Aindrias Moynihan (Cork North West, Fianna Fail)
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125. To ask the Minister for Finance the measures being considered other than business loans and grants to assist SMEs with the rising cost of energy to ensure viability of their businesses in view of the cost of living crisis; and if he will make a statement on the matter. [46244/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Government is acutely aware of the difficulties Irish businesses are going through arising from substantial increases in energy bills. Since the beginning of the year, this Government has taken action to ease the burden for energy users, including SMEs, as much as possible. Since Budget 2022, measures of approximately €2.4 billion have been introduced to ease the burden of cost of living pressures. These include a temporary reduction in excise duties charged on fuels, a temporary reduction in the rate of VAT on the supply of gas and electricity, and the electricity credit of €200.

However it must be acknowledged that this energy crisis affects not only Ireland but all of Europe, arising from the war in Ukraine which has led to volatility and supply constraints in energy markets. As the current inflationary environment is primarily driven by global pressures outside of our control, the Government cannot cushion businesses from the entire impact of the rising cost of energy.

It is essential that fiscal policy itself does not become part of the problem: inappropriate measures could lead to second-round effects, counterproductively adding to inflation. Therefore, Government policy will focus on temporary and targeted measures, aimed at those most in need.

In order to directly address rising energy prices at source, the EU is rapidly negotiating a Regulation to include measures aimed at addressing windfall gains in the electricity sector and in fossil fuel production. A key element of the proposal is an infra-marginal price cap in the electricity market, designed to limit windfall revenues for producers not experiencing input cost inflation. There is a benefit to coordinated action across the EU to effectively tackle high energy prices, and my officials are working to support officials in the Department of the Environment, Climate and Communications to progress the EU proposal.

There is a range of supports available to SMEs from the Department of Enterprise Trade and Employment. Along with low cost finance, their online information hub contains information to help businesses become more energy efficient. The information hub is available on the Department’s website at:

enterprise.gov.ie/en/what-we-do/supports-for-smes/.

In the Summer Economic Statement, the Government adapted its budgetary strategy for next year on a once-off basis to take into account the much less benign inflationary environment. Reflecting this, Budget 2023will be a ‘cost of living’ Budget, predominately focused on helping to ease the burden of inflation. Budget 2023will provide for an overall package of €6.7 billion; this has been calibrated to balance the need to provide further support with the need to avoid adding to inflationary pressures. As the Deputy will appreciate, it would not be appropriate for me to speculate on policy decisions in advance of Budget Day.