Taoiseach rules out ‘mini-budget’ to respond to rising cost of living

Taoiseach Micheál Martin has ruled out a “mini-budget” to respond to the rising cost of living, but signalled that lower-income families will be a focus of new measures to relieve the financial pressure on households.

Mr Martin declined to offer specifics on the Government’s plans to help people counter high inflation and energy costs.

However, he did say the Government believes there will be scope within the State’s finances to help people with lower incomes in particular in relation to this.

A Cabinet subcommittee is to meet next Thursday to discuss a series of ideas to help with the cost of living.

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The Ministers for Finance, Public Expenditure and Social Protection have been tasked with coming up with suggestions for measures that can be brought in.

Among the options that have been floated are an increase on the €100 electricity credit and cuts to hospital and prescription charges.

The waiving of Leaving and Junior Certificate fees already announced has been cited by Government figures as part of efforts to help families, as have proposals to reduce college fees.

Another idea is an exemption to current bonus rules for workers so that up to €1,000 can be given by employers to individual workers tax-free, rather than the current limit of €500.

A longer fuel allowance season may also be considered.

Ministers may also look at changes and cuts to VAT on energy charges, food stuffs and road charges.

While many potential measures were mooted on Thursday, senior Government figures have since sought to reign in expectations on the scale of the support package that will be on offer.

Global issues

At a press conference on Friday Mr Martin said he would not speculate on the measures that could be introduced, but said: “We are conscious of the cost-of-living issue.”

He said inflation – running at 5 per cent – is down since December but is still at very high levels and this has been the case for a long time, mainly due to global issues “outside of our control”.

He said there were targeted measures to help people in October’s budget and that “there won’t be a mini-budget or anything like that but we are looking at further ways that we could perhaps ease the situation for people”.

Mr Martin did not get into specifics on when any such announcement would be made but said it would come “hopefully in the next number of weeks”.

He said the Government does not want to do anything that makes inflation worse and needs to be “intelligent in terms of how we work our way through this”.

With the existing €100 electricity credit set to cost more than €200 million, Mr Martin was asked where funding for other measures would come from.

The Taoiseach said the fiscal situation is improving all of the time and pointed to tax returns from January that saw “quite high” increases in VAT and income tax receipts.

“We have targets and I think we’ll reach our fiscal target by the end of the year but within that we believe there will be some flexibilities to enable us to help people, particularly those on lower incomes who are more affected by the inflationary cycle.”