Dáil Éireann Debate, Tuesday - 26 July 2022
387. Deputy Mary Butler asked the Minister for Finance if he will consider the issues facing independent retailers raised in correspondence in a budgetary context (details supplied); and if he will make a statement on the matter. [40958/22]
View answerThe Government is acutely aware of the cost pressures facing households and firms, especially the increase in fuel and other energy prices. Government has acted swiftly, and frequently, to address the cost of living issue. Since Budget 2022, measures of approximately €2.4 billion have been introduced to ease the burden.
While most of these measures have been targeted at households, several of these measures will also help firms. In particular, the Government reduced the rate of VAT on electricity and gas to 9 per cent and reduced the excise levied on fuels. Government cut tax on a litre of petrol by 20 cent, on a litre of diesel by 15 cent and on a litre Marked Gas Oil by 2 cent.
However, it is important to recognise the reality that the current inflationary environment is, primarily, driven by global pressures. As such Government cannot fully ease the burden of the rising cost of living.
It is also essential that fiscal policy itself does not become part of the problem: inappropriate policy could lead to second-round effects, counterproductively adding to inflation and increasing the vulnerability of the public finances. Therefore, Government policy will focus on temporary and targeted measures, aimed at those most in need.
The Government must also strike the balance between intervening today and keeping our public finances on a positive trajectory in the future. The need for a credible fiscal strategy for rebuilding fiscal buffers takes on an increased urgency in the context of multiple challenges facing the public finances including elevated levels of public debt, rising borrowing costs and significant medium-term expenditure pressures.
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 2023 will be a ‘cost of living’ Budget, predominately focussed on helping to ease the burden of inflation. Budget 2023 will 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.
I have taken note of the suggested measures raised in correspondence but as the Deputy will appreciate, it would not be appropriate for me to speculate on policy decisions in advance of Budget Day.
