Dáil Éireann Debate, Thursday - 15 September 2022
157. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the degree to which enterprise and trade in general is challenged by numerous price increases by various suppliers of goods and services; if such issues can in any way be alleviated to ensure the safeguarding of small and medium enterprises; and if he will make a statement on the matter. [45382/22]
View answerThe top competitiveness challenge facing enterprise today is the high inflation environment and rising input prices. Many small and medium businesses around the country are seeing their margins squeezed by the rising costs of doing business, and in particular the significant increases in energy costs. The Wholesale Price Index for energy products rose by almost 78 per cent in the year to July 2022, and this spike is becoming apparent in the costs of energy intensive businesses. This is not unique to Ireland and is an issue facing all major economies around the world.
Ireland imports over 70 per cent of our energy needs and the Government cannot fully insulate businesses from price developments in international energy markets that are mostly outside of our control. The Government is very aware of the economic challenge of escalating energy prices and has put in place measures to assist businesses, including small and medium enterprises. Measures have included a reduction in the rate of VAT on gas and electricity from 13.5 per cent to 9 per cent until the 31st of October; and a temporary reduction in the excise duties charged, by 20 cent per litre of petrol, 15 cent per litre of diesel, and 2 cent in the excise duty charged on marked gas oil. Measures are also being actively explored at a European level to tackle the costs of energy to business, while further actions are being considered for introduction under Budget 2023.
In the short term, we are constrained in how quickly we can shift our energy consumption patterns. Government has introduced a suite of measures which are aimed improving energy efficiency of firms and reducing reliance on fossil fuels such as the €25 million in funding under the Climate Planning Fund for Business, and €30 million under the Enterprise Emissions Reduction Investment Fund as well as a range of grants available from the Sustainable Energy Authority of Ireland.
In the longer term, this energy shock will require a deep structural adjustment, which will have to take place at the same time as the green and digital transitions.
The Government will keep the energy situation under close and active review and will continue to examine what measures are possible to manage the impact of rising prices for enterprises.
