Vol. 1080 No. 4
156. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the steps he is taking to ensure that flood insurance is extended to the approximately 290,000 buildings in the State that have limited or no flood insurance; and if he will make a statement on the matter. [10449/26]
This question relates to flood insurance. We have seen floods destroy homes, communities and businesses alike. The Central Bank's figures show that 290,000 buildings in the State are at risk of flooding and that the owners struggle to access flood insurance. Almost 100% of those have either limited cover or no cover at all. This does not even include properties at risk from coastal flooding. What actions is the Government taking to make sure that flood insurance will be available to everyone who needs it?
I acknowledge the serious damage caused by recent flooding events and their impact on families, communities and businesses across Ireland. The Government remains committed to protecting Ireland’s current and future generations by investing in climate adaptation measures to manage the impacts of extreme weather. Accordingly, €1.3 billion has been committed to the delivery of flood relief schemes over the lifetime of the national development plan, NDP, to 2030. This will protect approximately 23,000 properties across various communities from river and coastal flood risk.
In terms of flood insurance, the Central Bank of Ireland has undertaken extensive research into the nature and scale of the flood protection gap in Ireland. It found that one in 20 buildings - approximately 5% - has limited access to flood insurance and that 54% of this gap is concentrated in Dublin, Cork, Louth, Clare and Kildare.
It found that one in 20 buildings, approximately 5%, have limited access to flood insurance and that 54% of this gap is concentrated in Dublin, Cork, Louth, Clare and Kildare. However, our recent experiences demonstrate that the impacts of flooding are not solely limited to those counties. The report notes that no single solution exists to address the flood protection gap.
Building on the work carried out by the Central Bank, the Action Plan for Insurance Reform 2025 to 2029 includes four specific actions on flood and climate protection. With respect to action 17 of the action plan, the Department of Finance is currently engaging with multiple stakeholders on the development of a long-term strategic approach to the provision of flood insurance to consider potential solutions specific to Ireland to increase the availability and affordability of flood insurance. An update will shortly be provided to the Cabinet sub-committee on insurance reform. My officials will also continue to monitor developments at EU and international level and assess flood insurance matters, including through participation in the OPW and the Insurance Ireland working group. These matters remain a priority for the Government and efforts continue to be made to encourage a responsive approach from the industry.
Lack of access to insurance can affect communities and businesses in a very real way. The Minister of State mentioned the Central Bank report. In 2024, it reported as follows: "The occurrence of a severe flood could leave households and businesses with high levels of uninsured losses, impairing economic recovery from a flood event"., It concluded that there is "a serious risk of complacency". Everything the Minister has said is more of the same complacency. Indeed, when the Tánaiste, who is seated beside him, was Minister ten years ago he talked about flood insurance. Ten years on, nothing has happened. We have the same situation over and over again.
The Minister of State is talking about more high-level reports, meetings and so on. Right now, we have a situation where private insurance companies pick and choose who they will extend flood insurance to. We do not allow that to happen with health insurance companies. We do not say they are allowed to only pick people who are healthy, young and all of that, but we let flood insurers get away with this. What is the Government going to do? We can roll back the tapes ten years. In fairness to the Tánaiste, when he was the Minister responsible for the OPW, he said we needed to deal with this issue. However, ten years on we are still not dealing with it and there are still no solutions. When is the complacency going to end?
EU legislation, the Solvency II directive, states that neither the Central Bank nor the Minister for Finance can compel insurance companies to provide insurance cover. The last action plan on insurance reform delivered but gaps remain, and we acknowledge that. That is why we published a new action plan on insurance last summer. We acknowledge that State intervention is needed. That is why there are four actions in the action plan targeting this area. One of those actions, a priority action, is to develop a long-term strategic approach to the provision of flood insurance. That will bring together the Central Bank, the insurance industry, the Department of Finance and the OPW. The insurance industry has already established a flooding task force and we expect proposals in the next month, which will feed into our Department’s stakeholder forum, which will also take place next month. The forum will bring together the Central Bank, insurance industry, Department of Finance and OPW to bring about a proposal to address this gap in the market.
The problem is that we have been hearing the same thing for the past ten years regarding task forces, multi-agency groups and the rest. That is all fine. We have to do some of that work to get the results and ideas. However, the Minister of State talks about his plans delivering but ten years on, they have not delivered for these households. Thousands of houses and businesses across the State have no insurance and are at risk of flooding. That is the problem here. The Government does not have a concrete plan.
Last year, when we raised this issue, Fine Gael went away and met with the CEOs of insurance companies and told them they should improve the level of cover for areas with demountable flood defences. Let us park demountable flood defences, however, because only 4,500 people use them in the first instance. The vast majority, 250,000 people, do not use them. The reality is the insurance companies have not done anything on this issue. If private insurance companies are unwilling to provide insurance cover, the State needs to address that. Across the European Union, there is a recognition and acceptance that the State needs to step in where the sector fails. Is the Government going to deal with this issue and does it have a potential State-supported scheme on the table?
The Government is dealing with this issue. That is why it is a number one priority in the action plan that was launched last year. The flood protection gap in this country is one of the lowest in the European Union. Under 5% of people cannot get access to flood insurance. I acknowledge that is of cold comfort to that 5%, but in terms of coverage from a European Union perspective, we have one of the lowest gaps in the EU. We are meeting with the industry and it has established a flood task force. The proposals are imminent, which will feed into the group that has been established by the Government, consisting of the OPW, the Department of Finance and the Central Bank. While I acknowledge there are people who cannot get access to flood insurance, this Government has not left them uncompensated. They have received funding through the humanitarian fund which is supported by the Government. I acknowledge there is a gap in the flood insurance market but that gap has been supported through Irish Red Cross funding put in place following every flooding incident. The most recent Red Cross funding put in place resulted in an increase in the funding paid to businesses that suffered flood damage.
157. Deputy Ged Nash asked the Tánaiste and Minister for Finance to confirm the date on which the expanded living cities initiative will be formally introduced; and if he will make a statement on the matter. [10467/26]
I raise with the Tánaiste the extension of the living cities initiative to five regional towns, including two in my constituency, Drogheda and Dundalk. When he has the opportunity he might state exactly when the initiative will go live for the new areas provided for under the Finance Act.
I thank Deputy Nash for raising this issue, which he has raised on a number of occasions. As the Deputy and the House are aware, the living city initiative is a targeted measure aimed at specific areas in need of regeneration. It offers either income or corporation tax relief for qualifying expenditure incurred in the refurbishment and conversion of qualifying residential and commercial buildings located in what we call special regeneration areas, currently in Cork, Dublin, Galway, Kilkenny, Limerick and Waterford. Budget 2026 announced a number of enhancements to the living city initiative to strengthen the scheme, including extending it to the end of 2030 and that it will be available to residential properties built before 1975 instead of 1915. Also, if work is carried out by an enterprise, the maximum relief available will be increased from €200,000 to €300,000.
It was also announced, to get to the nub of the Deputy’s question, that the scheme would be extended to five regional centres, as set out in the national planning framework, namely, Athlone, Drogheda, Dundalk, Letterkenny and Sligo. The cities and towns in which the special regeneration areas may be located are not specified in primary legislation. Instead, the existing areas were designated following consultation with the relevant city councils and an independent review by a third-party adviser. We are repeating that process for the new areas.
I am pleased to say my Department has very recently received the draft special regeneration area maps for each of the five towns from the relevant local authorities. I acknowledge the speed at which the local authorities moved, which is really important. An independent review of the draft maps will now be undertaken to ensure the maps' consistency with the criteria for the special regeneration area. My officials are currently working on appointing an expert for that review. Upon the satisfactory conclusion of that review, it will fall to me to designate the special regeneration areas by an order. I anticipate that the areas will be designated by the end of March. It will then be a matter for the local authorities to implement the scheme. My expectation, based on engagement, is that all of the new special regeneration areas will be open by June at the latest. I look forward to keeping the Deputy up to date on that.
I thank the Tánaiste. We can all agree that vacancy and dereliction are a scourge in communities up and down the country. There is a particularly pronounced problem in my hometown of Drogheda. The Tánaiste will be aware of the extent of the problem in the historic core town centre of what is a very historic town, with some very significant buildings from an architectural and heritage point of view. Louth County Council did an analysis last year of the inner town centre area and identified approximately 58 vacant and derelict buildings. In fact, 46 of those are now in the area the council proposes the special regeneration area should service in the context of this scheme.
Close to 600 applications have been made since the inception of the scheme a number of years ago. There is a real job of work to be done by the Department of Finance and Revenue Commissioners to ensure the newly expanded and enhanced scheme is accessible and people understand how they might use the scheme and how it might benefit them individually and the towns we represent.
I agree and I want to pick up on that point around the local authorities. Although I am quick enough to criticise various local authorities on various occasions, I want to acknowledge the speed at which Louth County Council and the councils for the other three areas moved. That shows, as Deputy Nash said, the scourge that dereliction and vacancy are, and in a housing emergency. We are all aligned on the need for this and I am pleased that we should be in a position to designate the special regeneration areas by the end of March and get these schemes open for applications, I hope, by June.
That point about the low uptake of the existing scheme is fair. Some of it is related to publicising the scheme and getting the word out there. I will certainly reflect on how we can do more of that with the local authorities. In regard to some of the changes we have made around the over-the-shop criteria, 1915 was probably too restrictive and we are moving it to 1975. We are also providing the certainty that it will be in place until 2030 and, coupled with the five additional towns, I hope it will make a real difference. We will obviously all need to monitor this. I know the Deputy's county is the only one that has two towns in the scheme, Drogheda and Dundalk. I have been in Drogheda and I know the challenge of dereliction. I think this will make a big difference.
It is one weapon in our armoury. There is no doubt about that but we need to take a varied approach to this. Another initiative, which was announced in the budget last year, was the transitioning of the derelict sites levy to a derelict sites tax. By definition, the responsibility for the collection of that tax will be given to the Revenue Commissioners. I have been campaigning for that for years; it makes sense. I always made the point that business owners who can afford to allow a building to become vacant and derelict must be quite wealthy because owners need to sweat every single asset they have to make sure their business is successful. Sometimes the only language that people understand is the brown envelope with the harp on it containing a tax demand. It is important we introduce that as quickly as possible.
I am a bit confounded as to why it will take so long to introduce the tax, or transition from the levy to the tax. We have a very sophisticated system in Revenue. We could set up a very complex wage subsidy scheme practically overnight thanks to the expertise of officials in Revenue, the Department of Finance and elsewhere, with the support of IBEC, ICTU and so on. I am confounded as to why the derelict sites tax will take so long to introduce.
The Deputy is right that the living cities initiative is just one tool. That is fair. The derelict sites tax will be another. It is my intention to update the Government in March on the policy direction in relation to that. We are working closely on it. There are meetings, at least weekly, between my Department, the Department of housing at official level. It is, as the Deputy knows, my intention to legislate for that tax in the next budget. We have not decided on the rate yet but it will be no lower than the current rate. There is an argument to be had around whether it should be higher but we will return to that.
I accept this is a big body of work so I am not apportioning any kind of blame or responsibility. I think Revenue will be able to do this quite quickly. The challenge will be when it is ready to be done in terms of what is dereliction and the consistent application of dereliction. When you move, as the Deputy knows, from a levy to a tax, it has to be applied formally. I am very open to having a conversation about how quickly it can be done but it will involve a lot of work on the part of the local authorities as well as Revenue. Revenue is good at collecting tax but we have to have absolute clarity on the maps, dereliction, what is a tax and how that is applied in Louth and Wicklow on a consistent basis.
158. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the total number of homes and total value of homes that have been bulk purchased each year, and subject to the higher rate of stamp duty, since the higher rate was introduced; and if he will make a statement on the matter. [10450/26]
This Government, Fine Gael in particular, has a long history of welcoming in the vulture funds to snap up Irish homes. Only because of rightful public anger at vulture funds bulk-purchasing homes a number of years ago under the nose of ordinary workers and families have we seen any pressure put on, and action by, the Government. The Minister committed that this practice would end. Has it ended or is it still going on? If it is still going on, how many family homes were bulk-purchased by vulture funds last year and in previous years?
I thank the Deputy for the question. As he will be aware, the standard rates of stamp duty currently applying on the acquisition of residential property are 1% on values up to €1 million, 2% on values exceeding €1 million and 6% on any balance above €1.5 million. However, in May 2021, a higher stamp duty rate was introduced with the aim of disincentivising investment funds from buying up large numbers of completed houses, usually with the intention of placing them on the rental market. The rate that initially applied was 10% but this was subsequently increased to 15% in budget 2025. The higher stamp duty rate is charged on the acquisition of individual houses, where a person acquires at least ten such properties during any 12-month period.
Complementing the higher stamp duty since 2021 are section 28 guidelines for planning authorities, which aim to prevent multiple units being sold to single buyers. Revenue has provided me with the following provisional data regarding the number of residential properties subject to the higher rate and the total approximate value of those homes. In 2021, 189 properties were subject to the higher rate, with a value of €47.9 million. In 2022, 454 properties were subject to the higher rate, with a total of €177.5 million. In 2023, 675 properties were subject to the higher rate, with a total value of €266.1 million. In 2024, that fell to 396 properties, with a value of €156 million. In 2025, that reduced to 293 properties, with a total value of around €88.3 million.
The provisional data, therefore, indicate that the combination of the two measures is now having the desired effect, with the number of house acquisitions subject to the higher stamp duty rate falling each between 2022 and 2025, inclusive. It is also important to state something that is not stated, namely, that the Central Statistics Office, CSO, data now show that institutional buyers are also net sellers of homes. In 2024, they sold more houses than they bought.
We will continue to monitor these trends to continue to ensure the trend is downward, as it has been for the past three years, and to ensure these measures are having the desired impact. I will keep this under review on an annual basis.
Under review.
That is what we do in the budget.
The Minister promised us he was going to end this practice. He has just told the House that nearly 300 family homes were bought up by vulture funds last year, and he is going to keep it "under review". Under his watch, the Government is sitting by and allowing vulture funds to buy up family homes, a practice he promised over and over again that he would end. A total of 293 homes that should have been bought by ordinary workers and families last year were snapped up by corporate landlords and vulture funds. What happened to the Minister claiming he was going to stop all of this? When he was Taoiseach, he wrote to the finance Minister saying not enough was being done to stop the bulk-purchasing of homes. He argued that bulk-purchasing of homes needed for first-time buyers could not be tolerated. It appears now that he has tolerated 293 of them being bulk-purchased last year.
The measures are not enough. The measures were in place all of last year. What is the Minister going to do, or is this, again, just something Simon says? I would ban vulture funds bulk-purchasing homes. It should be stopped. It is immoral. There is a crisis that the Government parties have created and the Minister is now facilitating vulture funds to snap up hundreds of homes every single year, and we are supposed to have cold comfort that the trends are going down.
Here is what we actually did. The Governments I have been part of, first, introduced a higher rate of stamp duty. Second, the Government I led when I was Taoiseach and wrote that letter increased that rate of stamp duty from 10% to 15%. Each year, as a result of taking those measures, the number of homes being acquired has fallen. It fell in 2022, 2023, 2024 and 2025, and it is expected to fall in 2026. What I am now telling the House, based on CSO data, not my view of the world, is that we are now seeing these institutional buyers becoming net sellers of homes. They are now selling more homes in Ireland than they are buying. The policy effects, coupled with the planning guidelines, are having an impact. Of course, a Minister for Finance will say they will keep these issues under review because, as the Deputy knows, we review all of these measures each year in the annual budget. We moved from 10% to 15%. I think Deputy Doherty would have advocated for moving to a higher rate than the 10%. That was required and since we made that move, we have seen the positive impact, and we will continue to monitor this very closely. The broader issue in relation to housing, housing supply and this Government's commitment is something I will have to debate when I have more time on the clock.
The stamp duty measure was introduced back in 2021. Does the Minister know that vulture funds purchased more homes last year than they did in 2021? He said the trend is going down every year. That is not true; the figure actually increased in 2022. The 293 homes purchased are homes that people are queuing for and want to have as their family home, their forever home, and vulture funds are buying them up because they have unlimited means. The Minister can splice and dice this any way he likes. He promised he was going to end this practice, which can be ended. Stop tinkering about the edges, and ban it. Stop imposing taxation on vulture funds because they have unlimited means. Does the Minister know why? It is because he provided them with a sweetheart deal. They do not pay any tax on rental income, the €3,000 they rent out the properties for. This is why they can pay the Government's tax. We cannot get away from the fact that hundreds of properties that should be available to families to start off their own homes are being snapped up by vulture funds.
Ban the practice. Stop tinkering around the edges. I hear the Tánaiste is not even considering any other policy bar reviews. The facts speak for themselves.
The policy every Minister for Finance undertakes is to review all taxation measures in the context of a budget. That is what we will do this year, as we do each year. We have already shown that we have a willingness to act and to take further policy measures to make sure the intervention was having more of the required effect.
The Deputy calls them "vulture funds" because that is a loaded term. We need private investment in the housing market. That is not just my view; it is the view of the Housing Commission. We need people to come into this country and invest because we also need rental properties in this country. Houses are required for the rental market. As of the last census, there were 330,000 units in the private rental sector, of which 62% were outside Dublin. We need to make sure we also have a rental supply. I have talked and the Governments I have been in – this Government and the last Government – have talked about using the taxation system to disincentivise the practice and to collect more revenue for the State where the practice was carried out. We have never suggested that there is not a role for private investment in relation to housing supply. That might be a point on which we differ but it is a point which the Housing Commission also recognises.
159. Deputy Cian O'Callaghan asked the Tánaiste and Minister for Finance the action he is taking to protect the rights of mortgage holders whose mortgages were sold to non-bank lenders after the crash; and if he will make a statement on the matter. [10058/26]
I want to ask about families who have had their mortgages sold to vulture funds. This has caused an incredible amount of stress and anxiety to people all over the country. These people are supposed to have the same rights as anyone else under the code of conduct on mortgage arrears, but this has not been the real lived experience of many people. What is the Government doing to ensure these mortgage holders’ rights are protected?
I thank the Deputy for this important question. There is a wide range of measures in place to protect mortgage holders through the consumer protection framework, but it is an issue on which we must always remain vigilant. I am pleased to see that arrears over 90 days are now at their lowest levels since 2009, at 3.4% of all private dwelling house accounts. We all welcome that after the horrific period people went through after the financial crash in this country. We need to remain vigilant. We have a framework that requires all regulated entities to be transparent and fair in their dealings with borrowers. It ensures that borrowers are protected from the beginning to the end of the mortgage life cycle. The same protections apply to mortgage holders regardless of the regulated entity with which they are dealing, whether it is a bank, retail credit firm or credit servicing firm. If there is any deviation from that, I would welcome examples and would point out that there may be recourse to the likes of the Financial Services and Pensions Ombudsman.
All credit servicing firms are required to be authorised and supervised by the Central Bank of Ireland. They are subject to all relevant regulatory requirements and financial services legislation. These include the Central Bank of Ireland's consumer protection code and the code of conduct on mortgage arrears. The consumer protection code is the cornerstone of the Irish financial consumer protection framework. It requires regulated firms to meet minimum standards of care towards their customers and to ensure regulated firms operate to protect their customers' best interests. A revised and enhanced version of this code will come into effect next month, which will include enhanced provisions in relation to mortgage providers. For example, mortgage providers are currently required to issue a notification to customers either annually to variable-rate mortgage holders or at the maturity of fixed rates. The notification sets out a summary of alternative mortgage products available from that provider. Under the revised code, recognising the role that switching can play in an effectively functioning mortgage market, mortgage lenders will be required to include within these notifications a personalised euro savings estimate alongside each alternative mortgage refinancing option presented. Lenders will also be required to provide a specific reminder to customers concerning mortgage refinancing options. The code of conduct on mortgage arrears requires regulated firms to have a transparent process in place for dealing with borrowers in, or at risk of, mortgage arrears.
I am not sure that the Tánaiste understands the extent of the problem. I thank him for the answer he has given. The code of conduct on mortgage arrears is not being enforced. People go through absolute hell when their mortgage is sold on. The Tánaiste asked for an example and I will give him one. I spoke recently to a person who had their mortgage sold through the State-engineered Project Glas, despite the fact that according to Central Bank rules her mortgage was actually sustainable – it was in positive equity. It has since been sold again even though repayments were being made. She has faced serious data breaches, wrongful receivership and long regulatory delays. She has not even been able to find out if the latest vulture fund has lawful title to her home. She is now facing a repossession order and potential homelessness. I am asking the Tánaiste what he is actually doing about this. It is fine to have all these procedures in place but they are not being enforced and people are going to hell as they try to have the protections that should be applying to them applied.
As I said at the outset, we must always remain vigilant in this area. I am putting the facts and the law on the record of the House in terms of the obligation on all regulated entities that should be consistent regardless of the entity. Of course if there are any examples - the Deputy has given me one - they should be pursued fully. While I am not getting involved in individual mortgages, I am very happy to discuss the broader issue and, indeed, any examples the Deputy wishes to give me with the Central Bank as well. The Deputy has asked what actions have been taken. We are seeing further enhancements in relation to the code coming into place next month. I am very sorry to hear about the very difficult case the Deputy has rightly highlighted this evening. We have very clear standards that are expected to be followed in relation to all mortgage holders, regardless of which bank or entity holds their mortgage. Any breaches of those standards should be pursued rigorously with the authorities. I am very happy to discuss that further with the Central Bank and pursue that example.
The person who contacted me recently told me of how the cumulative impact has been devastating. She has lived for over a decade under constant stress and uncertainty with profound effects on her mental health and physical health, her family life and her ability to live with dignity in later life. She is now facing the risk of imminent homelessness. She has tried to go through the regulatory process. She has been on to the Financial Services and Pensions Ombudsman and so on. Having worked in an area related to this one, she has an ability to try to advocate for herself that a lot of people would not have, and she has still found it impossible. The reality for people is that they have experienced multiple breaches of regulations but every time they try to fight that, it is extremely difficult for them. They are faced with punitive interest rates that often mean they have effectively paid off the capital on their home and the normal interest rate but they are still stuck in a perpetual mortgage. I am asking the Tánaiste what he is going to do to address this.
I genuinely do not wish to be argumentative about this because the case the Deputy highlighted is clearly one that is causing his constituent or the person who contacted him extreme pain and anguish. However, my genuine belief from my engagement with officials and with the Central Bank - this is a broader point around the enforceability of the protections that are already there - is that the protections that are there are robust and are meant to apply without fear or favour to all regulated entities. I take very seriously any entity that does not follow those standards because they are the laws of our land. They are the structures we have in place. I do not have the benefit of the information the Deputy has. While I will not get involved on an individual mortgage, I am very happy to take that as an example and discuss it directly with the Central Bank and revert to the Deputy if he wishes to send it on to me.
160. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance if he will bring forward a cost-of-living package, considering inflation is far higher than projected on budget day, at 2.8%, and given the findings of the ESRI that the budget has resulted in income losses for the average household; and if he will make a statement on the matter. [10451/26]
Inflation is 50% higher than what the Government had forecast. It claimed prices were stabilising and that was the basis for the Government pulling the cost-of-living supports in the budget. The ESRI said that the budget resulted in income losses for the average Irish household. Will the Tánaiste accept he got this badly wrong? Will he bring forward a cost-of-living package that so many families desperately require giving the prices that are being charged to them in different guises, whether shopping, insurance or many other examples?
As the Deputy and people across the country will be aware, the Government has provided significant support to households and businesses to try to help to absorb the worst impact of rising prices on households and businesses over the last four years. Analysis from my Department confirms that lower income households gained the most from measures introduced in budget 2026. The analysis also shows that people with the lowest incomes fare the best, with gains in the bottom two cohorts of 4.9% and 3.8% respectively.
The targeted nature of the package is also evident in supports provided to households with children. Over previous budgets, governments provided supports to give relief to the most vulnerable in the face of extraordinary shocks. At the same time, we avoided a scenario whereby fiscal policy would have served to add inflationary pressures in our economy. I know this is a hard thing to say when people are under pressure, but the Government can have an inflationary effect which can inadvertently make things more challenging in relation to the cost of living.
That is always a balance one has to try to strike. Full employment can never be taken for granted, as it sometimes is in political debate. The budget measures were calibrated to protect jobs, maintain our competitiveness and keep our public finances safe while allowing for increased capital investment.
The budget moved away from the one-off packages of previous budgets, as we said we would do, in favour of more targeted and permanent measures that will provide greater certainty to people. However, recognising that energy prices remain elevated, we extended the reduced VAT rate on gas and electricity bills until 2030. We also extended the rent tax credit and mortgage interest relief to further support households.
Headline inflation averaged just over 2% in 2025. I am, of course, conscious that the rate reached around 3% in the autumn of 2025, as the Deputy alluded to. The Department is clear this increase reflected a base effect, meaning that very low figures were recorded in the same period a year earlier. Inflation is now moderating. We see this in the figures for both December and January. This reflects, in part, the unwinding of the base effects. This is in line with my Department's expectations and we expect further moderation as the year progresses. The ESRI and Central Bank published revised forecasts for inflation in December of between 2% and 2.25% for 2026.
The latest increases in food prices expose the Government's bogus justification for ripping away the cost-of-living supports. The ESRI was very clear: lower-income households felt worse off as a result of the budget. We can argue over and back all the time but the lived experience is very clear. Deputy Mary Lou McDonald stood here earlier today and outlined that 70,000 more households cannot pay their electricity bills than the same time a year ago. This is not us saying it, but the CRU. These are families. They could not fit into Croke Park and the Aviva together. That is just the additional number of people in the past year who cannot pay for their electricity. Whatever the Minister might say, suggesting the Government is doing this, that and all the rest, 70,000 more people are worse off. Those are the bare facts of it.
Market researchers tell us that food inflation is 6.8% and the CSO tells us it is 4%. Five large supermarkets control 90% of the market. The Government refuses to stand up to these vested interests over prices that are out of control. The Government is not ending the rip-off or getting prices under control and all it has done is withdraw the supports. Does the Minister accept the reality of all of these figures and recognise that the State has to intervene and support those individuals in a cost-of-living package that the Government wrongly decided to withdraw at the wrong time?
We did take interventions in the budget to support people. In this Dáil we did not provide energy credits to anybody, but we did take a decision to bring in a range of targeted measures for those most in need. There is a legitimate debate on how best to do that and we have that debate back and forth across the floor. However, we introduced a social protection package of over €1 billion. We increased weekly payments to 1.5 million people, including our pensioners, carers and people with disabilities. These payments have been increased by more than €50 over the past number of years. We increased the domiciliary care allowance. We have the largest ever increase in the child support payment. To help working families, which we rightly talk a lot about in this House, we saw a large increase the threshold for the working family payment. We saw large increases in eligibility for fuel allowance. The minimum wage also increased. Next month, we will expand the fuel allowance for families receiving working family payment. Later this year we will introduce the largest ever increase in income disregards for carer's allowance. We will pay the carer's support grant. We are expanding the back-to-school clothing and footwear allowance for preschool children. I accept the cost-of-living challenge is real; I do not doubt that. However, I disagree and push back on the idea that we did not take actions to try to assist.
I accept the Government did all those things; that is a statement of fact. However, if the Minister thinks that people are not worse off this year than they were last year, he is living in a bubble and that is the problem here. The facts are clear. As I said, energy is just one example where 303,000 people cannot pay their bills and that is only electricity. Another 170,000-plus cannot pay their gas bills. Prices are going through the roof. The Minister talked about how the Government had put up rates. It is also putting up rents with the rent-hike Bill. Electricity bills have gone up. The Government put up college fees. It has put up taxes on petrol and diesel. It put up the tax on the family home. It is planning to increase taxes on home heating oil. Insurance premiums are up. Car insurance is up. Home insurance is up. Health insurance is up. Public liability insurance is up. The Government has completely failed to be true to the promise it gave in the election campaign to reduce childcare costs. It abandoned workers when it promised them it would provide them tax cut, but instead it was developers who got the multimillion euro tax cut. The Government based all this on inflation rates that are now 50% higher than it had projected in the budget. It has got this wrong. People are struggling and people are suffering. A cost-of-living package is desperately needed. The Minister and his colleagues need to get out of the bubble they are in and recognise where ordinary people are at.
We are not in any sort of bubble. The Deputy may have his political differences with me, but the economists in the Department of Finance stand over the projections. The ESRI and the Central Bank projections, published in December are there for him to see. I have outlined, as was outlined to me, the base effect. We expect inflation to further moderate as the year goes on. The Deputy has a list of things he thinks we should have done and we also have a list of things we did. Budgets are about trying to get the balance right. Wages are also up. The State pension is also up. Carer's allowance is up. Employment is up. Inflation is falling. The number of people buying their first home is up. The number of homes being built is also up. We intend to build on that in the time ahead because this was the first budget of five. While different people will have different views, we took decisions to lower the cost base for the hospitality sector. We took the decision to try to stimulate apartment building. Let us see and we will debate that in time. I believe that is a good thing to have done; the Deputy has a different view. We also took the decision to invest significantly in public services, including an extra €618 million in disability services. The Deputy knows my views on the progress I believe we can make on personal income tax to help working families in the time ahead.
161. Deputy Noel McCarthy asked the Tánaiste and Minister for Finance the measures being considered by his Department to ensure that flood insurance cover is made more accessible to households at risk of flooding, or those that have previously been flooded; the further engagement his Department has had with insurance providers in this regard; and if he will make a statement on the matter. [10351/26]
I thank the Deputy for raising this important issue. I would like to acknowledge the severe impact the recent storm has had on families, communities and businesses across Ireland. In doing so, I also acknowledge the work of our emergency services, our local authorities, the Civil Defence and the very many organisations and individuals who worked tirelessly for their communities over the past few weeks. It is also important to state that the Minister for enterprise, Deputy Burke, and the Minister for Social Protection, Deputy Calleary, moved quickly to open the enhanced emergency humanitarian flooding support for impacted businesses, and emergency response payment scheme, to help businesses and homes to get back on their feet.
As I outlined in my earlier reply, insurance reform, including increasing the affordability of and accessibility to insurance, including flood insurance, remains a key priority for the Government. The Action Plan for Insurance Reform 2025-2029 includes specific actions on flood and climate protection.
My Department is currently engaging with multiple stakeholders on the development of a long-term strategic approach to the provision of flood insurance, to consider potential solutions specific to Ireland to increase the availability and affordability of flood insurance. An update on this work and the other specific actions in the plan will be provided at the upcoming Cabinet sub-group on insurance reform.
This work will build on the extensive research undertaken by the Central Bank of Ireland into the nature and scale of the flood protection gap in Ireland, which identified that approximately 5% of buildings in Ireland that have limited access to flood insurance.
We know that flood insurance alone cannot address the totality of the flood protection gap, which is why the Government remains focused on the development of a sustainable, planned and risk-based approach to managing flooding. We are investing in climate adaptation measures to manage the impacts of extreme weather, to protect Ireland’s present and future generations.
A total of €1.3 billion has been committed to the delivery of flood relief schemes over the lifetime of the national development plan to 2030. This will protect approximately 23,000 properties across various communities from river and coastal flood risk.
I thank the Minister of State for his response. I know he is acutely aware of the impact of damage caused by flooding and the lack of insurance cover thereafter. My constituency of Cork East, particularly Castlemartyr, Killeagh, Mogeely, Midleton, Rathcormac and Whitegate, suffered extensive flood damage caused by Storm Babet in October 2023. Flood relief schemes and protection measures are progressing but they remain years away from completion. An individual property protection scheme to provide flood protection barriers has also been established but again the roll-out has been slow.
Insurance payouts appear to be minimal in the aftermath of storms. I know of one man whose entire fleet of cars was destroyed but he was only paid roughly 10% of the value of his policy, leaving him with only the legal route to pursue his losses. Others will not be insured again having received a payout. These are real people with real stories. In the absence of flood schemes insurance protection gaps in flood prone areas have developed. I ask the Minister of State to do all he can to ensure constant engagement with the insurance industry and relevant stakeholders.
I would also like to be associated with the Minister of State's words of praise for all of the emergency services.
I thank Deputy McCarthy for making those very clear and valid points this evening. The Tánaiste has just reminded me that the Cabinet committee on climate is meeting in the morning and one of the items on the agenda is consideration of what interim measures can be introduced in advance of permanent flood defences going in to particular areas. We need to speed up mitigation measures in areas such as those mentioned by the Deputy.
I reiterate in relation to the action plan on insurance reform that there are ten priority actions, one of which is in the area of delivering flood insurance to fill the gap that is there. Taking a long-term, strategic approach to the provision of flood insurance will involve building on the work that has already been undertaken by the Central Bank, as well as working with the insurance industry, the Department of Finance and the OPW to design a scheme that will be fit for purpose for Ireland.
The insurance industry has already established a flooding task force. I met a member of that task force earlier today who informed me that it will have proposals for consideration by Government in the next number of weeks. Work is well under way in terms of addressing the flood insurance gap that currently exists.
I thank the Minister of State for his positive response. As a result of a lack of flood insurance, residents are fearful of further damage to their homes or businesses whenever bad weather is forecast. Has the possibility of a flood insurance cover scheme to underwrite flood risk been explored? Similar reassurance schemes exist in other jurisdictions such as Flood Re in the UK. Is the Minister of State of the opinion that such a scheme could be implemented here?
My home town of Fermoy has had flood protection, thank God, since 2012, which is working very successfully. However there are some commercial businesses that still cannot get insurance, even though the town is flood protected.
Again, I thank the Minister of State for his response.
The Deputy mentioned particular areas where flood defences have been put in place but flood insurance cover remains problematic. That is a big concern because the Government has invested tens of millions of euro in permanent flood defence mechanisms but the insurance companies have not responded adequately. I met the Minister of State, Deputy Moran, earlier today and am due to meet with the Minister of State, Deputy Cummins, next week to discuss ensuring that outstanding service level agreements that are in place are adhered to in order to give insurance companies confidence to come in and provide insurance where the State has made the necessary investment.
The Deputy also mentioned Flood Re, a scheme that is in operation in the UK. The Department of Finance explored that scheme back in 2016 but at that time it was felt that it was not a good fit for Ireland. However, in the context of the new action plan on insurance reform, the Department is re-evaluating that scheme, as well as looking at other international models to see how they can feed into the work that is ongoing here from an Irish perspective. The Central Bank, the Department of Finance, the OPW and the insurance companies, through Insurance Ireland, are coming together in March to examine what options we can look at implementing from an Irish perspective that will fit our model here.
