Taoiseach calls for ‘fiscal sustainability’ as Tanaiste eyes income tax package

By Cillian Sherlock and Grainne Ni Aodha, Press Association

The Government is conscious of “fiscal sustainability” in its response to the fuel crisis, the Taoiseach has said, as he defended a recent package of measures for the transport and agriculture sectors.

The Government has already announced measures worth more than three-quarters of a billion euros in response to the fuel crisis arising out of the war in Iran, largely aimed at the transport and agriculture sectors.

The overall package also contains cuts in excise on petrol and diesel, and extensions of the fuel allowance.

Micheál Martin defended the measures on Monday, saying it was “essential” that Government enabled food production, adding that modern-day trade was dependent on hauliers.

He said: “We are conscious of fiscal sustainability, and the need to make sure that whatever we do is fiscally sustainable over the medium-term.

“And again we have to, from a strategic perspective, we do have to pivot more to renewables because that ultimately is the way to reduce cost for the country overall, and also independence of supply.”

Speaking to reporters in Dublin, he said: “We want this war to end because wars of this kind create shocks.

“We’re already getting feedback from the construction sector that additional costs are beginning to feed in there.

“So we’re doing our best as a Government to try and alleviate pressures on families and on key sectors of the economy.”

Elsewhere, the Tánaiste said he wanted October’s Budget to progress commitments on income tax changes.

Simon Harris told reporters in Drogheda: “I do think one of the ways you help people during a cost-of-living crisis is allow them to keep some of their own money.

“There’s clear commitments around income tax, and I’m determined that we make progress on them.

“We didn’t last year. There has to be a personal income tax package, in my view, in the Budget this year.”

But Harris warned that the world was at an “extraordinarily volatile time”, as he prepared to publish the Spring Economic Statement on Tuesday.

Asked how Government’s worst-case scenario for the war in Iran would impact on the Budget, he said: “The good news is the Irish economy is expected to continue to grow in all scenarios, albeit at a slower rate.”

The Finance Minister said “thank God” for Ireland having a surplus and fiscal buffers as he drew comparisons with other European countries who borrowed as part of their response to the fuel crisis.

“Even in the various scenarios, we will be able to plan for a budget in October which will seek to make sure work always pays, that we can keep our economy secure and safe, and that we can also make further interventions if we need to.”

Asked if the €750 million in measures already announced meant that other supports such as energy credits were now ruled out, Harris said: “No, it’d be foolish to rule anything out, quite frankly.”

We've got to make sure that we have economic firepower... to respond in the winter to deliver a good budget, to deliver a budget that can advance commitments in the Programme for Government, but also a budget that can help people if this crisis is continuing

He said: “The Government has to take this step by step, because we’ve got to get the balance right, the balance between trying to help people in the here and now – because it’s tough for people.

“That’s why we took the decision to reduce the excise on diesel. Prices would have been a hell of a lot higher had we not made that intervention. Same for petrol.

“That’s why we put in place a package for farmers, for hauliers, for farm contractors.

“But we’ve also got to make sure that we have economic firepower, if you like, to respond in the winter to deliver a good budget, to deliver a budget that can advance commitments in the Programme for Government, but also a budget that can help people if this crisis is continuing.”

Martin said it was a “stretch” to suggest the Government is facilitating war in the Middle East because of US military planes flying over Ireland.

It comes after the Department of Foreign Affairs cited “an administrative error” for underreporting the number of such overflights since September.

Martin said: “I’m concerned with the administrative error in the Department of Foreign Affairs. That’s not normal for the Department of Foreign Affairs – it’s a very efficient, professional department.

“They’ve expressed regret in terms of that, and again, the particular circumstances governing those flights, the department would engage with those who are overflying.”

He added: “But I think it’s a stretch by any yardstick to suggest that the Government is facilitating the war because of overflights.

“I don’t think that’s a sustainable proposition. Our view is United Nations exists to resolve these disputes.

“We believe in multilateralism, the international rule of law and this is not a war we are involved in – one way or the other.”