'Significant' rise in social welfare needed to combat cost of living crisis

Mr Varadkar identified childcare as a key area to be addressed by the Government in the context of the Budget. Picture: PA

Childcare fees could be cut before Christmas, the Taoiseach has indicated, while the Tánaiste said that a significant increase in social welfare will be needed.

Both Micheál Martin and Leo Varadkar were speaking at the opening of the National Economic Dialogue and, while the Taoiseach ruled out any pre-budget intervention to bring down the cost of living, he indicated a move could be made before Christmas to bring down the cost of childcare.

Mr Martin said he was not going to announce details of the budget on Monday, but said it will focus on the cost of living for families.

“The budget isn't going to be announced today. And I don't mean that in any sort of facetious way. 

"Childcare is a big issue. It's a very significant cost pressure on families. And we're going to look at that.

“Last year, we took significant measures around giving resources to [Children’s Minister Roderic] O'Gorman to work with the partners in childcare around pay and conditions and to create meaningful career pathways for people working in childcare.

"We're very clear across Government that the next budget has to look at affordability issues in childcare. So that certainly is an issue that will merit consideration.”

Taoiseach Micheál Martin, at the National Economic Dialogue in Dublin Castle on Monday, said: "We're very clear across Government that the next budget has to look at affordability issues in childcare." Photo: Sasko Lazarov/RollingNews.ie

Pressed on whether this will mean fees could be cut this year, Mr Martin said it was possible. “That is the objective of Government. We have to do it obviously within the fiscal framework.”

Government sources said that Mr O'Gorman is determined to see fees cut, but that the process of putting together the Budget is ongoing. The move is seen as a priority for the Government because it would not contribute to inflation and could be done quickly. 

Sources said all three government parties are keen to see fees cut in October. 

Mr Vadkar said that all three parties want to address the cost of living because the spike in inflation is not temporary, adding “it could go on for years”.

“It will moderate, slow but I don’t see a return to very low inflation any time soon. It requires a long-term response as well as temporary measures. As every doctor knows, it’s important to treat the symptoms and you must also treat the underlying disease,” he said.

At the National Economic Dialogue in Dublin Castle. Tanaiste Leo Varadkar said: "The cost of living is rising. And the economy is in good health.” Photo: Sasko Lazarov/RollingNews.ie

“We had the biggest social welfare package in many years last year, brought in by Minister Humphries. But that was on the basis that inflation was running at around two or 3%. And inflation is now running at around seven or 8%. 

So I think it stands to reason that the pension increases and social welfare package will have to be greater in 2023 than they were this year. That's only right. 

"The cost of living is rising. And the economy is in good health,” he said.

Mr Varadkar said it is possible that some welfare increases could come in on the day of the budget as they do not require legislation to be passed in the Dáil.

“Actually a lot of the weekly rates can be increased by ministerial order. So it doesn't require legislation to go through the Dáil. So that can be done more quickly,” he said.

Mr Varadkar identified childcare as a key area to be addressed by the Government in the context of the Budget.