No plans to stop carbon tax hikes despite inflation pressure
Taxes Concerns Cause Even Will There Rise Increasing Further Fuel To Are Prices That Carbon
Carbon tax hikes due to kick in May and further increases in October’s budget have to happen, Finance Minister Paschal Donohoe has said.
Soaring fuel costs are among the key contributors to rising levels of inflation, prompting Sinn Féin to call for a pause in the carbon tax hikes amid fears it will cause even further rises in fuel prices.
Mr Donohoe has ruled out any suspension of the planned increases, saying they are needed to ensure Ireland’s climate targets are met.
In an interview with the , Mr Donohoe made clear that while the government is seeking to introduce a package to help ease the cost of living pressures on families, a freeze on carbon tax hikes is not going to happen.
In last October’s budget, carbon tax increased by €7.50 per tonne, from €33.50 to €41 per tonne. That increase applied to auto fuels. The carbon tax increase will apply to all other fuels, including household fuels, from May 1, 2022, prompting fears about further hikes in fuel costs.
Sinn Féin has led calls for that increase to be suspended, but Mr Donohoe said the increases must go ahead.
Asked if a pause is possible, Mr Donohoe said: “It is not being considered at the moment and it's already legislated. Things are locked up budget by budget and it is legislated for.”
Under pressure in October, Mr Donohoe continued with his planned increase in carbon taxes despite the spike in energy costs. He did so to ensure Ireland can meet its targets on reducing emissions by 2030 and net zero emissions by 2050, he said.
He said such targets are dependent on the carbon tax increases going ahead.
“Yes, if we continue to stand by the increases that we have in place in carbon taxation. That is the direct answer to that,” he replied bluntly.
“I know this is a difficult case to make at a moment in which we are seeing the rising price of energy.
“Carbon taxes are so important. It was, I accept, a difficult decision to make in October when the price of energy was going up. But the win for that is the win you get year by year. When you increase that tax, it generates a lot of money to reinvest back then into the national development plan. So I believe it is affordable, it is going to be demanding, but that's why the carbon tax is so important."
Taoiseach Micheál Martin also rejected Sinn Féin calls to introduce a "mini-budget" to deliver sufficient measures to ease the pain experienced by families, but said measures will be introduced, including a potential doubling of the energy credit and increases to tax-free allowances on workplace bonuses.
Meanwhile, the Green Party's junior housing minister, Malcolm Noonan, said the upcoming increases in the carbon tax should still go ahead.