Ged Nash: Families Skipping Meals as VAT Aids Hospitality

Isolated, often at home, my child sees me constantly stressed and budgeting, worrying about bills and arrears and going without the basics. Tánaiste, the words of one parent from the Barnardo's Cost of Living Survey published this week. One in five families are cutting back on food due to the cost of living. Nearly half skipped meals or reduced portions so their children would have enough to eat in a rich country. 30% felt at some point they didn't have enough food to feed their children. So listen to what parents said. I quote, food for myself, I'm having to go without. The amount of food we buy had been significantly cut. I could go on. And today we have more bad news for families up and down the country. The ESRI has warned that food prices will rise higher because of second round effects from the Iran war. Families that are already struggling will be hit again with higher energy bills and higher grocery costs in the autumn and winter. Electricity bills, as you know, are rapidly rising. An 8% hike from Electric Ireland in July. That's an extra €140 a year on average family bills. Flow gas plan to increase their prices by 10% and we've already seen prepaid power up their prices in May. On energy costs, you've nothing to offer. Not since this government bought its way to the last election. I could ask you, Tonis, what has the government done since to ensure lower food, energy and grocery prices? And the truth is a big fat nothing. Lots of talk about competition and the CCPC, but nothing of substance has been done. And if you look at last year's budget, let's recall what you didn't do. No indexation of income taxes, no energy credits, no increase in children's allowance and a cutting of one off cost of living payments. The PAYE workers and hard working families were mugged. Mugged by burger barons and the highly profitable hospitality sector. And your government made the choice, made the choice to give them a vac cut. And we know, Tonis, to where your focus has been for much of the last week. Giving the red carpet treatment to influencers who came to the department to talk to you about your wealth account plans. Contrast this with the carpeting received by PAYE workers in last year's budget. Let's not forget the endless reports, the endless meandering to the media by various ministers about reports of inheritance tax cuts, when all the while parents are focused on feeding their children and making sure that they don't go hungry. So Tonis, the temperatures are rising, but so are prices. What will you do? What will you do practically to help lower food prices? Next week, the lower VAT rate kicks in and tourists will be arriving from all around the world and eating in our restaurants. That's a good thing. We'll have EU diplomats from across Member States descending in Dublin. They'll be having their takeaway coffees and families that can afford to might be going out to get a burger this summer if the good weather continues. So will they be paying lower prices, Tonis? So will you directly call on the hospitality sector to commit to passing on the VAT cuts that you're about to introduce through to lower prices for customers across the country? I really don't like burgers, but we'll get to that in a second. So look, thank you, Deputy. This government has taken a number of actions to endeavour to assist people. And can we just remind ourselves, the country that we do live in, there's over 2.8 million people who got up and went to work this morning, highest number ever. Figures from the CSO show that the average weekly wage is now over €1,000 a week. Yes, we're living in a time of huge global uncertainty, but thank God we have resources as a country to be able to intervene. You asked what did we do to assist people in terms of fuel and the likes. We did deliver the largest or second largest package in the entire European Union in terms of direct assistance. And that didn't just help specific sectors, though it helped them too. It helped hauliers, it helped farmers, it helped farm contractors, it helped people working on road transport. It helped everybody who goes to work and needs to put petrol in the car or diesel in the car. But also, and I've made this point to you before, it reduced inflation by 0.6% a month than what it would have been. So the cost of food would have been 0.6% higher from an inflationary point of view in your Tesco's, in your Dunn's, in your Supervalues, in your shops and lounges, were it not for the package the government put in place. So that can't be overlooked, that's not my view, it's the view of the Chief Economist and the economic analysis of the package we put in place. We increased the fuel allowance. Next week there's something else happening, by the way, not just is VAT being reduced, the carers allowance is being expanded. There'll be thousands upon thousands of carers who get the reduced rate of the carers allowance who might now qualify for the larger rate, and there'll be some people who get no carers allowance who qualify for the first time ever. That's happening next week. We also, as you know, introduced the largest ever increases in child support payment, over 330,000 children benefiting from these increases. The minimum wage has increased since 2020, the national minimum wage has actually increased by 40% from 10 euro and 10 cent a day, sorry, to today's rate, excuse me, of 14 euro and 15 cent as well. And we reduced people's VAT, another 9% VAT, we reduced people's VAT on gas and electricity bills to 9% as well. We've reduced college fees, we've brought in free hot school meals, free school books, free GP care for under-8s, we've extended the back to school footwear and clothing allowance to preschool for the first time ever. So this government's taken a number of actions to help people. But the decision to reduce VAT in the hospitality sector is a really important one, and also the hairdressers, don't forget the hairdressers too, 48 million euro is the cost of the hairdressers, like the beard trimmer. This will benefit, there's over 150,000 people working in the hospitality sector, Deputy Nash, over 150,000 people. And this cost, and I'm being very honest, this isn't about reducing the cost of a cup of coffee, I'm not going to lie to anybody here, it's not about that at all. This is about supporting employment. It's about actually saying to the coffee shop owner, to the restaurant owner, to the pub that might do a lunch in rural Ireland, it's about saying we're helping you with reducing your tax bill because you're helping us in terms of providing employment. And remember as well, you mentioned the old beef barons regularly, or burger barns, whatever you call them, but the CSO data actually shows that 99%, 99% of those working in food catering and accommodation are SMEs, and half of those are micro enterprises that have less than 10 employees as well. So this is an initiative that will disproportionately benefit rural Ireland, regional Ireland, small businesses and micro enterprises. It's the right decision. I look forward to standing with coffee shop owners, cafe owners, hairdressers, restaurant owners and saying we took this decision to support jobs. Thanks for going through some of your greatest hits of the last few years, but the question is, what will be done for working people this year? You have acknowledged that as a result of the untargeted VAT cut for the hospitality sector, PEYE workers had to do it out and go without indexation last year, which means that more of the money they earn this year, the small increase they get from their pay increase, will by and large go to the tax man. You said earlier on in the House that that's wrong, you've got to make up for that, but with all of the promises we've made over the last few weeks by various ministers going through the media rounds, then the tax package for this year seems to me to be already swallowed up. You and I tend to have a difference of opinion about how we can best support the small cafes and restaurants around the country that we need to support. This blunt instrument, expensive blunt instrument, is not the way to do it. The way to do it is to introduce targeted energy supports, to reform the outdated commercial rates system, to address some of the structural cost issues in our SMEs across this country. A blunt instrument like this that's costly, that will disproportionately benefit franchises and the big chains, is not the way to do it. I said to you earlier, W Nation, I'm happy to say it again, I don't doubt your bona fides or that of your party in wanting to support small businesses, I don't doubt it at all, we just have a different policy approach to this. But I did also make this point, we had an election and in the election I stood in coffee shops, I stood in restaurants, I stood in pubs that served food, I stood in hotels and I said to people, if you put my party back in government with the Fianna Fáil party did equivalent, we're going to reduce your VAT rate. So it's a promise that we made to people right across this country, it's a promise we're delivering on, a promise made, promise kept, promise delivered and it's a permanent reduction in terms of costs, taxes on employment that specifically impacts regional and rural Ireland and small businesses and micro enterprises. You know well what we're thinking of doing in the next budget, we'll have the summer economic statement next month, that will outline the amount we'll have for additional spending, it'll allocate the amount that we will have in terms of a tax package, there will be a personal income tax package. I do believe though we have to look at the budget in the round, tax can do some things and it should and I think there's too many people paying the higher rate of tax at too low an entry point, but also there's other things we can do on the spending side to structurally reduce costs that families face, including workers that you referenced, childcare being an obvious area too. So we'll be going through the budget looking at that, the summer economic statement will be the next chance that we have to take stock in next month.