Sinn Féin’s finance spokesperson Pearse Doherty has called on the Government to introduce an emergency budget to address the cost of living crisis.
An Economic and Social Research Institute (ESRI) report on energy poverty and deprivation that showed one in three households in the country were in energy poverty “screams that the Government needs to do more” he told RTÉ radio’s Morning Ireland.
Dr Barra Roantree, co-author of the ESRI report, told the same programme that rural households, people on lower incomes, as well as older people had been most adversely affected by the rising cost of energy as they spend a greater proportion of their income on fuel.
Inflation
The Government could not compensate everyone, to do that would cost €4 billion a year and could risk further rises in inflation, he added.
Mr Doherty described the ESRI report as helpful as it highlighted the impact of increased energy costs on “ordinary people” and the real pressures they were experiencing.
He called for lump sum payments to be made to people as had happened in other jurisdictions. There also needed to be an increase in social welfare rates and reduced excise for petrol and diesel, he said.
However, Dr Roantree said that cutting excise duty on fuel, VAT on electricity and gas were not well targeted. “The reason for that is simply that higher income households have been less affected, spend more in absolute terms.
“So therefore, by cutting indirect taxes, they're getting more of the gain. In fact, we estimate that in terms of, say, if you imagine having a pot of money to spend on compensating households, if you were to do it through things like indirect taxes, actually more than half of that gain goes towards the highest income households who again have been less affected than lower income households.”
This crisis is going to get worse.
Mr Doherty called for assistance to be given to people now. Waiting until the Budget in October and for measures to be introduced in January would be too late for many, he warned. “This crisis is going to get worse.”
An emergency budget of €1.1 billion was necessary, he said. The Irish Fiscal Advisory Council, ESRI and the Central Bank had all said there was scope for the introduction of targeted measures, he said.
Dr Roantree said that the Government could also look at making changes to PRSI or increasing the PAYE income credit to help people in the middle-income bracket.
Mr Doherty also called for “runaway rents” to be tackled as they were becoming more and more unaffordable for people. It was important to put money back in people’s pockets.
“This well affordable. It is a must.”
