cost of living | 

Tánaiste Leo Varadkar says ‘we don’t know how high bills will go’

The Labour Party criticised the 80c increase to the national minimum wage

Tánaiste Leo Varadkar© PA

Senan MolonyIndependent.ie

Tánaiste Leo Varadkar has admitted that the Government doesn’t know how high bills will go – or how long the economic crisis will last.

He promised however a “dynamic and evolving” response to the cost of living crisis, and listed some Coalition intentions.

He admitted however that “we don’t know how high bills will go,” as the Labour Party criticised the 80c increase to the national minimum wage, which it said would lead to a cut in living standards for the most vulnerable.

Mr Varadkar told the Dáil: “We don't know how high bills will go. And we don't know how long this will go on for.”

But he warned: “The right response isn't a blank cheque. It's a dynamic response responding to the situation as it develops.”

Mr Varadkar confirmed there would be a windfall tax in the Budget on the super-profits of energy companies and it would reflect increased revenues this year, meaning it would be backdated in that sense.

There would be increased welfare payments and increased pensions in the Budget, he said, as well as improvements to the fuel allowance, with more people benefitting.

In addition there would be a tax package, he said, to make sure that work continued to pay.

“We'll be able to reduce your taxes and the Budget will be able to increase the pension and other welfare payments,” Mr Varadkar said.

“We'll be able to take specific actions to help people with their energy bills and all of that will be ready for the package that's announced on Budget Day.”

On the windfall tax on utilities to fund energy credits for individuals and businesses, he said: “It's our intention as a Government, or at least we’re minded at this point, to introduce the windfall tax.

“We need to work out the details of that. But certainly, in principle, the Government has agreed that’s something that we're going to pursue.

“What we have to do is work out how it will apply and how it will work, and that's not straightforward.

“But as it would apply to profits made this year, then yes, it would be backdated to the beginning of the energy crisis earlier this year, because profits are taxed on an annual basis.”

Mr Varadkar pledged: “We will use the proceeds from that windfall tax to help families and businesses to reduce the cost of energy.”

Meanwhile, Mr Varadkar has promised “the biggest income tax reduction package of recent years” in the Budget, to be delivered in the next fortnight.

But it could never go as far as the coalition would want to go, he said, after being asked by Independent Sean Canney about reports that cuts to the Universal Social Charge (USC) are contemplated.

The tax package “will be significant,” Mr Varadkar said.

“The objective is to make sure that people get to keep more of their own hard-earned money.”

He said the tax package framework had still to be decided, “but it will form part of the Budget, and it will form part of the help that we're going to provide people to help them with rising costs.”

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