Conor Pope: Cost-of-living package will cover less than a quarter of price hikes this year

The decision by the Government to double the energy rebate and reduce the cost of public transport while broadening the drug repayment scheme amongst other measures will be welcomed by most consumers but is unlikely to make a significant difference to the challenges facing Irish households.

With the cost of living likely to increase for most Irish families by over €2,000 over the course of 2022 when higher utility bills, supermarket bills and motor fuel costs are totted up, measures worth significantly less than a quarter of that fall well short of what will be need to plug gaps caused by spiralling prices.

Minister for Public Expenditure Michael McGrath insisted that the measures, which will cost €505 million, will have “a positive impact” on the incomes of all households.

And he is not wrong. What he did not say is that the “positive impact” will be on the small side.

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The doubling of the long-awaited €200 energy rebate has to be looked at in the context of rising prices across all electricity and gas providers in Ireland, increases which have added anywhere between €700 and €1,300 on to the annual cost of heating and lighting homes. The fact that no-one will see that money for weeks yet is as inexplicable as it is concerning.

The 20 per cent cut in public transport – which is not being rolled out until April – means even a heavy user of public transport in the capital, someone who uses a Leap Card twice a day, five days a week between April and December will only see savings of around €120.

The 390,000 people who are claiming the fuel allowance are also set to receive an extra €125, a measure which should at least allow those on lower incomes and disproportionately impacted by price hikes a degree of comfort as the cold months drag on.

The reduction of the drug payment scheme threshold from €100 to €80 will benefit just over 70,000 recipients, albeit marginally.

The working family payment budget increase announced on Budget Day will be brought forward from June 1st to April 1st, again a baby step in the fight against the inflationary pressures hitting people hard.

Opposition criticism

Even before the measures were announced, the Opposition was condemning them as insufficient just as the Tánaiste Leo Varadkar predicted it would when he spoke about the plan in the Dáil before it was published.

Labour TD Aodhán Ó Ríordáin derided the package as “token measures” which, he said, would be “a drop in the ocean compared to what ordinary families are having to grapple with”.

Sinn Féin’s finance spokesperson Pearse Doherty said the State needed to get “money into people’s hands now” and accused the Government of failing to understand the challenges facing ordinary workers and families.

While the Government will say that, in many respects, its hands are tied with limits on what it can do, and it has repeatedly pointed out that Ireland is by no means alone in trying to combat higher living costs, that narrative was disputed by Daragh Cassidy, the spokesman for price comparison and switching website bonkers.ie.

He argued there were, in fact, “numerous ways the Government is adding to the cost of living in Ireland and putting further pressure on struggling households”.

He noted that, at 23 per cent, the Irish VAT rate was amongst the highest in the world and added that “from energy, to banking and insurance, Government charges such as stamp duty, carbon tax and VAT are adding hundreds to the cost of living in Ireland each year”.

Mr Cassidy said the Government was “happy to blame world energy markets or perhaps Brexit” and said that while it was “true that many of the reasons for the recent spike in inflation are outside of its control, there are numerous ways in which the Government adds to the cost of living here”.

He called on the Government “to look at its own charges on consumers first and foremost” adding that “many are too high and some are downright unfair”.

While those in Government circles may dispute Mr Cassidy’s analysis, it is hard to argue with his numbers.

It is even harder to imagine there will be much celebrating among the public at the latest attempt to tackle rates of inflation not seen in more than 20 years.