Budget 2023: Electricity price caps are simply too risky, says Finance Minister Paschal Donohoe

The cabinet will not bow to opposition benches’ calls for energy price caps to cushion the cost-of-living crisis because it would pose too much “risk” for the economy, Finance Minister Paschal Donohoe said.

Meanwhile, at a conference in Limerick, tanaist Leo Varadkar told cash-strapped business owners that not only will Ireland continue to spend tens of millions of euros on military aid to help Ukraine defend against invading Russian soldiers, but its spending will likely increase due to the war continues.

Speaking at Thomond Park, home of Munster rugby, the Finance Secretary vowed he would not drop the ball on Budget 2023 but warned it would not be a panacea to the cost of living crisis.

Minister Donohoe ruled out energy price caps in the budget, saying: “Any measure we introduce must be affordable, sustainable and should not be a source of new risks and we see significant difficulties with a cap.

“They’re actually asking the taxpayer to cover all of the costs related to the price of something that’s currently uncertain,” he said.

While fiscal measures will “put money back in people’s pockets,” Minister Donohoe said he will not siphon off the country’s accumulated surplus because the government is “collecting more money in taxes than we currently spend.”

“There will always be demands on us to do more and spend more, but we are in really uncertain times, we are dealing with a crisis caused by a huge war in Europe and we cannot be sure , for how long this will continue,” explained Mr. Donohoe.

“That’s why we want to make sure that we can continue to react into 2023 if things get more difficult or if we have to deal with new risks,” he added.

Tanaiste acknowledged that “people are worried and see their incomes being eroded by high prices,” but he promised: “You will see very significant government intervention on (Budget) Tuesday to help people and families with the cost of living.” help, (they) We will see the results of this within weeks, but it will not just be one-off actions, there will be help throughout the next year.”

Ireland has so far spent 55 million euros on military aid to Ukraine, but Varadkar said spending on Ukraine is likely to increase as Ireland does its part to help Europe fund its way out of the Russia-induced energy crisis, by funding Ukraine defensive.

“Yes, support for Ukraine will continue, if anything, it will increase – let’s not forget that part of the reason we are facing this cost of living crisis is that Vladimir Putin is using energy and food as a weapon of war.” he said Mr. Varadkar.

“If we don’t help Ukraine, it won’t stay here, I guarantee you (Putin) that he will threaten other countries, he will threaten more of his neighbors, and that will lead to greater risk of hunger around the world and greater energy.” We are leading to a crisis for the rest of Europe, so it is imperative that we stand by Ukraine – it is not just their war, it is ours too.”

Mr Varadkar told reporters Ireland would grant asylum to Russian citizens, including those fleeing conscription in Putin’s army.

“Yes, the way it would apply to any Russian person fleeing Russia is like everyone else: they have the right to apply for international protection and if they make an application, it will be examined , and if their story stands, if not, they will be granted international protection, and if not, then not,” Mr Varadkar said.

“The same rules that would apply to anyone (others) would apply to Russian citizens, so those fleeing Russia have the right to apply for international protection, they don’t necessarily have the right to get it, they have to scrutinized and their story needs to be verified,” he added.

Mr Varadkar was also responding to reports of a dispute over healthcare spending and concerns that the budget package would leave little money for plans to expand free contraception for women, build a state-funded IVF service or further reduce/eliminate hospital fees.

“Negotiating the health budget is a real challenge every year,” he said, adding that it is “absolutely the government’s intention to extend (free contraception) to women over 24.

“But I should say that the new system has only been rolled out in the last few weeks so I wouldn’t expect it to be expanded in January or February (2023) but certainly over the course of the next year.

“You’re going to see a significant increase in healthcare budgets next year, you’re going to see more money for more staff and development – will it be all we’d like to do, no, but unfortunately that’s never going to be possible,” he added.

Speaking at a conference of invited small and medium-sized business owners, Tanaiste said in Tuesday’s budget they would not forget: “We will not allow viable businesses to go to the wall in this period of high energy prices, which hopefully won’t last too long. although we must allow for the possibility that it could be extended.”

https://www.independent.ie/irish-news/budget-2023-electricity-price-caps-just-too-risky-says-finance-minister-paschal-donohoe-42014171.html Budget 2023: Electricity price caps are simply too risky, says Finance Minister Paschal Donohoe

Fry Electronics Team

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