Paschal Donohoe has promised that this year's Budget will help people struggling with the soaring cost of living.
Budget 2023 has been brought forward by two weeks to September 27 as the Government tries to tackle inflation which has seen food, gas and electricity prices soar this year with the ESRI saying 43% of households have now entered fuel poverty. The Finance Minister said this morning there was "huge anxiety" across the country about the spiralling energy costs and promised to introduce measures to help with costs.
"What I will be able to do, and can say now, is that we will be able to help," he told Morning Ireland on RTE. "How we will help and what we will do will be confirmed in the coming weeks as we get ready for Budget 2023."
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Minister Donohoe said this year's Budget had been brought forward by a number of weeks in anticipation of the energy price hikes. The energy crisis is affecting countries all over Europe with the International Monetary Fund concerned that Russia, which supplies the continent with 40% of its gas, may completely cut off its exports to the EU.
Minister Donohoe, as chair of the Euro group, will attend a meeting of finance ministers from the world's largest economies later today to discuss the issue. This will be followed by meetings of energy ministers and finance ministers next week aimed at responding to the crisis.
Minister Donohoe added the Government would consider the introduction of a windfall tax on the profits made by energy suppliers but refused to be drawn on whether it would be implemented. "I indicated before the summer that this was a matter the Government would have to consider," he said.
"Of course, I can never comment on any taxation matter or any decision we make until Budget day and the Government decides on a budget."
He added: "Like any highly complex, highly sensitive issue that's affecting so many people at the moment, there are no simple answers or no simple policies to it. It is unconscionable and wrong that businesses may be worried about going out of business when other businesses, for no reason and nothing that they have done, are also experiencing a surge in profitability.
"That's wrong and we need to consider at national and European level how we respond to that. In addition to that, any decisions that Europe or Ireland makes has three qualities that we need to consider;
"1. We don't make things worse.
"2. We don't stop or undermine the investment to make sure we're insulated from this in the future.
"3. We don't put in place measures that are capable of driving prices up even further."
Mr Donohoe said he is "well aware" of how concern over the cost of heating homes this winter is affecting vulnerable people. "Our elderly citizens, who have particular need for the help that the State can give them, I can see the worry that is there and the concern that is mounting."
He added: "Of course we fully understand that for those who are on lower income, the higher prices hurt them more. What we will need to do, which we did earlier on in the year and will continue to do, is look at a mix of measures that are capable of helping and making a real difference and are also affordable for the country overall."
But Minister Donohoe cautioned that he would not splurge all of the expected bumper corporation tax revenues on this year's budget. "I've been very careful to ensure that as corporate increases have happened and as the revenues have gone up, I haven't translated that into changing my spending plans over the last number of years," he said.
"From 2019 in particular as our corporate tax receipts went up, the spending plans that Government announced on Budget day did not change."
The measures brought in by the Budget will be similar to some of the initiatives introduced in response to the Covid-19 pandemic.
"If you look at the Covid response that we put in place, there's certain features of that which I'm confident we will be to maintain," said Minister Donohoe. "We were able to say how we will help and we were able to do it quickly.
"In terms of the scale of what we did during Covid, the overall cost of that was €48 billion and it happened at a point in which our economy actually wasn't functioning. People were not able to go into work...we had low inflation. We're now in a really different environment and what the Government will do is put in place measures that help and make a really big difference, and I'm committed to doing that, but we also want to ensure that what we do is affordable and doesn't add to our difficulties today or tomorrow.
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