McGrath defends Cost of Living package: 'It’s not going to change the world, I know that'

THE Minister for Public Expenditure and Reform, Michael McGrath, has defended the Government's newly announced Cost of Living package following criticisms that the measures do not target those who need help most.

“The Government had to make decisions that we could implement quickly,” Mr McGrath said.

“There are a lot of people who are working who are above the income eligibility for social welfare who are struggling. I think they deserve some support as well.” 

One of the measures under fire is a €200 energy credit that will impact over two million households.

Speaking this morning on 96FM’s Opinion Line, Minister McGrath said that the credit is being introduced because cutting energy taxes wasn’t an option available to Government.

“It is complicated. Ireland already has a derogation under EU rules. We apply a 13.5% rate of VAT on energy bills. Most other countries apply a standard rate which would be much higher,” Mr McGrath said.

“If we had gone below 12%, which is what you would need to do to make a meaningful difference, we would have lost our derogation to go back up to 13.5% and we would have had to go up to 23.5%.

“So, we decided to go with the reduction in the electricity bills. The cash saving will be €200 including VAT.” 

Mr McGrath added that the credit will apply in the March/April billing cycle and that people who use a pre-pay metre will benefit.

The Cork South Central representative said that he will donate his credit to St Vincent de Paul.

Acknowledging that elements of the package won’t apply to some citizens, Mr McGrath said that the Government had to try to strike a balance.

“We have a national debt that is well over €230bn. We have to use our judgment. We’re not able to do everything,” the minister said.

“The centrepiece is the €200 reduction in the electricity bill. It’s not going to change the world, I know that.

“I’ve listened to some very hard stories over the course of this week. People saying that they are sitting in the cold. 

"I’ve heard lone parents speak about having to decide between buying food for their children or turning on the heating.

“We have a safety net within the social welfare system and it’s called the exceptional needs payment. If people are genuinely struggling and need assistance please do reach out.”