Cost-of-living package to be ‘final intervention' before the budget
A planned package of additional cost-of-living measures will be the final round of supports before the budget, the finance minister has said.
Michael McGrath said the steps set to be outlined by the Government in the coming weeks had to make the best possible use of public money.
He said ministers would be carefully considering what measures to introduce or extend to ensure that any action would not result in upward pressure on inflation.
A series of existing cost-of-living measures is currently due to fall away at the end of the month.
These include the energy credit scheme for households, a reduced 9% VAT rate on hospitality, electricity and gas; and the Temporary Business Energy Support Scheme (TBES). Excise is also due to go up on petrol and diesel.
The Government has said it wants to avoid a “cliff edge” scenario and has signalled an intent to extend some measures and potentially introduce other mitigations.
Mr McGrath commented on the issue as he attended the Economic and Financial Affairs Council in Brussels on Tuesday.
“It's important that whatever we do is affordable, that we manage taxpayers' money well, that we make decisions to get the best possible result from the use of public money, and that whatever decisions we make in the next week or so represent the final intervention in advance of the next budget in the autumn,” he told reporters.
“I think it's important that we manage the resources of the country well, and we do so in a carefully considered and structured manner and so this is an important set of decisions that we have to make.
“We do want to see inflation continue to fall. We are making progress in that regard.
“We acknowledge that there are pressures on households and indeed on businesses and Minister Donohue (Public Expenditure Minister Paschal Donohoe) and I had a very good engagement last evening with representatives from the tourism and hospitality sector, representing all parts of the country just to hear their perspective on their industry on the tax decision that we have to make, but also to get feedback from them on the Business Energy Support Scheme. So it was particularly helpful.”
Asked if the temporary 9% VAT rate for the hospitality and tourism sector would be extended, Mr McGrath added: “That's a decision that has yet to be made. So the decision that was made last year in the budget was that would end at the end of February, along with a range of other measures.
“So we have a set of decisions including other taxation items, VAT on the gas and electricity, household bills, also excise reductions on petrol and diesel and the Business Energy Support Scheme.
“And there may be other proposals that government will wish to consider.
“So we have to look at it in the round about what the overall cost of the package is to make sure that it is affordable for the country, that it represents the best and most efficient use of taxpayers' money and then represents the final intervention before the next budget.”