Taoiseach defends linking rent to inflation

Inflationary spike is 'temporary', Micheál Martin said

Taoiseach Micheál Martin meeting with the Governor Kathy Hochul in New York.

The Taoiseach has defended the Government's linking of rents to inflation, amid a rapidly rising cost of living.

Speaking in New York where he is attending UN High-Level Week, Micheál Martin said the inflationary spike that Ireland is seeing is temporary, pointing out the current 3% inflation rate is lower than the rise in rents would have been under the previous rent pressure zone regime.

Mr Martin was asked if he agreed that the plan, passed in July, had backfired, but said he believed the spike in inflation would be temporary.

“We need to be fair here. The linking to the rent index was a positive move in the overall context of reducing the level of increases that we had been experiencing. Now we are in the middle of an inflationary spike that has an international dimension to it, largely because of Covid-19 and the interruption of supply chains, and the increased cost of commodities across the globe.

Now the international jury is out as to how long this will last – is it a temporary spike? And the ECB has been saying to us, at EU leadership level, that they see it as a temporary spike in prices that will reduce in the next while."

Mr Martin said while some economists may have a differing view on this, it was the advice the Government had received.

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The Taoiseach was asked about rent price increases afterTánaiste Leo Varadkar said during leaders' questions that there needed to be a "balance" between protecting renters and not harming landlords.

"If you freeze rents absolutely to zero, that could mean an income cut for another person, a pension cut for another person or another person unable to pay the mortgage on that property, exactly the problem that you identified, causing more landlords to leave.”

Government concerned about rising energy prices

The Taoiseach also saidthe Government was "concerned" about rising energy prices, but said there was confidence that blackouts would be avoided. 

Mr Martin said the Government would likely increase the winter fuel allowance in the upcoming budget to counteract this for the most vulnerable, but said a People Before Profit motion aiming to ban the building of data centres would not be "intelligent".

"In the forthcoming budget, we will seek to try and protect the lowest income groups and those most impacted by an increase in fuel prices. And that will be an objective of ours.

"The Minister for the Environment is confident that we will get through this winter. But there are challenges ahead. And that is why I think we really have to push ahead with offshore wind generation. And that's going to be the next big story for our energy generation."