spiralling costs Energy, healthcare and motor tax cuts on table in new Government proposals
Plans to help ease spiralling costs of electricity, healthcare and education
A range of measures aimed at reducing the cost of energy, healthcare and education are being considered as part of the Government’s plan to address the rising cost of living.
The three Government leaders have asked ministers to draft policy proposals aimed at easing the financial burden sparked by record rates of inflation.
It comes as the European Central Bank hinted that interest rates could rise later this year, which would increase pressure on mortgage holders.
Central to the Government’s plan to address inflation will be the cost of healthcare, with talks under way about reducing emergency department charges and prescription fees while also reducing the threshold for the Drugs Payment Scheme.
The Government is also examining the limits for medical cards to allow more people to claim the benefit.
There are also plans under discussion to increase the amount of tax-free money employers can gift to their employees, from €500 to €1,000 on a one-off basis.
The €100 energy credit – which is due to be taken off electricity bills in March – may also be increased, though the level has yet to be decided and there are also concerns over the impact a hike in the rebate will have on inflation.
Under plans being suggested by senior government figures, the credit could be almost doubled to €200.
College fees for third-level students may also be reduced under proposals being developed by Higher Education Minister Simon Harris.
Education Minister Norma Foley yesterday announced Leaving Cert and Junior Cert fees will be waived for this year’s students.
There are also discussions in Government around reducing Vat on energy costs and certain foods, with some sources suggesting cuts may be targeted at healthier goods.
However, there are concerns over EU rules on Vat which restrict how long a product can be taxed at a reduced rate.
A reduction in motor tax is also on the table, but there are fears the Green Party will resist such a move.
The €55 driver licence fee and €75 charge for renewing a 10-year passport are also potentially up for review.
Social Protection Minister Heather Humphreys is examining whether the fuel allowance season could be extended by a number of weeks to allow people to draw down more money under the scheme.
A Fine Gael source said there is “total agreement among the party leaders that we need to do more”.
“Fine Gael favours a broad approach that would benefit all households, recognising the fact that middle-income households are struggling with significant bills such as childcare, mortgages, rents etc,” the senior party figure added.
Meanwhile, a Green Party source said they favoured a “targeted approach” aimed at people on lower incomes.
Fianna Fáil sources have warned there is a “thin line” between addressing the cost of living with government interventions, and contributing to rising inflation.
“The cost-of-living issue is very hard to manage politically, but the Government is very conscious of it and don’t want to contribute to inflation getting worse,” the source said.
Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath have been tasked with drafting a list of potential measures which could be introduced to address the cost of living crisis.
The powerful Cabinet Committee on Economic Recovery and Investment will meet next Thursday to discuss measures that could be introduced.
In the Dáil, Tánaiste Leo Varadkar said the cost of living is rising faster than it has in “20 or 30 years” and that he is aware governments in other countries are introducing policies to address the issue.
“Everyone is feeling it in their pockets and of course those on the lowest incomes are feeling it more so than those who are not, and the Government gets that,” he said.
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