Thousands could be set for a substantial cash hike as the minister is expected to defy the warning over cost-of-living support

The government may dodge a call for cost-of-living cuts, Treasury Secretary Michael McGrath said.

He said his department was taking up the advice of European Central Bank governors but said Ireland had to find its own way when it came to extending aid, despite escalating public debt.

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Mr McGrath said: “Governments need to make decisions that are right for their respective countries.

“We then have to look at the bigger picture and see what we can afford and what’s appropriate.”

The latest figures show that the national debt is now 44,000 euros per person.

That equates to one of the highest per capita debt burdens in the world, with the nation now down €226 billion.

Before the Covid pandemic, it was a total of 203 billion euros or 41,300 euros per person.

The Treasury Department figures included a warning of “significant risks” to public finances in the coming years.

Secretary McGrath said Friday the surge was “inevitable” due to the pandemic.

And he said big bills are expected considering the challenges ahead.

He said: “The war in Ukraine and the associated energy price shock have triggered a cost-of-living crisis and put renewed pressure on the state’s fiscal position.”

Other anticipated costs include funding “an ambitious infrastructure plan, as well as the demographic shift and the transition of economic activity to carbon neutrality.”

But he added that facing the pressure on households’ cost of living here is “the key issue”.

And taking the ECB’s advice into account, the government is considering “different timeframes for extending different supports”.

These include extensions of supports that expire at the end of this month, such as lower fuel taxes and VAT, the €200 household energy credit and the €1.2 billion business energy support scheme.

The statement comes after ECB President Christine Lagarde this week urged governments to “roll back” measures introduced across Europe to protect people from price hikes.

“INCREASE PRESSURE”

She said the measures should be withdrawn “promptly in line with the fall in energy prices and in a concerted manner”.

And she said “any measure that falls short” would likely “increase medium-term inflationary pressures”.

Mr McGrath said the government would be “careful not to do anything that contributes to inflation”.

He continued: “It may take a while, but we want consumers to benefit from the wholesale gas price cut at the earliest opportunity.

“For the companies affected, these are economic decisions, but the sooner we can relieve consumers, the better.”

The minister said: “It is important that public finances are ready to meet these challenges. This report underscores the need for prudent debt management and rebuilding our fiscal buffers.

“The Government is committed to cultivating a vibrant and sustainable economy while ensuring we are prepared to meet the fiscal challenges ahead and ahead.”