Minister for the Environment Eamon Ryan has signalled that the Government may end its cut on fuel excise duty in the coming weeks. He said in the Dáil on Thursday the Government will have to “wean” people off the cost-of-living financial supports.
The Green Party leader said the price of oil seemed relatively steady and “in those circumstances we do have to look at restoring our tax base”.
“Because the benefit of excise and VAT is that it helps provide us a stable income that allows us pay for the pay increases in the public service which we need to deliver on, allows us to provide for the social welfare increases and to go further in next October’s budget,” he said.
Mr Ryan was responding to Aontú leader Peadar Tóibín and Independent TD Mattie McGrath during Leaders’ Questions, and said cost-of-living supports would be wound down, similar to how Covid-19 emergency supports were previously.
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Taoiseach Leo Varadkar said on Wednesday the Government will indicate in the coming weeks which cost-of-living supports can be continued. He said not all of the Government’s measures, which are due to expire at the end of February, can be continued, but promised there would not be a “cliff edge”.
The reduced VAT rate for gas and electricity are due to expire at the end of February, as well as the reduced rate of excise duty for petrol, diesel and home heating oil and the ban on energy disconnections.
Mr Ryan noted that the electricity supports had been “well timed and well placed”, and that in terms of such measures “we have to wean off those, we have to do it in a balanced way, subject to what happens in the war”.
The Minister added: “The income streams that you get from a stable tax base are part of a social democratic approach to government and it’s so easy to promise you won’t have to pay for anything and we will provide for everything.
“You have a responsibility to balance your income and your expenditure, the State needs to expand. We need more services, we need more houses, we need more hospitals. We need to pay for that, and that we do by creating a sound economy.”
Mr Ryan said the Government would continue to protect the public and didn’t know what would happen this year in terms of the war in Ukraine, but would not go down the road of “populist solutions”.
“There is a responsibility on Government to get the basic economic protection of the State’s finances so you can provide the measures when you need them. We did it in Covid, we unwound the measures in a way that worked, and that’s what we will do again this spring, which we will need to do.
“Obviously we will be attentive if circumstances change, you have to keep an eye on what international prices are, on what the economy is doing, the employment, what the welfare of the people is.
“But false simple promises that you’d never reverse a single measure, that you wouldn’t do what we did in Covid, bring in big supports and then appropriately withdraw them, not on a cliff edge…but not on a never-never, where you put it off, and every local and general election say we won’t do it now because it’s politically unpopular.
“That reckless way would really endanger our people and the protection of our people, which is the thing we need to do.”