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Dáil Éireann debate -
Wednesday, 27 Apr 2022

Vol. 1021 No. 2

Carbon Tax: Motion (Resumed) [Private Members]

I must now deal with a postponed division on amendment No. 1 to the motion regarding removal of the carbon tax.

The following motion was moved by Deputy Michael Healy-Rae on Wednesday, 27 April 2022:
That Dáil Éireann:
notes that:
— the regressive carbon tax was introduced by the Fianna Fáil/Green Party Government in 2010;
— the tax initially applied to liquid and gaseous fuels at the rate of €15 per tonne of carbon dioxide (CO2);
— the tax was extended to solid fuels in 2013 under the Fine Gael/Labour Party Government;
— there were phased increases of the tax to reach €26 per tonne in 2020;
— Budget 2021 further raised the tax to €33.50 per tonne of CO2 on automotive fuels in October 2020, and on all fuels as of May 2021;
— the Finance Act 2020 legislated for annual increases in the rate of carbon tax out to 2030, which will bring the tax rate to €100 per tonne;
— the 2022 hike alone is €7.50, bringing the overall rate of carbon tax to €41 per tonne, with this increase being applied from 13th October, 2021, for diesel and petrol and from 1st May, 2022, for all other fuels;
— the estimated additional yield from the current €7.50 increase in the carbon tax is €108 million in 2022, and €147 million in 2023;
— the carbon tax currently adds €7 to a 60-litre fill of petrol, and this will increase by an additional €1.28 each year to 2030;
— the carbon tax currently adds €8.10 to a 60-litre fill of diesel, and this will increase by €1.48 each year to 2030;
— from 1st May, 2022, the carbon tax:
— on a 900-litre fill of home heating oil will increase by €19.40, bringing the total carbon tax applied to €106.07;
— on 11,000 kilowatt-hours of natural gas will jump by €16.95, bringing the total carbon tax to €92.62;
— applied to a bag of coal (40 kilogram (kg)) will increase by 89 cents, bringing the total carbon tax applied to €4.90 per bag; and
— applied to peat briquettes (12.5kg bale) will jump by 20 cents, bringing the carbon tax applied to €1.07 per bale; and
further notes that:
— the primary purpose of the carbon tax is to act as a disincentive, which can only be effective if members of the public are using more energy than they require and if alternative options are available, however, this is not the case in Ireland as many people across all sectors of the economy are desperately trying to reduce their energy usage and despite this are struggling enormously to pay crippling existing charges;
— the Fuel Allowance is only paid to a relatively small number of households, meaning that the majority of households do not benefit from the modest payment and are therefore not shielded from ongoing drastic energy price increases;
— the carbon tax is a central contributing factor to Ireland's record cost of living increases, with the tax increasing the direct costs of everything from food and fuel to other goods and services;
— the carbon tax does absolutely nothing to address the infrastructure needed for a low carbon economy, infrastructure like a smarter grid or a network of electric vehicle charging stations;
— Ireland's carbon taxes are costing our people an increasing amount of money each year and are clearly not working from a public policy standpoint; and
— inflation is one of the key economic issues facing Irish families, farmers and small businesses and the carbon tax is making these tough times much tougher by making it more expensive to drive to work, run a farm, haulage, transport or any other type of business, or to heat a home or community facility; and
calls on the Government to:
— fully acknowledge that the carbon tax is first and foremost a tax plan and not an environmental plan;
— make life much more affordable for all Irish people by scrapping the carbon tax and only reintroducing any form of carbon taxation following the passage of a democratic referendum, supported by a majority of the people;
— commission and publish an independent financial analysis, which would determine the household and sectoral impacts of the carbon tax to Irish society, together with any possible benefits, prior to a referendum;
— recognise that a more effective climate change strategy would harness the full potential of new and emerging technologies, to spur innovations like the ones that have made solar one of the cheapest forms of energy in much of the world and electric cars a viable alternative to petrol and diesel-powered ones; and
— fully accept that this Government's climate policy logic, in which carbon pricing is the central policy response, is deeply flawed.
Debate resumed on amendment No. 1:
To delete all words after "That Dáil Éireann" and substitute the following:
"notes that:
— the carbon tax is not behind the current spike in energy prices as the annual rate of consumer price inflation, as measured by the European Union's (EU) Harmonised Index of Consumer Prices, picked up sharply over the course of last year, and stood at 6.9 per cent in March - the highest reading since the series began in 1997;
— the key driver of this increase is increases in wholesale energy prices as a result of the rapid rebound in global demand and, more recently, the war in Ukraine;
— in this context changes to carbon tax rates are having a relatively small impact on current energy prices, with the Budget 2022 carbon tax increase, which came into effect in October last year, adding approximately 2 cents per litre in tax to petrol and diesel;
— the increase in rates for home heating fuels such as kerosene, gas, and solid fuels was delayed until 1st May, 2022, to mitigate against impacts during the winter heating season, and the May 2022 increase will add approximately €21.56 to a 1,000-litre fill of kerosene and 20 cents (VAT inclusive) to a 12.5 kilogram bale of briquettes;
— many of the drivers of current inflationary pressures are global in nature, and therefore Government policy is limited in what it can do to mitigate these trends;
— the Government has nonetheless taken significant action in this regard, Budget 2022 contained a large range of measures to protect households from the rising cost of living including a personal income tax package worth €520 million and a social welfare package of over €550 million;
— there was an increase in the weekly rate of the Fuel Allowance by €5 to €33 a week so that €914 was paid to eligible households over the course of the winter and an additional lump-sum payment of €125 was paid to the 370,000 households receiving the Fuel Allowance in mid-March 2022, with a further €100 again to be paid in April;
— a further package of measures, to the value of €320 million, was introduced with effect from 10th March, reducing the excise duty on petrol, diesel and Marked Gas Oil (MGO) by 20, 15 and 2 cent per litre respectively, and these measures are being extended to 12th October, 2022, with an additional 3 cent reduction for MGO, costing €97 million;
— VAT will be reduced from 13.5 per cent to 9 per cent on gas and electricity bills from the start of May until the end of October, costing €46 million, and there will also be a reduction in the Public Service Obligation (PSO) levy to zero by October 2022;
— from April all residential electricity customers will see the Electricity Costs Emergency Benefit Payment of €200 (including Value Added Tax (VAT)) credited to their accounts; and
— these measures more than offset the increased costs associated with the carbon tax increase; and
recognises that:
— carbon tax is a key pillar underpinning the Government's Climate Action Plan to halve emissions by 2030, and reach net zero no later than 2050;
— the Programme for Government: Our Shared Future committed to increasing carbon tax and the Finance Act 2020 provides for a 10-year trajectory for carbon tax increases to reach €100 per tonne of carbon dioxide (CO2) by 2030;
— a significant portion of carbon tax revenue is allocated for expenditure on targeted welfare measures and energy efficiency measures, which not only support the most vulnerable households in society but also, in the long-term, provide support against fuel price impacts by reducing our reliance on fossil fuels;
— previous analysis undertaken using SWITCH, the Economic & Social Research Institute tax and benefit model, to simulate the impact of the carbon tax increase and the compensatory welfare package has confirmed that the net impact of the combined measures is progressive and households in the bottom four income deciles will see all of the cost of the carbon tax increase offset, with the bottom three deciles being better off as a result of these measures;
— in the long run, the best way to protect Ireland from the impact of international fossil fuel prices is to reduce our dependence on them, and we will achieve this through the progressive decarbonisation of Irish society and through the steps that will be taken to meet the Government's commitment to reach net zero greenhouse gas emissions by 2050; and
— furthermore, recent analysis undertaken by the Department of Finance using SWITCH has confirmed that the suite of recently announced measures more than offset the carbon tax increases for all income deciles, with the following measures being included in the analysis:
— the lump-sum increase in the Fuel Allowance of €100;
— a cut in the VAT rate on gas and electricity from 13.5 to 9 per cent;
— a reduction in the PSO levy of €58.57 annually; and
— an extension of the cut in excise duty of 15 cent for diesel and 20 cent for petrol from 31st August, 2022, to the Budget Day in October; and
— overall, in net terms, all households see increases in disposable income, with lower income households seeing the greatest proportional gains, reflecting the progressive nature of the measures.
-(Minister for Finance)
Amendment put:
The Dáil divided: Tá, 77; Níl, 58; Staon, 0.

  • Brophy, Colm.
  • Browne, James.
  • Bruton, Richard.
  • Burke, Colm.
  • Burke, Peter.
  • Butler, Mary.
  • Byrne, Thomas.
  • Cahill, Jackie.
  • Cairns, Holly.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Carroll MacNeill, Jennifer.
  • Chambers, Jack.
  • Collins, Niall.
  • Costello, Patrick.
  • Cowen, Barry.
  • Creed, Michael.
  • Crowe, Cathal.
  • Devlin, Cormac.
  • Dillon, Alan.
  • Donnelly, Stephen.
  • Duffy, Francis Noel.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Feighan, Frankie.
  • Flaherty, Joe.
  • Flanagan, Charles.
  • Fleming, Sean.
  • Foley, Norma.
  • Gannon, Gary.
  • Griffin, Brendan.
  • Harris, Simon.
  • Haughey, Seán.
  • Higgins, Emer.
  • Humphreys, Heather.
  • Kehoe, Paul.
  • Lahart, John.
  • Lawless, James.
  • Leddin, Brian.
  • Madigan, Josepha.
  • Martin, Catherine.
  • Matthews, Steven.
  • McEntee, Helen.
  • McGrath, Michael.
  • McGuinness, John.
  • McHugh, Joe.
  • Moynihan, Aindrias.
  • Moynihan, Michael.
  • Murnane O'Connor, Jennifer.
  • Murphy, Catherine.
  • Naughton, Hildegarde.
  • Noonan, Malcolm.
  • O'Brien, Darragh.
  • O'Brien, Joe.
  • O'Callaghan, Cian.
  • O'Callaghan, Jim.
  • O'Connor, James.
  • O'Dea, Willie.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Gorman, Roderic.
  • O'Sullivan, Christopher.
  • O'Sullivan, Pádraig.
  • Ó Cathasaigh, Marc.
  • Ó Cuív, Éamon.
  • Rabbitte, Anne.
  • Richmond, Neale.
  • Ring, Michael.
  • Ryan, Eamon.
  • Shortall, Róisín.
  • Smith, Brendan.
  • Smyth, Niamh.
  • Smyth, Ossian.
  • Stanton, David.
  • Whitmore, Jennifer.

Níl

  • Andrews, Chris.
  • Bacik, Ivana.
  • Barry, Mick.
  • Boyd Barrett, Richard.
  • Brady, John.
  • Browne, Martin.
  • Buckley, Pat.
  • Canney, Seán.
  • Carthy, Matt.
  • Clarke, Sorca.
  • Collins, Michael.
  • Conway-Walsh, Rose.
  • Cronin, Réada.
  • Crowe, Seán.
  • Daly, Pa.
  • Doherty, Pearse.
  • Donnelly, Paul.
  • Ellis, Dessie.
  • Farrell, Mairéad.
  • Fitzmaurice, Michael.
  • Fitzpatrick, Peter.
  • Funchion, Kathleen.
  • Gould, Thomas.
  • Grealish, Noel.
  • Guirke, Johnny.
  • Healy-Rae, Danny.
  • Healy-Rae, Michael.
  • Howlin, Brendan.
  • Kenny, Gino.
  • Kenny, Martin.
  • Kerrane, Claire.
  • Lowry, Michael.
  • Mac Lochlainn, Pádraig.
  • McGrath, Mattie.
  • McNamara, Michael.
  • Mitchell, Denise.
  • Munster, Imelda.
  • Murphy, Paul.
  • Murphy, Verona.
  • Mythen, Johnny.
  • Nash, Ged.
  • Naughten, Denis.
  • Nolan, Carol.
  • O'Donoghue, Richard.
  • O'Reilly, Louise.
  • O'Rourke, Darren.
  • Ó Laoghaire, Donnchadh.
  • Ó Snodaigh, Aengus.
  • Quinlivan, Maurice.
  • Ryan, Patricia.
  • Shanahan, Matt.
  • Sherlock, Sean.
  • Smith, Bríd.
  • Smith, Duncan.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Tully, Pauline.
  • Ward, Mark.

Staon

Tellers: Tá, Deputies Jack Chambers and Brendan Griffin; Níl, Deputies Mattie McGrath and Michael Collins.
Amendment declared carried.
Question put: "That the motion, as amended, be agreed to."
The Dáil divided: Tá, 77; Níl, 58; Staon, 0.

  • Brophy, Colm.
  • Browne, James.
  • Bruton, Richard.
  • Burke, Colm.
  • Burke, Peter.
  • Butler, Mary.
  • Byrne, Thomas.
  • Cahill, Jackie.
  • Cairns, Holly.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Carroll MacNeill, Jennifer.
  • Chambers, Jack.
  • Collins, Niall.
  • Costello, Patrick.
  • Cowen, Barry.
  • Creed, Michael.
  • Crowe, Cathal.
  • Devlin, Cormac.
  • Dillon, Alan.
  • Donnelly, Stephen.
  • Duffy, Francis Noel.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Feighan, Frankie.
  • Flaherty, Joe.
  • Flanagan, Charles.
  • Fleming, Sean.
  • Foley, Norma.
  • Gannon, Gary.
  • Griffin, Brendan.
  • Harris, Simon.
  • Haughey, Seán.
  • Higgins, Emer.
  • Humphreys, Heather.
  • Kehoe, Paul.
  • Lahart, John.
  • Lawless, James.
  • Leddin, Brian.
  • Madigan, Josepha.
  • Martin, Catherine.
  • Matthews, Steven.
  • McEntee, Helen.
  • McGrath, Michael.
  • McGuinness, John.
  • McHugh, Joe.
  • Moynihan, Aindrias.
  • Moynihan, Michael.
  • Murnane O'Connor, Jennifer.
  • Murphy, Catherine.
  • Naughton, Hildegarde.
  • Noonan, Malcolm.
  • O'Brien, Darragh.
  • O'Brien, Joe.
  • O'Callaghan, Cian.
  • O'Callaghan, Jim.
  • O'Connor, James.
  • O'Dea, Willie.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Gorman, Roderic.
  • O'Sullivan, Christopher.
  • O'Sullivan, Pádraig.
  • Ó Cathasaigh, Marc.
  • Ó Cuív, Éamon.
  • Rabbitte, Anne.
  • Richmond, Neale.
  • Ring, Michael.
  • Ryan, Eamon.
  • Shortall, Róisín.
  • Smith, Brendan.
  • Smyth, Niamh.
  • Smyth, Ossian.
  • Stanton, David.
  • Whitmore, Jennifer.

Níl

  • Andrews, Chris.
  • Bacik, Ivana.
  • Barry, Mick.
  • Boyd Barrett, Richard.
  • Brady, John.
  • Browne, Martin.
  • Buckley, Pat.
  • Canney, Seán.
  • Carthy, Matt.
  • Clarke, Sorca.
  • Collins, Michael.
  • Conway-Walsh, Rose.
  • Cronin, Réada.
  • Crowe, Seán.
  • Daly, Pa.
  • Doherty, Pearse.
  • Donnelly, Paul.
  • Ellis, Dessie.
  • Farrell, Mairéad.
  • Fitzmaurice, Michael.
  • Fitzpatrick, Peter.
  • Funchion, Kathleen.
  • Gould, Thomas.
  • Grealish, Noel.
  • Guirke, Johnny.
  • Healy-Rae, Danny.
  • Healy-Rae, Michael.
  • Howlin, Brendan.
  • Kenny, Gino.
  • Kenny, Martin.
  • Kerrane, Claire.
  • Lowry, Michael.
  • Mac Lochlainn, Pádraig.
  • McGrath, Mattie.
  • McNamara, Michael.
  • Mitchell, Denise.
  • Munster, Imelda.
  • Murphy, Paul.
  • Murphy, Verona.
  • Mythen, Johnny.
  • Nash, Ged.
  • Naughten, Denis.
  • Nolan, Carol.
  • O'Donoghue, Richard.
  • O'Reilly, Louise.
  • O'Rourke, Darren.
  • Ó Laoghaire, Donnchadh.
  • Ó Snodaigh, Aengus.
  • Quinlivan, Maurice.
  • Ryan, Patricia.
  • Shanahan, Matt.
  • Sherlock, Sean.
  • Smith, Bríd.
  • Smith, Duncan.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Tully, Pauline.
  • Ward, Mark.

Staon

Tellers: Tá, Deputies Jack Chambers and Brendan Griffin; Níl, Deputies Mattie McGrath and Danny Healy-Rae.
Question declared carried.
Cuireadh an Dáil ar athló ar 10.20 p.m. go dtí 9 a.m., Déardaoin, an 28 Aibreán 2022.
The Dáil adjourned at 10.20 p.m. until 9 a.m. on Thursday, 28 April 2022.
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