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Inflation Rate

Dáil Éireann Debate, Thursday - 16 June 2022

Thursday, 16 June 2022

Ceisteanna (81)

Richard Boyd Barrett

Ceist:

81. Deputy Richard Boyd Barrett asked the Minister for Finance the measures that he is planning to put in place to address inflation and wealth inequality; and if he will make a statement on the matter. [31322/22]

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Freagraí scríofa

While I am acutely aware of wealth inequality, it is important to stress that housing assets are the main source of divergence in wealth across the Irish population.

It is also important to acknowledge that a number of wealth taxes are in place, including Capital Gains Tax, Capital Acquisitions Tax and Local Property Tax. The Revenue Commissioners estimate that these taxes raised some €2.8 billion last year.

From a broader perspective, the Deputy will be aware that Ireland has one of the most progressive systems of taxes and social transfers of any EU or OECD country. Our tax system is strongly progressive, and when combined with our welfare system, contributes substantially to the redistribution of income and to the reduction of inequality.

In relation to the high rate of inflation, the Government is keenly aware of the challenges of rising price pressures. The Government has responded in a timely and forceful manner to address the impact of higher prices, with a suite of measures to help to ease the impact on businesses and households, particularly those on low incomes. On a cumulative basis, €2.4 billion has been announced in cost of living measures to date.

Many of these measures were strongly progressive, with the gains more keenly felt by those in the lower income deciles.

However, it is important to bear in mind that the causes of current price pressures are not within our control. Whilst the Government will continue to work to minimise the fall-out on those who are least-equipped to respond, resources are limited and it is not possible to insulate households and businesses from the entire impact of the current shock.

Furthermore, in calibrating how we respond to the current challenges, it is important that we strike the right balance and ensure policy does not inadvertently add further to inflationary pressures. The Government has to balance the appropriate response to the increased cost of living in Ireland with the unprecedented level of global economic uncertainty and macro-economic risk.

As the Deputy will be aware, the Summer Economic Statement will be published in the coming weeks and will set out the broad economic and fiscal parameters for Budget 2023 , taking into account the overall macro-fiscal position.

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