Dáil Éireann Debate, Thursday - 28 April 2022
38. Deputy Sorca Clarke asked the Minister for Finance if he will introduce further targeted measures to support lower and middle-income families in response to the level of inflation projected for 2022; and if he will make a statement on the matter. [21460/22]
View answerThe Government has intervened on four occasions to address increases in the cost of living, at a combined cost of approximately €2.1 billion.
Firstly, Budget 2022 contained an income tax package amounting to €520 million. On the expenditure side, a social welfare package worth €558 million was introduced, including, among other measures, a general €5 rate increase for working age and pension age recipients, and a €5 increase in the fuel allowance.
A suite of measures was then introduced in mid-February, amounting to €505 million. Measures included an energy credit of €200 to every household in the country, a once-off lump sum payment in respect of the fuel allowance, and a 20 per cent reduction in public transport fares.
In March, Government agreed to VAT-inclusive reductions in excise duty of 20 cent per litre in respect of petrol, 15 cent per litre in respect of diesel and 2 cent per litre in respect of Marked Gas Oil.
Finally, earlier this month, Government announced a further set of measures amounting to around €180 million. These measures include a reduction in the VAT rate for electricity and gas to 9 per cent, from 1 May until end-October, an additional payment in respect of the fuel allowance, and an extension of the reduction in excise duty to mid-October.
While the Government has been pro-active in limiting the fallout from the impact of higher energy and other prices, there is a limit as to what can be done. Many of the drivers of the increased cost of living are global in nature, and Government cannot insulate all from the burden of higher global prices.
Finally, it is also worth pointing out that borrowing costs are now rising, meaning that the Government's capacity to run large deficits is more constrained than during the pandemic.
