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Government failing to capitalise on its cost of living package

The coalition struggles to get its message straight even when it is good news

Whatever the Government did in its effort to address the cost of living crisis, it was never going to be enough. That goes with the territory, and governments are well able to argue the logic of the policies they put forward even if this administration has on occasion been caught unusually flat-footed on the impact of rising prices and how it might respond.

It is probably most vulnerable to criticism that it was somewhat slow to act. While inflation has risen further and faster than even the European Central Bank foresaw, it was clear from early October that winter fuel bills were going to be present real problems for those on tight budgets.

Countries across the EU and beyond have responded with a range of emergency measures. Ireland was certainly not leading the way. Interestingly, given the Government's mantra that European Union rules make it extremely difficult, if not impossible to do anything on VAT, a number of countries has done precisely that.

Be that as it may, the package that has emerged is worth around €500 million. That is not peanuts even if there is a valid debate over whether that money should have been more carefully targeted on those whose household budgets are more vulnerable to the surge in inflation.


It amounts to 10 per cent of the entire package of increased spending and net tax cuts announced in Budget 2022 – a budget that was already supposed to be providing for the impact of the return of inflation.

The Government, in its presentation of the measures, said they amounted to a 50 per cent increase in the package of cost-of-living measures announced over recent months. The lion’s share is accounted for by cash handouts to all electricity customers to defray the cost of their winter bills – around three-quarters of the total sum. It’s a blunt instrument but there is some logic to it.

The big fear is that the economy descends into an inflationary spiral, one which leave most people worse off. One-off payments – such as the €200 payments against power bills – avoid perpetuating that risk.

The Government’s biggest problem – not helped by some determined political point-scoring from one of the coalition partners – is that it cannot seem to get that message across clearly.