THE FACT OF THE MATTER

PAUL HOPKINS

Welcome to the New Normal. That is the year of the rising prices. Electricity, gas, heating oil, petrol, diesel, second-hand cars, rents, flights, alcohol, childcare fees, health insurance, food and property prices are the big risers.

This year will be one of the most expensive in a long time as we struggle with these escalating prices. The Government’s attempts — the one-off €200 fuel payback, the temporary 20% drop in public transport tickets, school buses, a one-off increase in the welfare fuel allowance, the drug refund threshold and other bits and bobs — fall well short and are a mere ‘sticking-plaster’, as the Opposition has called the €500m. package. Mind, you, the Opposition has suggested nowt better.

Inflation, which has been upward since the last Budget, will hit the average household for at least €2,000 this year. Energy costs are rising by 29%, with home-heating oil up 52%; petrol and diesel prices up by a third in a year.

The Government spent some €35bn to nurse the health system and economy through two years of the pandemic: an additional €500m cost-of-living package seems paltry by comparison. But, as the fella says, the money has to come from somewhere.

The European Commission says the hikes are to keep coming. Prices here are to rise by up to 5% this year, well above the EU average, and will stay high before falling back to 2.5% next year.

Statistically, middle-income families are being hardest hit. These are the ones paying some of the dearest mortgages in Europe, or rents that have doubled in the past decade. And they are being brought to their knees by some of the most expensive, and rising, creche costs in the West.
According to a new poll on behalf of Vincent de Paul (SVP), the number of people struggling financially has doubled since before the pandemic, from 9% to 18% — one in six of us.

House-keeping costs are 78% above the European average, according to Eurostat.

Rural dwellers are feeling the financial pinch more than most as they heavily depend on their cars.

That 2.5% inflation figure for next year is a little too optimistic for we cannot predict where the Ukraine crisis will lead and the continued flow of Russian oil and, also, the course of the pandemic and the future of work, travel and the fate for commercial property demand and prices. Add into that murky mix Government charges, such as stamp duty, carbon tax and VAT, and it all adds hundreds of euro more to the cost of living. It’s no wonder middle-income families feel the pressure, not to mention our educated young looking for a future here when escalating rents only serve to derail our promising graduates.

It’s hard to know the exact number of us now facing a tough time. The poor are easy to assess, the hard-hit not so. The Central Statistics Office (CSO) suggests the any one with a weekly income of €275.73 or less is living in poverty and say that 15.9% or roughly one in six of all workers is poor and one in 10 retirees likewise.

As of Christmas Day last there were 250,956 children on record as poor.

And another thing: politicians talking about our minimum hourly wage being among the highest in Europe is utter nonsense unless addressed comparatively.

There is, however, some light further down the tunnel. The Central Bank sees Covid spending falling to €6.8bn this year, with a small deficit by year end of just €3.8bn, or 1.5% of GDP, helped somewhat by a carry-over from last year’s unexpected strong tax performance. By 2023, the Central Bank sees a €3.5bn surplus instead.

As I said above, the €500m. cost of living package has had to come from somewhere. Dare I suggest, our politicians, perhaps, have been looking at this ‘unspent money’ of 2023 and what they can do with it now. That said, €500m spent out of €3.5bn still leaves a great lot of cold currency that could aid this pandemic of the new poor much more than mere sticking-plaster.

Surely, our politicians’ — indeed our collective — imagination could do better to grapple with poverty and those in real need. Indeed, what happened to our Constitution cherishing every man, woman and child?

Maybe the economists know better. Maybe I am missing something here…