Taoiseach says there will be no “cliff edge” for householders at the end of February when subsidies on energy are due to end, and tax increases on electricity, gas and petrol pumps are planned.
Leo Varadkar also said that no decision has yet been made on whether the VAT rate on hospitality will continue at a temporary lower rate or return to a higher rate.
Varadkar, who became prime minister on December 17, said in a roundtable interview with political reporters that the cost of living issue would be one of the real challenges for his government.
He said inflation and cost of living pressures are currently affecting families very hard.
“Despite measures taken by the government, income growth, despite near-full employment, for many, perhaps even most, purchasing power fell and prices rose so much that real incomes fell. I see it doing,” he said.
In that context, he said there is no chance of a cliffhanger for householders and consumers at the end of February. He pointed out that it is unlikely.
“In my view, we cannot be on the edge of a cliff at the end of February. If nothing is done at the end of February, energy credits will run out, the TBES scheme for businesses will end, VAT on hospitality, electricity and gas will go up. “As of the end of February, I don’t think it’s a credible proposition,” he said.
He said many actions would be taken in the new year to moderate inflation and price hikes, including raising national pensions, minimum wages and social welfare payments. income tax cuts; more energy credits; Also reduce child support.
But he said it wouldn’t be enough to offset rising costs. So in the new year, certainly by the end of January or early February, the government will have to consider what they can do to help people with their living expenses in the spring. Impossible. I think it is clear that of these measures the finances will not support it.”
The current low VAT rate of 9% on hospitality also applies to accommodation and food services. However, some hotels are charging higher due to increased demand. Asked if the government could distinguish between food service in hotels and pubs and restaurants, he said: I know why people speculate about it. That’s because it was previously legally impossible to separate meal service and accommodation. However, changes to the VAT Directive have legally made it possible. But just because it’s legally possible doesn’t mean we’ll do it. This is an option you can consider as part of your mix. ”
Asked if housing could be an issue the government loses in the next election, Varadkar said he would not be fighting in the next election for the next two years.
“For the next two years, we will focus as a government on doing a good job in all three parties. I think.
“The important thing is what is doing well in Ireland two years later, the economy, the employment opportunities, the economic opportunities, the finances, etc., which should still be doing well and they are not. They are either doing well or not doing well, so they should be improving.”
Responding specifically to issues affecting young people, he cited climate change as one area where the government differs from Sinn Fein and other smaller opposition parties. Areas where we are planning, for example on climate issues, I think we are much more credible than the opposition.
“When it comes to being part of Europe and part of the world, I think we are in a position to support the European Union more than the opposition. Many of them are very hostile to European integration. “They don’t talk about it much anymore because they know it might cost them their vote.”
“There is, of course, housing. It’s a step.”
