Bernard Durkan
Question:87. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the measures he proposes to take, if any, to combat inflation; and if he will make a statement on the matter. [11314/22]
View answerTuesday, 1 March 2022
Questions (87, 113)
Bernard Durkan
Question:113. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which he and his Department can utilise reform as a means of combatting inflation; and if he will make a statement on the matter. [11315/22]
View answerWritten answers
I propose to take Questions Nos. 87 and 113 together.
The Government is aware of the challenge posed to households, particularly those on lower incomes, by the increase in consumer prices in recent months, especially the increase in fuel and other energy prices. In recognition of this, a suite of measures was announced on February 10th to mitigate the impact of recent inflation on citizens and assist with rising costs of living.
This package will build on the measures announced as part of Budget 2022, which included a range of measures to support citizens with the rising cost of living, including social protection rate increases, increases in tax bands and other affordability measures. Later last year, Government acted quickly to respond to the increase in energy costs by committing to an energy credit of €100 for all domestic account holders. With this earlier energy credit commitment, the package of measures announced post-Budget 2022 has a value of some half a billion euro. The package comprises:
A lump sum payment of €125 to recipients of Fuel Allowance to be paid in March;
- An increase in the Energy Credit payment announced in December from €100 exclusive of VAT to €200 inclusive of VAT;
- Applying the Budget 2022 increase of €10 in the weekly income threshold for the Working Family Payment from April rather than June;
- Further reducing the Drugs Payment Scheme threshold to €80 per month, having been reduced to €100 per month in Budget 2022;
- Reducing the maximum annual School Transport charge to €150 per family at primary level and €500 per family at post-primary level for the next academic year;
- A 20% reduction in PSO Public Transport fares from May until the end of 2022.
While this will not combat the causes of the inflation we are currently seeing, which is mainly due to external factors such as higher oil prices and pandemic-induced supply chain bottlenecks in key regions along with the rapid rebound in the domestic economy, it will provide timely support to all households who may be experiencing difficulties as a result of rising prices. The package sought to balance targeting the main underlying problem of higher energy prices with the need to operate with the fiscal framework set out in the Summer Economic Statement and so has been designed to specifically target energy costs, while using the social welfare system to target additional support to those who are in receipt of the fuel allowance.
A range of budgetary reforms have been put in place in recent years, to drive spending efficiency and effectiveness and the Programme for Government commits to continuing reform and improvement of the budgetary process. This work includes the ‘whole-of-year’ budgetary framework, the Spending Review process, Performance Budgeting and Equality Budgeting and the development of the Wellbeing Framework for Ireland.
Given the significant level of resources to be provided under the medium term expenditure strategy, an ongoing and enhanced focus on value for money is required, looking at the quality of expenditure and what it delivers for citizens. It is in this context that all expenditure decisions will be taken, as part of the Budget 2023 process, to examine any further measures that may be required to address cost of living issues.