Limit on what can be done to tackle cost of living increases — Humphreys

The Government does not have a “magic money tree” and there is a limit to what it can do to counter the dramatic increases in the cost of living at present, Minister for Social Protection Heather Humphreys has said.

Responding to the latest increase in fuel prices (which has seen petrol prices rise to €2.14 per litre and diesel to more than €2 per litre), Ms Humphreys ruled out any further measures in advance of the budget to reduce costs.

“I am very, very conscious of the impact cost of living increases are having on the economy across the country,” she said.

The Minister said the social welfare measures in last year’s budget represented the biggest increase in 14 years and were targeted to specific areas where the need was greater.

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She said the Government has already provided a support package of €2.5 billion this year. “I think for people to say we have done nothing is wrong. We have done a huge amount. We have cut the excise on diesel and on petrol. We have cut VAT on gas and electricity. We have reduced public transport fares by 22 per cent.

“We have done an awful lot already. But there are limits on as to what the Government can do. We do not have a magic money tree, there’s no doubt about that.”

Ms Humphreys was speaking at the Creative Spark remote working hub in Dundalk, Co Louth, where she announced a new €5 million initiative to encourage more people use the network of 242 facilities around the country.

“If people can do remote work or work remotely, they will find a hub very close to them. So rather than travelling to Dublin, you’d be able to work locally, like here in Dundalk.”

The Minister said there also might be space in the budget to introduce a new tax break for what she described as the “squeezed middle”.

“Well all of these things have to be taken into consideration [in the budgetary process]. We know that we often talk about the squeezed middle and how we can perhaps improve their income tax situation because for so many you are on 20 per cent and then you jump to 40 per cent. So again, there is space there that I think we should be looking at.”

In the context of the ongoing pay talks between the State and public sector employees, she was asked should there be pay increases for those working in the private sector.

She said private sector workers needed to have conversations with their own employers and said the private sector was in a strong position at present.

“We have full employment. There are 2½ million people that are working in this country. The live register is at its lowest for a decade, at 170,000 people.”

She said after Covid-19, people were now back working.

“What I would say, employers who treat their staff well will retain their staff. It’s actually an employees’ market at the minute and any conversation around pay increases doesn’t matter for the employer and the employee directly.

“Employers who offer remote working can retain employees better. it’s another add-on to their terms and conditions.”