Richard O'Donoghue: Cap Fuel Tax to Protect Households

Okay, thank you. I'm going to go myself now. Okay, so the opening statement was on the fuel protest and the implications of who roared loudest got subsidised. I was actually on the protest myself. It wasn't farmers, it wasn't hauliers, it wasn't construction workers, it was PAE workers were on the pickets as well, over the cost of fuels for them to get to work. So it was all sectors were actually on the fuel protest and I was actually up based in Fines myself and I was there for five days myself and I've never seen anything like it. I've seen people on the protest that I've never seen ask for anything in their lives. I've said it before, these are people that would actually give you the shirt off their back and wouldn't ask you for theirs. These are the people that I've never in my lifetime and the age group were from all ages but there was a lot of elderly people on the protest with their children and their grandchildren on the protest on this. I'd asked at the time that a measure that would have actually to me would have actually separated it all was that if there was a cap put on the fuel prices it would have actually there would have been no monies given to the haulier sector because it would have actually been introduced in the cap. So what I actually asked for was a 170 on diesel alone. So by giving 170 at a cap that means you took your taxation which was the same that was actually six or eight weeks beforehand was at 170 so the government took their tax and once it reached 170 you will pay an increase in the cost of fuel but you wouldn't pay a tax on it and at today's rate it's a 195 at the pump at the moment and if they'd done that it would be at 182 at the pumps at the moment which would have benefited everyone from the point of view of haulier system and transport systems by time they'd have the VAT back it was the same as giving them the 192 of a cap. It would have brought them back to 156 after that and by the time they get their 1200 euros per month per vehicle it would have brought them back to 138. It's exactly what 170 would have done across the board but everyone that had a vehicle in this country would have benefited. I'm not against the EVs I'm not I'm not against anything like that but I have to deal with what's here today and the average vehicle that's here today is between 2010 and 2018 is the average vehicle that are actually on the road that people can afford and they are fossil vehicles they're not electric vehicles and I'm looking at inflation and I'm looking at the retrofit and Michelle you were talking about it earlier on is okay when the retrofit grants were brought in and they brought in the different grants for the different households I'm a building contractor I was on site this morning before I came here and I can tell you this morning on plastic products alone at the moment I've been just told as a 16% increase that storage pipes waste pipes anything to do with oil-based products. Since January we've had a 38% increase in insulation and we're talking about retrofit so all the grants have been ate up by inflation all due to fuel costs fuel the lack of fuel whether it's Iran we don't get our fuel from Iran but because of the world market it's been pulled from other places where we get our fuel but to help everyone I believe that if there was a system put in that there was a cap put on the fuel so be proactive instead of reactive put in something pay your tax up to a level the same as you pay income tax at 22% or you pay your 40% all these caps can be put in place without affecting the purse and we can pay an increased cost that's what I'm trying to see collectively that affects them targeting places doesn't work because when you target something you're going to leave somebody behind so why can't we be proactive and put in a system that actually works that it can actually help everyone even on the short term the lowest earner and and it was said here and that people can run a household on a single social welfare payment people can't run a household on two people working in a household payment that's two people working so that's why we've got to come up with a system that targeting is it takes too long and it takes too long to get out there so why can't we come up with a system that one thing will actually help all and it will keep down transport costs which are huge it will keep down food production which comes 80% of it comes through the Dublin port which which comes in this country again which is down to transport costs or bus services which you don't have in the likes of rural Ireland it actually will help neutralize that as well so what I'm looking for is a collective something that will actually help everyone on a short term even and also we need to put in something from budget to budget so any business that's in business can forecast for 12 months and we have a system in place wherever the caps are that the system cuts in when we hit this level and it makes them forecast that business for 12 months which stops fluctuation it's fluctuation and short to supply that drives inflation and that's why no regardless how much you rise the minimum wage somebody has to pay for it it's consumer pays for that at the end of the day when it comes full circle so you rise it on this side as as an employer it goes on to the person that I work for so it's added on so if you put it on to hospital it comes around in a circle as well so rising wages is not helping bringing back inflation and cost helps so they're the targets that we need to come into so I'd like to hear Jerry if you want to just come in on just see what would you think that could help one thing that could help everyone even in a short term and thank you very much deputy and just in relation to your opening remark look no doubt there were PAY workers on there on the on the protests I mean as I said at the very beginning we represent approximately 500,000 workers in the Republic and 200,000 in Northern Ireland and what I suppose the package that was implemented then predominantly benefits certain sectors of the community and again just to make the opening question if it was members of SIP to or unite or any other trade union does anybody think that there would have been the same response taken by the government I don't think there would and that's the point we're making we said we had we were keen to engage with the government on the on the on measures that we see as necessary and I would defer to Tom McDonald just in relation to the question on on on on your proposal in relation to fuel prices but just your final comment deputy and just in relation to the implications of the rising minimum wage and rising wages the European Commission did a very interesting report at the beginning of January and it looked at price increases over the last number of years and cost competitiveness and in relation to Ireland it concluded that the increase in prices over the last number of years had more to do with profits than to do with rising wages no that's not to say that there are not certain business communities that are facing challenges we absolutely recognize that but it's going back to issues like the 9% VAT rate for the hospitality sector that is not something that we think should be done I think it's the it's a bad you we think it's a bad you just one point that before I go to Tom and again I'm on the time is a 9% VAT rate on something that you paid say a plate of food that you paid five euros for and you're a 9% VAT rate on that that same plate of food now is costing twelve so if you looked at the VAT rate on the part you were actually giving at the time you've actually doubled it so anything you're buying today has doubled in cost so the VAT rate on everything is on an inflatable cost so the VAT intake at 9% is still more than what it was on thirteen-and-a-half percent twelve months ago and the cost of building a house today which is 200 euros a square foot now and rising five years ago was 120 euros a square foot so you have an 80 euros increase in five years so the VAT rate is on an inflatable cost I don't get anything extra anyone else I buy a glass of water for a euro and I pay my VAT on it I pay two euros for the glass of water if I'm paying 23% I'm now paying 46 cent extra for the same glass of water we get nothing extra but the revenue get it Tommy if you'd like to come in just I'll give you one minute just because I want to go around the table again Just two points, one on your proposal and the other on wages in terms of wages if wages don't increase by more than inflation or at least by as much as inflation and you know living standards are falling for the VAT, look at the population because for most households it's the wage that is their income and if that's not adequate or it's falling behind then we have a problem. In terms of your proposal regarding the price cap or the cap on the tax above I think it's a very innovative idea for sure and I suspect what would happen in practice is that some of the benefit would go in terms of petrol purveyors charging prices anyway they would then some of the benefits some of the benefit would go to you know purchasers of petrol and diesel for sure and money would be lost to the exchequer which is which is damaging from the public finances I don't I wouldn't be able to tell you with any kind of certainty as what that breakdown would be but it would certainly be something that's that's interesting to research on I'm sure. On the basis of this, I'm not interfering with the public purse because the public purse would be the exact same as it was ten weeks ago before we had the issue with the Iranian war so I'm not interfering with any taxes or any of any of the taxes that were taken out of fuel up to ten weeks ago it's the increased cost that we cap the tax on so that gives people a chance which is a roughly 13 cent a litre at the moment it will bring it down so we're not interfering with the tax purses from ten weeks ago it's the same so there's no problem with the income tax that was taken up to ten weeks ago it's on the inflatable cost at the moment which allows everyone a bit of a chance and stops the gouging from a lot of the oil companies as well and different things that are coming in around the country. We'll come back to you again in a few minutes Tom, we'll come back to you again in a few minutes thank you