Leo Varadkar: 'This budget will put money back in your pocket'

Government pledges to ease cost-of-living pressures for households and businesses, a better income tax package, and to help society's most vulnerable

Tánaiste Leo Varadkar takes a selfie with Nevin Cody at the Fine Gael think-in in Kilkenny. Picture: Dylan Vaughan

I took time out from the Fine Gael think-in in Kilkenny to meet families and businesses in the constituency. The number-one issue on the doors in 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 how high energy and electricity prices are going to go.

They all wanted to know that the Government is going to help. That is exactly what we are going to do: Soften the blow of the rising cost of living.

When the Russian president Vladimir Putin sent his tanks into his peaceful neighbour Ukraine, he sparked a series of crises with global consequences.

Putin’s war has sent energy prices rocketing, has affected food supplies in Europe and around the world, and the cost of living soaring in countries as far apart as Ireland and Australia.

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

People are worried about escalating prices. 

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

This Government and its predecessor, which I had the privilege to lead, were able to respond in an unprecedented manner to the pandemic. The focus now is the cost of living and the energy crisis.

Like everyone else, I have been horrified by the rising price of energy and the cost of day-to-day goods caused by Putin’s war. We know that people are working hard and that rising costs are making it ever more expensive to do the weekly shop, fill the car, and pay the bills.

Everyone is feeling the squeeze and some people are finding it really hard to make ends meet, and are having to make some really tough decisions.

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

Next Tuesday, Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath will unveil a budget with a laser-focus on helping people and businesses with the cost of living. Measure after measure will make sure that people have more money in their pockets.

If we are serious about doing things differently to before, then Budget 2023 must do three things:

• We must help households with energy bills and the cost of living through this difficult period, and we must avoid businesses laying off staff as a result of high energy costs;
• We must also have a good income tax package, to ensure that people on middle incomes keep more of their hard-earned money. Too many people see any extra income being eaten up in extra income taxes. We must ensure that if you get a pay rise this year, you don’t lose half of it in tax. More income means people have more resources to cope with the rising cost of living;
• We must help the most vulnerable people in our society. There has to be a safety net for pensioners, people with disabilities, and carers. In the past, we have done this in a range of ways; taking €200 off your energy bills or providing extra fuel allowance payments.

As a doctor, I understand the need to treat the underlying causes of a problem, as well as the symptoms. So, while we are helping households and businesses with the worst impacts, 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 kilter with other similar countries. So, we will also set out to reduce some of the high costs that exist in our society, in areas that the Government can influence, like childcare, healthcare, education, and public transport.

Leo Varadkar and Minister for Justice Helen McEntee on walkabout in Kilkenny. Picture Dylan Vaughan.

We need to reform our energy market, because the way that we price electricity at the moment just isn’t working. We must invest more in renewable energy, and in new ways to store energy, like batteries, and interconnectors, to help to stabilise energy prices.

And we must also focus on energy security, to ensure that we are less reliant on fuels imported from countries that do not share our values.

We have set up the Shannon Estuary Economic Taskforce, to examine the potential of that region for economic development and job creation in areas like wind, hydrogen, natural gas storage, and solar. I believe the Shannon region could become a powerhouse for wind, hydrogen, and solar energy generation.

A few months ago, I visited Rotterdam to see at firsthand the research under way there into hydrogen energy generation. The taskforce is due to report before the end of the year and I think its recommendations will have the potential to be as transformative as Shannon Development was in the past.

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

The opposition wants us to spend everything at once. They were arguing for a mini-budget over the summer, and they now want the Government to use all our resources this September, but that would leave us with nothing in the new year. That’s a really bad strategy because it could leave us dependent on the bond markets for money at a time when interest rates are going up.

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

People want to know the Government is going to help. Today I can give them that reassurance. We’re here to help, we’re here to make sure that we can soften the blow significantly, to make sure that your hard work pays better, to put more money back in your pocket and reduce the cost of living for you and your family.

Leo Varadkar is Tánaiste and leader of Fine Gael