the right course of action at a time when the weather will be getting colder and people must heat their homes. People are crippled with the cost of living and these fuel rebates must be kept in place.

Recommendation No. 3 seeks to delete all future carbon tax increases on liquid fuel and diesel, for example. For reasons already outlined, the Government should not increase carbon taxes at this point in time.

Recommendation No. 4 proposes that the rate of mineral oil tax will increase on 1 September, 1 October, 1 November and 1 December, in addition to a budgetary increase on 14 October. Families and businesses are already crippled with the cost of everything constantly going up. The Government has the power to help and this legislation should not be enacted.

Robert Troy (Longford-Westmeath, Fianna Fail)
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I will speak to section 2 of the Bill and propose the Government's recommendation in respect of same. The Government's recommendation is No. 4 on the numbered list. I will address Senator Conor Murphy's recommendation No. 2, which the Government does not propose to accept this recommendation.

Section 2 of the Finance Bill 2026 provides for temporary reductions to the mineral oil tax rates as set out in Schedule 2 of the Finance Act 1999, effective from 25 March 2026, and further cuts effective from 15 April 2026. By Government recommendation, section 2 further provides for an extension of these temporary reductions for petrol and auto diesel until 31 August, after which the mineral oil tax reduced rates for these fuels will be unwound on a gradual basis, with a final restoration of these rates on 1 December 2026. Section 2 also provides for an extension of the temporary reduction for green diesel until 31 October, after which the mineral oil tax reduced rate for this fuel will be unwound on 1 November and there will be a final restoration on 1 December 2026.

On 24 March, the Government announced a per litre VAT-inclusive reduction of 20 cent for auto diesel, 15 cent for petrol and 3 cent for green diesel. These cuts were initially legislated to be effective from 21 March to 31 May 2026. On 12 April, the Government announced a further reduction of 10 cent per litre for auto diesel and petrol and a further 2.4 cent reduction for green diesel, bringing the total reduction in mineral oil tax rates to 30 cent per litre for diesel, 25 cent per litre for petrol and 5.4 cent per litre for marked gas oil or green diesel. At that time, we also announced an extension of the timeframe of reduction until 31 July 2026.

On 12 April, the Government announced a deferral of the planned carbon tax increase, scheduled for 1 May, until 14 October 2026. Section 2 provides for this deferral of the carbon component of the mineral oil tax increase for non-propellant kerosene, marked gas oil and other relevant fuels.

On 30 June, the Government announced an extension of the temporary reduction to mineral oil tax and a graduated pathway to the restoration of these rates, as well as an extension of the National Oil Reserves Agency, NORA, levy reduction until 31 August. The temporary reductions to mineral oil tax, which were due to expire on 31 July, will now be extended in full until 31 August, with a phased restoration of the mineral oil tax rates taking place between September and December in four stages. The following mineral oil tax restorations are on a VAT-inclusive basis. On 1 September, there will be a restoration of 7 cent per litre for petrol and 8 cent per litre for auto diesel. On 1 October, there will be a restoration of 8 cent litre for petrol and auto diesel. On 1 November, there will be a restoration of 5 cent per litre for petrol, 7 cent per litre of auto diesel and 2.7 cent per litre for marked gas oil or green diesel. On 1 December, there will be a final restoration of 5 cent per litre for petrol, 7 cent per litre for diesel and 2.7 cent per litre for green diesel.Recommendation No. 2 proposed by Senator Conor Murphy proposes to maintain the full reductions in the mineral oil tax rates on petrol and auto diesel until budget time and reduce the mineral oil tax rate applicable to kerosene used other than as a propellant to zero as well as reducing the rate applicable to liquefied petroleum gas used other than as a propellant. It further proposes to indefinitely set mineral oil tax rates from 14 October 2026 at the rates that were applicable when the rate cuts were introduced in March and April this year.

As a Government, we have stated at the outset that we would monitor the situation closely and reserve the right to adjust our responses as required. We have consistently said - this has been proven in this legislation - that we would avoid a cliff-edge removal of supports. Brent crude, which is the global benchmark for oil price, currently stands at around $72 per barrel. This is down from the peak of $120 per barrel in late April and is now broadly in line with prices recorded immediately before the outbreak of the conflict in late February. In line with easing in wholesale commodity prices, retail prices for fuels have fallen in recent weeks. A further easing of retail prices should be anticipated as lower wholesale prices gradually feed through to the forecourts.

Global oil prices and domestic retail prices have significantly decreased over recent weeks. The situation remains uncertain, which is why the Government is committed to continuing to support families and monitoring the situation as it evolves. The Government's recommendations to the Bill are reflective of current macroeconomic and energy market situation. The restoration of the mineral oil tax rates will be done on a gradual basis, commencing on 1 September. We continue to monitor the situation closely and we reserve the right to adjust our response as required.

Government measures have helped and will continue to help alleviate some, but not all, of the pressures being felt by households and businesses affected by fuel price increases as a result of the conflict in the Middle East. The cumulative total cost of mineral tax reduction measures contained in Government recommendations to section 2 of the Bill is estimated at €655 million between March and December 2026.

For the reasons I have outlined, I am not proposing to accept Senator Conor Murphy's recommendation, but I do propose that the Government's recommendation be accepted.

Mark Daly (Fianna Fail)
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Recommendations Nos. 3 and 5 to 7, inclusive, are related and may be discussed together by agreement. Is that agreed? Agreed.

Sarah O'Reilly (Aontú)
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I move recommendation No. 3:

In page 6, to delete lines 56 to 67, and in page 7, to delete lines 1 to 4.

I support all of the recommendations to this Bill put forward by the Opposition. Recommendations Nos. 3 and 5 to 7, inclusive, speak directly to the cost-of-living crisis facing every single family across the country. At what point does the Government accept that people cannot afford any more? Every week, I meet people who are working hard and doing everything right but who are worse off than they were five years ago. One woman contacted my office after she had paid her electricity bill because she did not know how she was going to afford the week's groceries. We ended up having to get vouchers from the Society of St. Vincent de Paul for food that week.People who work hard 40 hours a week should not have to rely on charity to feed their children. That is the reality for thousands of families across the country yet the Government's response is to make fuel even more expensive. In effect, it is really a tax on people who are working. The current plan is to increase the price of diesel by 34 cent a litre and the price of petrol by 29 cent a litre by the end of the year. Farmers, agricultural contractors and hauliers came out in force to protest because their businesses, which provide their livelihood, could not survive under the conditions at that time. It was because of their collective work that the Government had to reduce excise duty. The Government had no choice but to listen because the level of public outrage was too much for it to ignore. The Government cannot continue this cycle of hiking up prices, forcing people out onto the streets to protest, before introducing temporary reductions. It is not a sustainable policy. As I have said before, given the amount of money the State wastes without even blinking an eye, I actually think it could do with less money. The Government should take the burden off people and learn to manage its finances more prudently.

The Government seems to believe everyone can simply buy an electric car. The reality is that most families do not have €40,000 or €50,000 sitting in a bank to buy an EV. They are not the best thing in rural areas. Even if they did have the money, public charging costs have risen to a point at which, in many cases, it is now more expensive to charge your electric vehicle than to fill a vehicle with petrol or diesel. For many people, particularly in rural Ireland, driving is not a luxury. The Minister of State should know that. It is how people get to work and bring their children to school. They cannot simply leave the car at home because the Government tells them they should. All that happens is that they pay more for what is a necessary aspect of their lives. It is a punitive tax on those who work.

We now get to the carbon tax. We were repeatedly told that this is essential because it funds climate action yet the responses to Aontú's parliamentary questions have shown that hundreds of millions of euro collected in carbon tax have not actually been spent on climate measures. From 2020 to 2023, €247 million of money collected went unspent. This money was taken out of the pockets of people who cannot afford milk and butter only to be left sitting in the Government's coffers. At the same time, families who have been approved for SEAI grants are waiting two or three years to get works done. This is not because there is no money but because there are not enough qualified workers to carry out the retrofits. The Government keeps increasing the tax even though the money is just sitting in a pool unused and unspent. That is why recommendation No. 7 is so important. It simply asks the Minister to examine the Exchequer implications of abolishing carbon tax and to identify alternative ways of funding climate measures. It is a very modest proposal. We have to explore alternative options to fund retrofitting, especially when the money is just piling up. You cannot tax people into changing their behaviour when there are no realistic alternatives, particularly in rural Ireland. It is easy to pass legislation increasing the cost of heating a home or filling a car but it is not easy for families to absorb these additional costs.

Robert Troy (Longford-Westmeath, Fianna Fail)
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I will respond to Opposition recommendations Nos. 3 and 5 to 7, inclusive, together. Recommendations Nos. 3, 5 and 6 from Senators Sarah O'Reilly and Conor Murphy effectively propose an end to the carbon tax trajectory at the rates applicable prior to the rate cuts introduced in March and April of this year. Recommendation No. 7 from Senator O'Reilly asks that the Minister for Finance examine the implications of abolishing the carbon tax, assess the estimated reduction in tax receipts that would result, and assess options to replace these tax receipts by other means. I am not sure what other means she is talking about.

On 30 June, Government announced an extension of the temporary reductions to the mineral oil tax. These temporary reductions, which were due to expire on 31 July, will now be extended to 31 August for petrol and auto diesel and to 31 October for marked gas oil. The mineral oil tax rates will be restored on a phased basis, starting from 1 September for petrol and auto diesel and 1 November for green diesel, with all rates fully restored from 1 December.The Government recommendations included as part of the Bill are reflective of the current macroeconomic and energy market situation. The restoration of mineral oil tax rates will be done on a gradual basis, commencing on 1 September. We continue to monitor the situation closely and continue to reserve the right to adjust the response as required.

As regards carbon tax, the mineral oil tax comprises non-carbon components and a carbon component, which is commonly referred to as the carbon tax. Legislation currently provides for multi-annual increases to the carbon component of the mineral oil tax, as well as increases to the natural gas carbon tax and solid fuel carbon tax rates. As the Senators will be aware, the programme for Government committed to continuing with the planned carbon tax increases, aligning with recommendations from the Climate Change Advisory Council and scientific experts, to using the resulting revenues raised to support climate action measures and to ensuring the most vulnerable are protected from unintended impacts of the tax increases. This includes funding from retrofitting and agri-environmental schemes, alongside targeted social welfare and other initiatives to prevent fuel poverty and to ensure a just transition. These measures are designed to be progressive.

To give effect to the programme for Government commitment to protect the vulnerable, a targeted package of social welfare protection interventions was developed, informed by ESRI research commissioned to address this issue specifically. As part of budget 2026 the Government was allocated over €4.2 billion in carbon tax revenue for these purposes since 2020. ESRI analysis consistently shows that the lower income deciles are better off as a result of the social protection measures funded by the increased carbon tax. In budget 2026, over €1.1 billion was allocated to climate action measures and to ensuring the most vulnerable are protected from unintended impacts of the increase. This was an increase on the 2025 allocation and included funding of €566 million for retrofitting programmes, just transition and the ODA green climate fund, €350 million for targeted social welfare interventions such as fuel allowance, and €173 million for green and sustainable farming measures.

In relation to the retrofitting programme, Senator O'Reilly seems to welcome deep retrofitting because she is complaining that people are waiting too long. I agree with her and I would like to see it happening much quicker but the reason there is an extended waiting list is because it is hard to get tradespeople to do it and because of the success of the scheme. I am sure all of us here who operate offices can speak of the huge number of people availing of this scheme. More and more people come to know about it when they see their neighbours accessing it.

From my experience in my constituency people are quite thankful for the scheme. It is one of the best ways to drive down energy costs for low-income families. On average we are speaking about savings on energy costs in excess of €1,000 a year when the deep retrofit is completed. As Senator O'Reilly knows, people on the fuel allowance do not pay a penny towards the deep retrofit. It is a really progressive scheme. Pausing the carbon tax trajectory would decrease the funding available for schemes such as this. Rather than speaking about expediting it and cutting down the waiting lists, it would only prolong them.

Our need to decouple from fossil fuel dependence and achieve energy security is even more apparent now, given the levels of volatility in the international energy markets. Ireland's long-term commitment to tackling climate change remains strong. A further consideration for the Government is Ireland's derogation request in respect of the EU emission trading system for buildings, road transport and additional sectors, also known as ETS2. The ETS2 directive provides for member states that operate a national carbon tax in the buildings, road transport and additional sectors to apply for a derogation from obligations under the EU ETS2 once certain criteria are met. The derogation allows a member state with a carbon tax rate equivalent to or higher than the average ETS2 auction price to exempt regulated entities from the obligation to surrender ETS2 allowances between 2028 and 2030. Ireland has applied for a derogation from ETS2 on the basis of the national carbon tax, which is currently higher than the expected average auction price for allowances.To fulfil derogation criteria, Ireland’s carbon tax must, on average, remain above that of the ETS2 allowance price. Otherwise, Ireland would be effectively opting into the ETS2 arrangements. Pausing the carbon tax trajectory would increase the possibility that Ireland would be opted into ETS2.

The proposed recommendations from Senators O’Reilly and Murphy would come at great cost to the Exchequer and could potentially jeopardise other areas of investment. The package of Government support measures, which now totals over €1 billion, is helping to reduce the cost burden at the petrol pump, supporting those most at risk of energy poverty and assisting key sectors, including agriculture and haulage, that are critical to keeping our economy moving. These measures are deliberately time-bound and targeted because our approach must be both responsive and responsible. The Government will continue to act in a way that protects the most vulnerable and sustains our economic stability. As I said earlier, we will continue to monitor the situation and act accordingly, just as we have from the get-go. For the reasons I outlined, I am not in a position to accept the recommendations.

Sarah O'Reilly (Aontú)
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I thank the Minister of State for his reply. I wish to ask about a few things. I am looking for an assessment to be carried out , and the Minister of State’s indicated that this would give rise to a great cost for the Exchequer. The Government can be accused of the same thing I can be accused of, however, which is not having actual facts. What is the nature of that great cost? How much is it? That is what this recommendation is looking for, namely an assessment of the estimated annual reduction in tax receipts and the options available. It is about seeking other options. The social protection measures are very welcome, but we have the new working poor. These are the people we are most worried about, and the carbon tax affects them the most.

The Minister of State also indicated that my suggestions would only prolong the scheme times. I do not agree with him. We do not know that. I do not think that this has been thought through or that the alternatives have been investigated by the Government. Such alternatives should be investigated. That is all the recommendation asks of the Government.

Robert Troy (Longford-Westmeath, Fianna Fail)
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There is a cost to some of the Senator’s recommendations. This arises on foot of the fact that she is proposing to stop the upward trajectory. If that change were to be introduced, there would be a cost associated with it. We can agree that is a matter of fact. I do understand that one of the Senator’s proposals is to carry out a review of what alternatives could be used. That is fair enough. There is no cost to a review. That review is already happening, however, because every year the Department of Finance, working with the Department of public expenditure, produces the tax strategy papers whereby every tax head is examined in terms of the money it is generating annually. That includes carbon tax, VAT, PAYE and corporation tax. The information obtained in that regard feeds into the summer economic statement, which outlines what the projected tax take for the country is going to be and the headroom relating to the upcoming budget. This is an annual process whereby every tax head, not just that relating to carbon tax - and I accept that the Senator’s recommendation is exclusively concerned with the carbon tax - is examined in terms of what has come in by the end of June and what it is projected will come in by the end of the year.

In the context of the forthcoming summer economic statement, the Minister, Deputy Chambers, and the Tánaiste, Deputy Harris, will outline the parameters for the forthcoming budget. Every political party will then have an opportunity to feed into the budgetary process. The budget will be published by the governing parties and the Opposition parties will come forward with their alternative budgets.

It would be wrong to say that this carbon tax revenue could be compensated for in other ways.As of budget 2026, that is, last October, over €4.2 billion in carbon tax had been collected since 2020. All of that has been going back into climate measures like retrofitting, fuel allowance, SEAI grants, environmental schemes from the Department of agriculture and funding for the just transition. Those moneys are being spent in the way intended all while ensuring those on the lowest incomes are protected against unintended consequences. The Senator mentioned the working poor. In recognition of people who are struggling and avail of the working family payment, in last year's budget we extended the fuel allowance. That meant 40,000 households became eligible for the allowance that had not been eligible before. That was in recognition that earners on lower incomes needed additional help.

Today is 7 July and we are focused on getting ready for budget 2027. That will be presented only a few weeks after the Dáil resumes after the summer recess. It is critically important and the Tánaiste, the Taoiseach and I are on record as saying there must be something in this budget for working families. Whether that is increased allowances or a reduction in the income tax rate, which is obviously my preference, people who are working should feel the benefit in this budget. I have every expectation they will.

Mark Daly (Fianna Fail)
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Before I call Senator O'Reilly I welcome guests of Deputy Sheehan from the United States of America, as well as guests of Deputy Malcolm Byrne, who are teachers with a Gorey connection, I think. Enjoy the school holidays.

Sarah O'Reilly (Aontú)
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This is the last time I will come in on this point. I accept what the Minister of State is saying. We are both more or less saying the same thing. It would be wrong not to recognise the measures the Government introduced have eased the burden on people who were put to the pin of their collar. People are less anxious and stressed out and the measures have eased the burden. Therefore, this was not a made-up reason to protest but was a protest based on a genuine need. If those pressures are put back on people who are to the pin of their collar we could have an escalation again and none of us want to see that. It is our responsibility to see the measures introduced have worked and worked well, which I think everybody agrees. We need to do more than tax people again. We need to come up with more alternatives. I hope what the Minister of State said is right and the budget deals with this more appropriately. However, at the minute those burdens have been eased and we cannot keep the people who are working and keeping the country afloat taxed so highly they are unable to work, because it then becomes a hierarchy of needs. Are we going to tax them and tax them until we put them out of business, meaning they go on social welfare and we have to pay for them anyway? That is more or less what I am saying. If the Government taxes people until it puts them out of business, it is going to have to support them in some way anyway.

Conor Murphy (Sinn Fein)
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I move recommendation No. 5:

In page 7, to delete lines 20 to 24.

Conor Murphy (Sinn Fein)
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I move recommendation No. 6:

In page 8 to delete lines 1 to 6.

Sarah O'Reilly (Aontú)
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I move recommendation No. 7:

In page 8, between lines 7 and 8, to insert the following: “(2) The Minister shall undertake an examination of the Exchequer implications of abolishing Carbon Tax, including an assessment of the estimated annual reduction in tax receipts and the options available to offset such reduction.”.

Mark Daly (Fianna Fail)
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Recommendation No. 8 in the names of Senators Harmon and Cosgrove has been ruled out of order.

Mark Daly (Fianna Fail)
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When is it proposed to take the next Stage?

Pat Casey (Fianna Fail)
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Now.

Mark Daly (Fianna Fail)
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Is that agreed? Not agreed.

Mark Daly (Fianna Fail)
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When will the next Stage be taken?

Garret Ahearn (Fine Gael)
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Now.

Mark Daly (Fianna Fail)
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Is that agreed? Agreed.