Interest money

“This budget will put money back in your pockets”

I took the time to think about Fine Gael in Kilkenny to meet families and businesses in the constituency. The number one issue on the doorstep of Carlow town and among businesses in Kilkenny was the cost of living and the cost of doing business, with people worried about paying their bills and rising energy prices and electricity.

They all wanted to know that the government was going to help. That’s exactly what we’re going to do: cushion the shock of the rising cost of living.

When Russian President Vladimir Putin sent his tanks into his peaceful neighbor Ukraine, he unleashed a series of crises with global consequences.

Putin’s war has driven up energy prices, affected food supplies in Europe and around the world, and the cost of living has skyrocketed in countries as far afield as Ireland and Australia .

This senseless war was unleashed while the world was still grappling with the aftermath of the pandemic, which itself had a huge impact on global trade.

People are worried about soaring prices.

As winter approaches, we know we need to protect households from the worst effects of the energy crisis and ensure businesses can retain their staff.

This government and its predecessor, which I had the privilege of leading, have been able to respond to the pandemic in an unprecedented way. The focus is now on the cost of living and the energy crisis.

Like everyone else, I was horrified by the rise in energy prices and the cost of everyday goods caused by Putin’s war. We know people work hard and rising costs are making it more and more expensive to do the weekly shopping, fill up the car and pay the bills.

Everyone feels the pressure and some people are struggling to make ends meet and have to make very difficult decisions.

That’s why Budget 2023 will put more money back in your pocket and lower the cost of living for you and your family.

Next Tuesday, Finance Minister Paschal Donohoe and Public Spending Minister Michael McGrath will unveil a budget focused on helping individuals and businesses with the cost of living. Measure after measure, people will have more money in their pockets.

If we really want to do things differently than before, then Budget 2023 must do three things:

  • We must help households manage their energy bills and the cost of living in this difficult time, and we must prevent businesses from laying off staff due to high energy costs;
  • We also need to have a good tax system, to make sure middle-income people keep more of their hard-earned money. Too many people see any additional income gobbled up in additional income taxes. We need to make sure that if you get a raise this year, you don’t lose half of it in taxes. More income means people have more resources to meet the rising cost of living;
  • We must help the most vulnerable people in our society. There must be a safety net for pensioners, disabled people and carers. In the past, we have done this in various ways; by taking €200 off your energy bills or paying extra fuel allowances.

As a doctor, I understand the need to address the underlying causes of a problem, as well as the symptoms. So while we help the most affected households and businesses, we will also take a long-term view.

Even before the current cost of living crisis, some costs were very high in Ireland and out of step with other similar countries. Thus, we will also strive to reduce some of the high costs that exist in our society, in areas that government can influence, such as childcare, health, education and public transport.

Leo Varadkar and Justice Minister Helen McEntee out for a walk in Kilkenny.  Photo by Dylan Vaughan.
Leo Varadkar and Justice Minister Helen McEntee out for a walk in Kilkenny. Photo by Dylan Vaughan.

We need to reform our energy market because the way we currently price electricity simply does not work. We need to invest more in renewable energy and in new ways of storing energy, such as batteries and interconnects, to help stabilize energy prices.

And we also need to focus on energy security, to make sure we’re less dependent on imported fuels from countries that don’t share our values.

We have set up the Shannon Estuary Economic Task Force, to examine the region’s potential for economic development and job creation in areas such as wind, hydrogen, storage natural gas and solar energy. I believe that the Shannon region could become a powerhouse for the production of wind, hydrogen and solar energy.

A few months ago, I traveled to Rotterdam to see first-hand the research that is being done there on the production of hydrogen energy. The task force is due to report before the end of the year and I believe its recommendations will have the potential to be as transformative as Shannon Development has been in the past.

One of the biggest worries for me is that we don’t know how long the energy situation will last, or how high the bills will go. And we have to make sure that we don’t use all our resources at once to deal with the energy crisis – we have to keep something in the tank.

The opposition wants us to spend all at once. They were advocating for a mini-budget over the summer, and now they want the government to use all our resources in September, but that would leave us with nothing for the new year. This is a very bad strategy because it could make us dependent on the bond markets for money at a time when interest rates are rising.

In other areas, we have strengthened our competition laws to make it much more difficult for companies to engage in price gouging or other unfair practices. We are also strengthening our consumer protection laws.

People want to know that the government will help them. Today, I can reassure them. We’re here to help, we’re here to make sure we can significantly lessen the blow, to make sure your hard work pays off better, to put more money back in your pocket and lower the cost of living for you and your family.

Leo Varadkar is Tánaiste and leader of Fine Gael