Taoiseach Micheál Martin has signalled that there will be increases in social welfare payments along with tax reductions in the budget this autumn as he faced stinging Sinn Féin criticism over the planned end to cost-of-living rises.
Mr Martin staunchly defended the Government’s approach and said no administration “across the 27 member states of the EU, has provided as much as this Government, the previous Government did in terms of cost of living”.
He was responding to Sinn Féin leader Mary Lou McDonald who hit out at the Government’s decision to rule out a specific cost of living package in the budget.
Mr Martin said that in the next budget they would “do everything we can to make sure that we can reduce pressures on families and on children” through social protection measures and taxation.
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During Leaders’ Questions in the Dáil, Ms McDonald claimed that “at the same time you rule out help for ordinary people you had no problem whatsoever delivering big pay hikes for your raft of Junior and Super Junior Ministers”.
The Dublin Central TD pointed to a €1 increase in the price of a pound of butter, a 29c rise for two litres of milk, 70c for cheddar cheese and a doubling in the price of a bag of potatoes. “Last year rent went up €100 a month. People fork out €2,000 in rent” and motor insurance rose by more than double the EU average.
Ms McDonald pointed to letters she had received including one from Amy who said “the price gouging is unreal” with a weekly shop for her family of five of €260 and an electricity bill of €460.
“David says ‘my car insurance just shot up by €200 – no crash, no claim, no change, just a random slap in the face because the company feels like it.’ Fiona told us nine bloody euro for a bottle of shampoo that used to cost €4.50.”
Ms McDonald said: “You cannot leave working people and families high and dry. Bring forward cost of living supports.”
But disagreeing “fundamentally”, the Taoiseach said at peak inflation “we reached a multi-decade high of 10 per cent. It did have significant impact” and resulted in significant fiscal supports – tax relief, the free book schemes, public transport supports and the expanded free hot meals scheme.
He said reductions in last year’s budget are taking effect this year with a €4.2 billion 2025 cost of living package including direct tax credits increases, reduced VAT rate for gas and electricity, the extension of mortgage interest relief, double child benefit payments and electricity credits.
Inflation was 8.1 per cent in 2022, 5.2 per cent in 2023 and the latest data put it at about 2 per cent in April. “That’s the target rate of inflation used by the European Central Bank, but notwithstanding the easing of the rate of inflation, the price level remains elevated.
“And we’re very, very conscious of that. Our agenda and objective in the budget, when it comes in the autumn will be again to provide within the social protection payment programme and in terms of taxation, to do what we can to alleviate the pressures on people.”
