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Varadkar 'not ruling out' new cost-of-living measures before Budget

As things stand, the Tánaiste said the plan is still to wait until budget day in October.

LAST UPDATE | 16 Jun 2022

TÁNAISTE LEO VARADKAR has said he is not ruling out new Government measures to address the cost of living crisis ahead of October’s Budget.

Speaking to reporters in Dublin, Varadkar indicated tax cuts and increases in social welfare and a pension hike will form part of the measures in the forthcoming budget. 

His comments come as the latest ESRI report finds households in energy poverty in Ireland has risen to the highest rate ever recorded.

The report, published today, found that recent energy inflation has increased the estimated number of households in energy poverty to 29%. 

The previous highest recorded rate was in 1994 and 1995, when 23% of households were in energy poverty.

Speaking in Cork this afternoon, the Taoiseach said welcomed the report, stating that it “illustrates the importance of not doing something every single month”.

He said the ESRI states that indirect tax reductions on fuel “is not the most effective with target resources”.

‘Country not on its knees’

When asked about bringing measures forward, he said: 

“The budget is the most comprehensive way to deal with this.”

“We want it to have impact on people in this calendar year,” he added. 

“There’s a whole range of measures that we have to examine, working with others, in terms of prioritising the best way to take the pressure off people,” said Martin.

“The country is not on its knees,” said the Taoiseach, stating that the balanced commentary is needed. 

Varadkar said the report is “very stark” but not surprising, stating that the Government is “very much aware” that people are “feeling the pinch and some families are really struggling”. 

The unveiling of new cost-of-living measures “as things stand” is still planned for budget day in October. 

However, he added: “I’m not ruling out doing things in the interim, but certainly at this stage what we are working towards is another package of measures to help people with the cost of living and that will be on Budget Day, which is just over three months away.”

Many of the budget measures announced on budget day only kick in in January, but given the urgent need for action, the Tánaiste confirmed today that the Government is looking at what measures could be implemented right away.

The Government has gone “as low as it can go” on excise on petrol and diesel, Varadkar said, stating that he would like to see further reductions in public transport fares.  

Despite calls from Fine Gael Senator Tim Lombard for an abolition of the motor tax in this year’s budget, Varadkar said there are no plans to abolish the tax. “It is not a measure under consideration,” he said.  

Helping working families and middle-income families is also something Varadkar said he wants done in the budget this year. 

Pressure from within Fine Gael 

The Fine Gael leader came under pressure at last night’s Fine Gael parliamentary party meeting last night, where there were calls from TDs for the Government to take action on fuel costs prior to October’s Budget. 

With fears that petrol and diesel could go above 2.50 per litre soon, pressure is now ramping up within Government parties to move more quickly to address the rising cost-of-living.

Backbenchers Brendan Griffin and Bernard Dukan were among those to call for further action by the Government to reduce fuel prices before the Budget later this year.

Senators Regina Doherty also called for Government to act sooner rather than later on a number of issues. 

Griffin raised the issue of further petrol and diesel price reductions with Tánaiste Leo Varadkar at the meeting.

He also pushed Donohoe on the same matter in the Dáil yesterday.

He called for further downward adjustment to fuel taxes as prices at the pumps soar. While the Taoiseach and Tánaiste said it is not good to chase inflation, Griffin said financial resolutions like this should be the new normal in a rapidly evolving situation. 

Griffin said fuel is up at €2.2o at some forecourts.

“Unfortunately, the prices have crept up again. And I think there’s nothing wrong with Government adjusting and adapting as things evolve. And I’m asking, would you bring forward the financial resolutions between here and the summer recess to try to help hard pressed motorists who are really feeling it at the pumps at the moment. It’s very, very expensive for people to get from A to B,” he said.

Donohoe said that the reduction in excise already rolled out by Government is among the biggest excise reductions in place across Europe.

He said his focus remains on bringing in more supports in the Budget, as it is the right point at which to do this. However, he said he would take the deputy’s views on board.

He repeated his points at the meeting last night, and was backed up by a number of other TDs who said the lack of access to public transport in rural Ireland means fare reductions are no good to them as they are reliant on petrol and diesel cars to get them around.

While there were calls for fuel cost reductions, Lombard called for motor tax to be abolished. He also argued that the reduction in public transport fares is of no help to the people living in rural Ireland, such as West Cork.

Varadkar told party members that he would discuss the issues with Donohoe, however, he indicated that the Government has to contend with the EU directive in terms of what more can be done on VAT on gas and electricity.

The calls for more action to be taken to help motorists came as Minister Helen McEntee, Minister Simon Harris and Minister of State Martin Heydon got a motion approved by the party members for their ‘Fairer Fares Campaign’ which is calling for an extension to the Short Hop Zone for public transport out to 55 km distance from Dublin City Centre.

This takes in the constituency counties of Meath, Wicklow and Kildare, which includes some of the busiest commuter towns of Gormanston, Laytown, Drogheda, Enfield, Newbridge and Wicklow Town.

The ministers said that this move would encourage the public to use public transport more frequently on a daily basis. Party members said the principle should be extended to other areas of the country where commuter rail services exist.

In relation to recent public transport reductions, the meeting heard that similar measures should be introduced for those who rely on private bus operators in rural areas if that’s possible.

Sources at the meeting said that message that more needed to be done on the cost-of-living was made clear, stating that the finance minister is now under pressure to do something more before the summer break. 

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