Cost of living measures to feature prominently in Budget 2023, says Taoiseach

The Government has said cost of living measures will feature prominently in Budget 2023 in October.

Taoiseach Micheál Martin and Minister for Public Expenditure Michael McGrath said on Sunday the budget would include specific measures to address increases in the cost of living for people.

Mr McGrath, speaking to The Irish Times on Sunday, said the forthcoming Summer Economic Statement would involve finalising the appropriate budgetary stance for the Government and its approach to Budget 2023.

“The statement will take account of the current domestic and global economic environment, the inflationary pressures and existing policy commitments made by Government across public expenditure and taxation.

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“Budget 2023 will need to strike a careful balance involving taxation changes, a social welfare package and specific measures to address the day-to-day costs that people are facing,” he said.

Speaking separately during his visit to Irish troops in south Lebanon, the Taoiseach said the cost of living crisis would be a priority for the next budget and signalled that fare reductions for public transport may be extended.

“A key part of our agenda is exploring with the social department how Ireland can strategically respond to the cost of living crisis brought about mainly by the war on Ukraine, but even before that the imbalance between supply and demand arising out of Covid-19,” said Mr Martin.

“We want to bring down costs in a sensible way. I would be a strong advocate for the transport fare for education that Eamon Ryan introduced. It makes sense in terms of climate change and utilisation of public transport. It’s important for young people in particular.”

He said much depended on what will happen between now and the autumn. “All that depends on where the economic situation is in October,” said Mr Martin. “There are uncertainties until the end of the year because of the war [in Ukraine], how long it can go on and the supply chain disruption that is going on.

“The one word that sums up the situation in relation to the economic time ahead is uncertainty.”

Separately, Tánaiste Leo Varadkar issued a stark warning to the Irish tourism and hospitality sector not to overcharge customers or run the risk of the Government increasing VAT on the sector back up to 13.5 per cent when it reviews the issue next year.

Mr Varadkar acknowledged there was a serious shortage of rooms within the Irish tourism sector, but he urged hoteliers to adopt a long-term view and keep prices at a reasonable rate.

“There is a general shortage of hotel accommodation in Ireland and it’s important we continue to increase the supply of hotels around the country, some of it though is this pandemic phenomenon of demand snapping back, demand was depressed for a long time but now people are travelling again.

“But one thing I would say to people in the tourism sector, you have had a couple of terrible years, very tough, we understand that but it’s important to treat consumers well and not to engage in over-charging, we need to think long term here and treat people fairly.”

Mr Varadkar’s warning comes as recent figures from the Central Statistics Office show hotel and restaurant prices have climbed by 5 per cent over the past 12 months while global hospitality analysts STR released pricing data which showed Irish prices have soared since 2019.