Carbon tax pause ruled out by Taoiseach amid spiralling costs
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The Taoiseach has ruled out any hope of a planned carbon tax hike being stalled as a measure to help people deal with rising inflation.
Micheál Martin said everybody needs to be instead wary of such "short-terminism" and they need to hold their nerve.
Recent Central Statistics Office (CSO) data shows inflation is at its highest level in 20 years with fuel, rents, and general groceries all sharply increasing in price.
Hard-pressed motorists were affected last October when carbon tax for auto fuels rose from €33.50 to €41 per tonne of carbon dioxide emitted. Householders are due to be affected from May 1, when the same increase will be applied to other fuels.
Despite soaring fuel costs being among the key contributors to rising levels of inflation, Finance Minister Paschal Donohoe has ruled out stalling the carbon tax hikes. He said, in an interview with the , that they are needed to ensure Ireland’s climate targets are met.
Speaking after a visit to Tricel in Killarney, Co Kerry, for the launch of solar heat pump installations and a tour of the company’s manufacturing site, Mr Martin ruled out the hikes being stalled.
He warned people to be “careful about speculating in terms of where inflation will go”.
However, he also warned that while things are bad now, the current inflationary crisis could continue, and maybe get worse, in the coming months.
He said: “We have to plan on the basis that it's more medium term, certainly for the next number of months in this country. Therefore we have to plan accordingly and work with all the partners in respect of this issue.
"That is the agenda at the moment and the Minister for Public Expenditure and Reform and the Minister for Finance are working on ideas around that.
It is a global phenomenon, Mr Martin said.
“It's an energy issue and we know the current situation in terms of Russia and Ukraine could even get worse if things were to turn for the worse there. I hope not.”
He said the crisis now over fuel costs “really does remind us of the need to double down on really expanding our renewables and reducing dependencies, on gas and so on”.
He said the Government will be making a major announcement this week about providing grant assistance to families to insulate their homes with a view to reducing household bills for the longer term. He said the carbon tax hikes will pay for these new grants.
A one-off payment to tackle the cost-of-living crisis for low-income households is expected to be rolled out in weeks. A Cabinet subcommittee is due to meet this week to tackle the impact of rising inflation.
Options include doubling of the €100 electricity credit for households, waiving of hospital fees, and reducing the cost of public transport.