Plans to introduce a windfall tax on energy companies are “very well advanced” and are “a matter of weeks away”, Taoiseach Leo Varadkar has said.
Mr Varadkar said the tax will be retrospective with companies having to pay it on profits they made last year and that it will bring in “hundreds of millions of euro” for the State.
The Fine Gael leader said he believes gas and electricity prices will start to fall in a “few months’ time, first for businesses and then subsequent to that, for householders”.
The Taoiseach was responding to Social Democrats co-leader Róisín Shortall during Leaders’ Questions in the Dáil on Tuesday, who said energy prices have tripled since 2021 with costs for consumers now “a staggering €4,300 per year”.
“Everyone getting their gas and electricity bills in recent weeks would have been shocked by the amounts,” Ms Shortall said.
“As consumers suffer, energy companies are profiteering from this crisis and making what can only be described as obscene profits.”
Ms Shortall said the “relentless” price increases could not continue while the toll they were taking on both families and businesses were “disastrous”.
The Social Democrats co-leader called for a targeted energy price cap as well as a windfall tax to ensure companies cannot price gauge when the cap is in place.
“Energy Minister Eamon Ryan first promised a windfall tax back in August and the EU signed off on one in September,” she said.
“Many other EU countries, Germany and Spain to name just two, have already introduced a windfall tax. Why is this Government dithering?”
In response, Mr Varadkar said some energy companies would be making “very large profits this year”, in many cases “profits they never even thought themselves they were going to make”.
“That ranges from the Corrib gas field to oil and petrol refineries, to State owned companies like ESB for example,” he said.
“That isn’t fair, and that isn’t right, and it’s not okay and we are going to act on it. When it comes to state companies making very large profits, we can use the dividend system to take a special dividend and use that money to help families and businesses with the cost of living.
“When it comes to private companies, we have the windfall tax. Minister Ryan updated Cabinet on that today, plans for a windfall tax are advanced so there will be a windfall tax on the energy companies and there will also be different forms, two forms…The plans are very well advanced, and we will have hundreds of millions of euros coming in from the windfall tax on energy companies and that is money that we didn’t factor into the budget for this year, so it is additional funds that we can use to help defray the cost of living.”
The Taoiseach added that the windfall tax was “a matter of weeks away” and that the Government wasn’t “late in the day” introducing it.
“Companies pay their tax now on the profits they made last year and last year only ended six or eight weeks ago,” he said.
“We’ll have that tax in place in the near future and it will be retrospective in the sense that the companies will pay it on the profits they made last year, and they will also pay it again on the profits that they make this year.
“So we’ll have two years of revenue coming in from the windfall tax, and we will be able to use it to help businesses and help households with the high cost of energy and the high cost of living.
“It will be a few months before we start seeing those gas and electricity prices fall but I do believe we will start seeing them fall in a few months time, first for businesses and then subsequent to that, for householders.”
The ban on evictions, which is due to expire at the end of next month, should be extended until the end of the year, Sinn Féin leader Mary Lou McDonald has said.
The party has also called for legislation to ban rent increases for three years as well as a month’s rent back into tenants’ pockets in the form of a refundable tax credit.
Speaking during Leaders’ Questions in the Dáil on Tuesday, Ms McDonald said the situation in the rental sector was “now beyond crisis mode”
The Dublin Central TD pointed to the most recent report from Daft, which she said was “a nightmare read for workers and families caught in the private rental trap”, that found rents in Ireland jumped 13.7 per cent on average last year.
All counties, bar one, saw double digit increases, some of which were “frightening”, Ms McDonald said.
The Sinn Féin leader said the average rent now stands at a “staggering” €1,733 per month while in Dublin it is “even worse” with tenants paying on average €2,293 per month.
Ms McDonald said these were “extortionate” sums of money and that apartment blocks were being built where the asking rents would be “even higher again”.
She also held up images of private rental advertisements, including one for a bunk bed in a rooms with three other people for €625 per month and another for “a room the size of a parking space where you pull your bed down” for €1,880 per month.
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“The rent crisis has had a devastating impact on the lives of an entire generation,” Ms McDonald said. “People in their late 30s and 40s stuck in house shares because they can’t afford to rent a place of their own.
“Young people unable to move out from their parents’ homes because they haven’t a chance of renting, so many financially crippled by years of paying these rack rents faced with the choice of moving back in with Mam or Dad or emigrating for a shot at a better life in another country.
“At the sharpest edge of this crisis, thousands of families face losing the roof over their heads when the eviction ban expires in April and this is all happening because Government housing policy is failing.
“Week after week you come in here, Fianna Fáil and Fine Gael, and gaslight Ireland’s renters by telling them that your housing plan is working, but how you can make that claim to people who handed over the lion’s share of their income in rent and who then see the rest of their income gobbled up by sky high energy bills, childcare fees, grocery bills, is beyond me.”
In response, Taoiseach Leo Varadkar said rents in Ireland were very high and a lot of people were struggling to pay their rent.
Mr Varadkar said the rental crisis hits hardest on those moving out of home for the first time, people returning to Ireland as well as those who are new to the country.
The Fine Gael leader said the Government was acting and that 1,700 applications had been made for the €500 rent tax credit. Mr Varadkar also pointed to rent pressure zones, cost rental housing as well as the Help to Buy Scheme.
“We’re helping people to buy and that in my mind is the most significant thing because we want people to become the owners of their own homes,” he added.
“About 70 per cent of people in Ireland do own their own home. I’d like to see that figure much higher and it’s certainly nowhere near that figure for younger people, it’s probably around half that.”
