The government wants to “offset” the increase in the carbon tax as calls for a scrap tax increase


Leaders have pledged to develop a mechanism to ensure next month’s carbon tax hikes are offset and do not contribute to deepening the cost-of-living crisis.

Aoiseach Micheál Martin and Tánaiste Leo Varadkar both say the cost of the tax hike will not be felt by consumers.

Details on how this will be achieved are still being worked out, but the government insists on pushing ahead with carbon tax hikes next month.

This is despite growing internal unrest over the tax hike, which goes into effect on May 1st.

Taoiseach, Tánaiste and Green Party leader Eamon Ryan will meet in the coming weeks to also plan a medium-term cost-of-living response package that could feed into the preparation of the 2023 budget in the autumn.

Mr Ryan is set to announce a range of measures around the Easter holidays, including an expected reduction in the public levy on energy, which could save households €60 a year. He will also outline a range of energy saving techniques being developed by the Sustainable Energy Authority of Ireland (SEAI).

He will also point to an increasing installation of smart meters, which will allow people to use devices at more convenient off-peak hours.

At an event yesterday, Mr Martin and Mr Varadkar said they would not make a series of reactive decisions, leaving them tinkering with inflation measures “every few weeks”.

However, there will be a small transitional measure towards the end of the month, senior sources said, but it is likely to be of limited use.

The Tánaiste stressed that high inflation was likely to last “for years rather than months” and not be short-term in nature.

He said price increases are the “symptoms” of an underlying condition that needs to be addressed in a whole-of-government approach with social partners, with a focus on pay
Politics. In return for restraint, the government could reduce the tax burden.

Fianna Fáil TDs have tabled a motion to urge the Taoiseach to scrap planned carbon tax hikes.

It comes after Fine Gael TDs tabled a motion for the issue to be raised at this week’s parliamentary parties meeting.

The Taoiseach is expected to come under pressure from party colleagues to postpone the planned increase. Fianna Fáil TDs and senators are set to discuss more cost-of-living measures, which will include the carbon tax, at a parliamentary party meeting this week.

The motion also calls for any planned tax hikes to be postponed and measures to help families struggling with rising costs.

John McGuinness and Willie O’Dea are among the TDs who have said the carbon tax hike should be postponed, while some TDs are said to be on the fence.

However, Fianna Fáil’s TDs, Paul McAuliffe and Chris O’Sullivan, and Senator Malcolm Byrne have filed a motion for the private meeting in support of the carbon tax.

Mr Byrne said there were concerns about “populist pressure” against the carbon tax.

Fianna Fáil’s motion says a carbon tax can combat rising fuel costs and their impact across the country through “targeted fuel poverty payments” as well as retrofit grants.

Government sources have insisted the carbon tax hike will go ahead as planned, which will increase gas bills by an average of €1.50 a month. The government wants to “offset” the increase in the carbon tax as calls for a scrap tax increase

Fry Electronics Team

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