The Tánaiste has indicated a welfare package will be delivered in October’s Budget to tackle the rising cost of living.
Labour leader Alan Kelly has warned the Government is facing a “winter of discontent” amid soaring energy, food and rent costs.
Pensioners and those on social welfare will be worst affected by inflation hikes if the Government does not act, Leo Varadkar said, as he outlined a range of measures for next month’s budget.
Changes to tax bands, USC and PRSI are on the table, as well as an expansion of the fuel allowance.
Mr Varadkar told the Dáil: “The cost of living is rising, everyone can see that.
“We can see it in the forecourt, we can see it in the supermarkets, and we can see it when it comes to people filling their tank for the winter.
“The cost of 1,000 litres of home heating oil at this time last year was €450. It’s €750 now, up to where it was in 2019.
“We’re seeing a return to inflation. It’s something I spoke about months ago and people were dismissive of it at the time, and it is now very much a reality.
“It’s hurting families, it’s hurting consumers and it’s hurting businesses.”
Pay increases
He added: “There will need to be a welfare package in the budget, because of the fact that people on pensions on social welfare will end up worse off if there isn’t an increase this year.
“That will need to be done. We will need to do something on the fuel allowance, we’ve already committed to ring-fencing some of the proceeds from the carbon tax to increase the fuel allowance.
“We will need pay increases. Pay increases are happening across the economy and they are necessary.
“And we will need a tax package too, to make sure that those who do get a pay increase, don’t lose most of it in income tax, USC and PRSI.”
Inflation hit a three-year high in August
Speaking during Leaders’ Questions on Tuesday, Alan Kelly warned that rising inflation will impact “people’s everyday lives and living standards.”
“Inflation hit a three-year high in August of three per cent, the highest since 2008.
“And according to all economists, it’s only going in one direction,” he said.
Mr Kelly also raised concerns of electricity blackouts in the winter, due to the strain placed on the grid by data centres.
Questioning the Tánaiste @alankellylabour asked what the government are going to do to make sure families can afford to heat their homes and keep the lights on 💡
Freeze costs?
Provide more people with fuel allowance?
People need clarity ahead of winter pic.twitter.com/NuKUi7Q4P2— The Labour Party (@labour) September 21, 2021
The Tánaiste said that while energy supplies will be “tight” this winter, there will not be blackouts or brownouts.
He told the Dáil: “There is concern about it being tight this winter and more so next winter.
“Contingency plans are being put in place to avoid that.
“We are confident that even in a very cold winter… we will not see blackouts or brownouts this winter.”
Mr Varadkar did not rule out introducing maximum price orders, to cap the costs consumers can be charged by energy suppliers.
But he said such measures in the UK had left suppliers unable to meet oil and gas prices on the international market, and resulted in companies going bust.
