Public Expenditure and Reform | Steps being taken to curb inflation, challenge the rising cost of living, and manage inflationary tendencies
To ask the Minister for Public Expenditure and Reform the steps he will take to curb inflation in the economy thus lightening the load on the general public; and if he will make a statement on the matter.
To ask the Minister for Public Expenditure and Reform if he is satisfied that adequate opportunities remain to challenge the increase in the cost of living; and if he will make a statement on the matter.
To ask the Minister for Public Expenditure and Reform the extent, if known to which reform in the context of management of inflationary tendencies in the economy can be utilised to curb inflationary; and if he will make a statement on the matter.
To ask the Minister for Public Expenditure and Reform the degree, if any, to which the overheating of the economy can be managed through the medium of public expenditure and reform; and if he will make a statement on the matter.
To ask the Minister for Public Expenditure and Reform the extent to which he foresees the possibility of taking remedial action in the context of public expenditure and reform to reduce inflation and inflationary tendencies; and if he will make a statement on the matter.
To ask the Minister for Public Expenditure and Reform whether, within his Ministerial remit, he can see opportunities for curbing the cost-of-living increases; and if he will make a statement on the matter.
As the economy recovers from the impacts of the pandemic we are encountering new challenges from rising energy prices and supply chain issues. These are exacerbated by the war in Ukraine, which has added to inflationary pressures globally. This is not a difficulty unique to Ireland and is faced by almost every advanced economy in the world.
The Government is aware of the challenge posed to many households by the rising costs of living, in particular for those on lower incomes. While the Government cannot fully insulate all from the impact of rising prices, significant resources have been provided to protect those that may be struggling due to price pressures. Budget 2022 set out a €1.2 billion package of expenditure measures to support citizens across a range of sectors with cost of living pressures and also contained an income tax package of just over half a billion euro.
Since December 2021, over half a billion euro of additional expenditure measures have been put in place to support citizens and businesses with increased costs targeted at energy prices. This includes the Electricity Credit for all domestic account holders of €200. To provide further support towards mitigating fuel cost increases, the Department of Finance introduced temporary reductions in the excise duties charged on petrol, diesel and marked gas oil and reduced the rate of VAT on the supply of gas and electricity.
In implementing these measures, Government has sought to balance a number of considerations. In the context of increased energy costs driving inflation, measures have been targeted in this area. To ensure swift support to help lower income households experiencing immediate difficulties, it was also important that measures could be enacted in a timely manner. Measures introduced are largely temporary and avoid committing funding for future years to ensure that our public finances remain on a sustainable trajectory. It is also essential that policy avoids generating second round effects which could add to inflationary pressures.
In terms of the overall budgetary framework, my Department seeks to drive reform and value for money in the management of day-to-day spending as well as the formulation of new policies. It is also a key responsibility of every Department and Minister to manage expenditure within their respective allocations. Careful monitoring of spending against profile and consideration of efficient and effective delivery of programmes and projects is required.
The Programme for Government commits to continuing reform and improvement of the budgetary process. In this context a range of reforms have been put in place in recent years, to support this drive to deliver more efficient and effective public services. This work includes the ‘whole-of-year’ budgetary framework, the Spending Review process, Performance Budgeting and Equality Budgeting and the development of the Wellbeing Framework for Ireland.
I am currently engaged in preparations for this year’s Summer Economic Statement with my colleague the Minister for Finance. The challenging economic context is adding complexity to the formulation of our fiscal strategy for 2023. In finalising the budgetary parameters, we will seek to strike a balance between helping to mitigate cost of living pressures and ensuring sustainability of the public finances. Overall we aim to design policy to protect the most vulnerable in society while also ensuring measures do not add to inflationary pressures. The Summer Economic Statement and the Mid-Year Expenditure Report will be published in the coming weeks.
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