Minister for Public Expenditure Paschal Donohoe has given his strongest indication yet that the continuation of targeted and universal cost of living supports will be sanctioned by the Government.
Speaking to reporters in Dublin on Wednesday, Mr Donohoe said the high level of inflation experienced last year “should now be behind us” but that “inflation will still be high for this year and it will still have an effect on living standards”.
The leaders of the three Coalition parties - Taoiseach Leo Varadkar, Tánaiste Micheál Martin and Eamon Ryan of the Green Party - are to meet Mr Donohoe and Minister for Finance Michael McGrath on Thursday to determine the future of financial supports for households and businesses ahead of a Cabinet meeting next Tuesday.
“We will help, we know help is needed,” Mr Donohoe said. However, he cautioned that “this help ultimately does need to be affordable as well”.
The Government announced universal energy credits amounting to €600 per household in Budget 2023. The last €200 tranche of this is due to be transferred on to utility bills in March. While wholesale energy prices have dropped, this has yet to translate into a reduction in household bills, leading to calls for an additional €200 credit to be applied in May.
“I am really aware of the challenges so many families, so many citizens are facing at the moment. While inflation is coming down in 2023 it is still at a level that it is having a real impact on living standards particularly the living standards of our most vulnerable,” he said, adding that the Coalition would have to decide on appropriate future supports for households.
The Minister said he could “see some positive signs regarding inflation beginning to change, regarding growth holding up” but that for many prices were still high and the cost of living was unaffordable.
“What universal measures bring are the ability to help everybody, what tailored measures bring is the ability to help some more, but they each have benefits and drawbacks and the Government will in the next few days make your decision on that.”
[ From electricity credits to child benefit: What cost-of-living measures will be renewed? ]
However, he said the supports could not continue indefinitely.“We put in place in October, November and December of last year a massive amount of support for householders and businesses because it was needed and because we needed to support our country at a time when energy prices were so high.
“We will not be able to maintain that level of support across an entire year. That will ultimately become unaffordable and while we are grappling with risks that are beyond our control, such as the rising price of energy, we don’t want to create risks of our own here in Ireland if we end up putting in place measures that are ultimately unaffordable or if we add to our inflationary challenge by decisions we make at home.”
Meanwhile, Taoiseach Leo Varadkar told the Dáil on Wednesday there will be no requirement for a “mini budget” between now and the next Budget.
Mr Varadkar said Ministers will meet this week with a view to making a decision at Cabinet next Tuesday in relation to the cost of living financial supports.
“We won’t be having a mini budget,” Mr Varadkar told the Dáil during Leaders’ Questions. “That’s not necessary.”