HOUSEHOLDS CAN EXPECT measures to support them with the cost of childcare, healthcare, education and transport in the upcoming Budget, the Finance Minister has said.
He said this will be in addition to an income tax package.
October’s Budget will be the first from a Fianna Fáil Finance Minister in over a decade.
Speaking to reporters this morning at the Fianna Fáil think-in in Tipperary, Michael McGrath said this year’s Budget will be one focused on the cost of living.
“There will be a set of temporary one off measures to complement what is already a large Budget package of almost €6.5 billion but we need to wait another few weeks before we make those final decisions,” the Minister said.
“It will be a Budget where we focus resources on cost of living, on helping households to meet the bills that are unavoidable in their day-to-day lives.
“In recent years, we’ve done a lot of work to try and press down costs for families. We will aim to do more in the forthcoming Budget and then obviously there will be an income tax package as well,” McGrath said.
He did caution however that the Government is mindful not to “add fuel to the fire” in terms of inflation.
“There are significant capacity constraints. We’re seeing an economy now where employment is essentially at or beyond full employment levels at this point in time and very significant labour constraints across a whole range of different sectors,” McGrath said.
Back in June, the Irish Fiscal Advisory Council (IFAC) urged the Government to stick to its spending rule in the Budget.
The watchdog warned that doing otherwise and spending more would risk “repeating the mistakes of the 2000s” and could further fuel inflation.
McGrath said today that he agrees with the “broad thrust” of advice received by the Advisory Council and that he believes the Government has gotten the balance right in terms of tackling inflation and offering targetted cost of living supports for people.
McGrath signalled today that Government is considering supports for motorists in the form of the excise charged on petrol and diesel.
The price of petrol and diesel rose this month following the September 1 increase in excise duty, with the Government set to further increase it on October 31.
This would return it to its original rate following last year’s cut which was implemented to support people with the cost of living.
Across the country, a litre of petrol is currently hovering around the €1.80 mark.
McGrath said today that he is “very concious of where prices are at this point” and that the Government will consider its planned increase of the excise duty “in the context of the Budget”.
“At the moment, the legal position is that it goes ahead at the end of October, but we have flagged that we will consider that issue again, in the Budget,” McGrath said.
“That’s the appropriate time to make a decision and will be well ahead of the end of October date, which is currently pencilled in,” he added.
Elsewhere, the Minister also said that the Government will do “the very best it can” on support with energy bills.
“The energy credits were very effective. We rolled out four in total, since we saw inflation increase significantly, but every energy credit is about €400 million. So these are not small decisions. These are very significant, costly decisions. We recognise the value of them for households and we will do the very best we can,” McGrath said.
Last week, SSE Airtricity and Electric Ireland both announced price cuts of around 10% for consumers effective from November 1.
Electric Ireland raised prices three times last year, with the most recent being in October when residential electricity bills were increased by 26.7% and gas bills by 37.5%.
McGrath was asked by The Journal today if he believes there is a long way yet to go in terms of getting value back for customers.
He said the reductions are “very welcome” but that they are from an elevated level.
He added that he finds it “difficult to understand” why the companies are waiting until November 1 to implement the price cut and that he does not expect any further price cuts to be announced in the interim.
McGrath encouraged households to look into switching providers once they are out of contract in order to try and make further savings.
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