Dáil Éireann Debate, Thursday - 25 June 2026
9. Deputy John Connolly asked the Tánaiste and Minister for Finance when he will be making a recommendation with regard to any further extension of the tax and excise changes introduced on foot of the Middle East war; and if he will make a statement on the matter. [48378/26]
Amharc ar fhreagraI observed the interaction earlier in the question session between the Tánaiste and Deputy Doherty on this same issue. I very much welcome that the Government is going to bring clarity to this over coming days. It is as I expected because from the outset of the conflict in the Middle East, the Government said that we would observe the impact of the conflict on prices in Ireland and take the appropriate measures at the appropriate time. We have always said that we must be conscious that this conflict could prolong into the winter. As the uncertainty and volatility continues, this is prudent.
I thank Deputy Connolly for his question and his comments, and that is the approach the Government is trying to take. None of this is easy for households or for businesses. War has caused havoc in the world and it has caused a shock to the global economy. Ireland, as a small open economy, is not immune from that. There is no government in the wide earthly world that can insulate its people, even if it wishes to, from the impact of that but what we have said from day one consistently across Government is that we will be nimble and agile in trying to respond to the issue and that we will always keep things under review.
I often get asked, and I can understand why, whether I will agree to this or that for a period of time and what I have always tried to say is that sometimes we have stop, take stock and decide what the appropriate action to take is. In the next couple of days the Government will decide what is now the appropriate thing to do.
We put a very large package of support in place. It is in place until 31 July. It is true that petrol and diesel prices are now lower than when we brought that in. As for whether they are lower by the 32 cent, they are not. As for whether we need to try to avoid a cliff edge, we do. As for whether we also need to be responsible for public money, the taxpayers' money, to give ourselves options for the budget, etc., we do too. This is a balance that we have to get right.
All the current legislation going through the Dáil is simply giving legislative underpinning to decisions we took many weeks ago. We will then update that decision in terms of what excise looks like post-31 July. We will do that in the coming days. We will do it in plenty of time, before this House goes into recess. We will seek to avoid any sudden cliff edge for families and businesses.
I welcome that and I very much welcome the fact the Tánaiste has forecast that we want to avoid a situation where there would be a cliff edge, where suddenly there would be a massive increase in price again, which would impact on households, in particular, and people who depend on their cars because, as we know, unfortunately, the transport system in many parts of the country is not at the capacity we would like to see and people are reliant on private transport. Obviously, the tax and excise changes on fuel have an impact.
I refer to the legislative work that would need to be done before the Dáil rises on 16 July. We must ensure people are assured that throughout the period the Dáil is in recess that we have made provision to ensure we avoid that cliff edge.
It is a fair question. What I am saying is that it is not possible for somebody to absorb the full 32 cent. I get that point but I also have to balance that with the fact the Deputy, on behalf of his constituents, Deputy McCormack, on behalf of his, and all of us on behalf of ours, will be looking for things to be done in the budget too. I cannot ignore the fact that the price of oil is now falling and the fact the Strait of Hormuz is currently open. I cannot ignore the cost, in that on the way in today, I saw the cost of diesel is now below the cost of petrol. The situation is different factually to when we brought in the original package and we need to work our way through that in the coming days.
There is a number of different ways the Government can do that. It can decide to amend, at the appropriate point, the legislation going through the Dáil. That might be the most efficient way should the Government decide it wishes to take action. The Government can decide to bring forward further financial resolutions and the likes, too. The cleanest way might be that before the legislation passes through both Houses of the Oireachtas, the Government makes a determination but that involves a whole-of-government conversation which I am currently engaged in with colleagues.
The final clarity I would seek is in terms of the figure the Department of Finance has put out consistently about the full cost of these measures as being €750 million. Are we making provision, given the fact there may be consequences and there may be a necessity to extend these measures? The Tánaiste is talking about the prices having come down somewhat and maybe ameliorating the change but have we made provision? Are we contemplating what the full cost to the Exchequer might be if the necessity arises to continue these measures for an extended period, given the volatility that seems to exist in the conflict in the Middle East and the uncertainty it may continue to cause for some time? The Tánaiste is correct. All TDs will be coming to his Department with demands for the budget but I want to make sure the Department is fully aware of what this potential cost might be in terms of budget provision.
It is a fair question. Thankfully, as a country, we have had an ability to bring in a very significant package, one of the largest packages in the European Union, without having to borrow for it. Our nearest neighbour, the UK, brought in a much smaller package per head of population and had to go to the markets and borrow for it. I think it got charged approximately 5% for the luxury of that. The fiscal reserves we built up as a country - the surplus we are running in a growing economy - have enabled us to act but there is no consequence-free decision on expenditure either, as the Deputy and I both appreciate.
The current package has cost approximately €772 million. That is made up of €150 million for the original excise duties to the end of May; the €139 million when we decided to extend them to the end of July; €121 million from the further excise reductions we put on top of that; €22 million from the carbon tax deferral; €10 million for the diesel rebate; €40 million for the National Oil Reserves Agency, NORA, levy change; €70 million for the fuel allowance expansion; €120 million for the transport scheme; and €100 million for the agriculture scheme. That gets you to €772 million.
What we need to decide to do next needs careful consideration and a balanced approach to try to avoid that sudden cliff edge for people but also to try to be nimble and agile in our response. We will work through it all in the next few days.
