Cost of living crisis is an emergency... Budget 2024 must respond to it

WE are fierce fond of declaring national emergencies about all manner of things these days.

The housing crisis, naturally, is a ‘national emergency’.

The climate crisis, ditto.

Not so long ago, Ireland’s building regulator claimed the country faces a “national emergency” of construction regulation, while the ISPCA declared a “national emergency” over the number of dogs needing new homes.

When it rains too much, flood victims declare national emergencies, when it doesn’t rain for a while, farmers call it a national emergency.

Of course, ‘emergency’ implies that Government or council officials will be on the spot in minutes, sorting out the problem as easy as saving a cat from the roof of a blazing house.

We really need to save the phrase for when it is absolutely necessary, otherwise it loses all sense of meaning.

And so, with Budget 2024 now just three days away, I will declare with cast-iron certainty that this country is in the grip of a fearful cost-of-living crisis, and if the Government doesn’t grasp this national emergency on Tuesday, the repercussions for it will be huge.

Now, you might think that this goes without saying; that our politicians have their fingers on the pulse of their constituents’ concerns, and the throbbing they feel is the nervous tension created by ever-rising costs, and an income that cannot keep up.

But, actually, it really does need to be said.

The mood music coming out of the Government in recent weeks, right from the top, has been quite alarming.

You get the sense that they feel they did their bit in the last Budget, when the cost-of-living crisis, the war in Ukraine, and the sky-high energy prices led to a raft of one-off measures to relieve our pain.

You get the feeling that the politicians think we have moved on and accepted the spiral of prices, tightened our belts, and do not need any more crumbs from the top table.

Cost-of-living crisis? What cost-of-living crisis?

That would be a very foolish mistake.

Because ordinary people, families, workers, young and old, are struggling to cope with the new landscape. The problem hasn’t gone away, you know.

When inflation has been roaring above 5% all year, and your income is failing to catch up, or even flat-lining, that is bound to affect your mood, in a way that a TD perhaps cannot comprehend.

Certainly, our Taoiseach seems to give the impression that the Great Cost-Of-Living Crisis of 2022 has not stretched into 2023, and will be a thing of the past in 2024.

One-off measures in next week’s Budget “won’t be as big as last year,” Leo Varadkar warned this week, when the cost-of-living crisis is most definitely just as big as it was last year.

“There will still need to be one-off measures, but it isn’t going to be possible to have them at the scale that we had them last year.”

Really? Why the hell not?

The Government’s coffers are busting with the money hard-working people pour in. Ask the dogs on the street and they will tell him: The cost-of-living crisis is as bad now as it was a year ago.

Look at the price of petrol at the pumps. The €2 a litre mark could be breached in the weeks ahead.

Look at the soaring cost of home oil, just as the nation hunkers down for a cold winter.

Is anyone out there looking forward to their first electricity or gas bill of the winter? Nor me.

Rising prices were a national emergency a year ago, and are still a national emergency today.

If Finance Minister Michael McGrath does not reflect this when he stands up to deliver his Budget on Tuesday, it could be the most costly error he ever makes.

Just because people have spent a year in the midst of this crisis, it doesn’t mean this situation has been ‘normalised’, and that politicians can move on to the next national emergency, when this one is still very much live.

If the Government wish to stick to their one-off measures to tackle the problem - such as handing out three €200 energy sweeteners as they did last year - that’s fine by me. Or if they prefer to do something more permanent, such as reducing the Universal Social Charge (USC) or income tax, then that is fine too.

This is no time for beggars to be choosers; we just need a helping hand right now.

There is an interesting political point to be made on the USC. It was introduced as a ‘temporary’ measure by Fianna Fáil in 2011 after it tanked the economy and needed a cash quick cash grab from the plebs.

However, the only party that seems to have been intent on abolishing it since then is Fine Gael. Then again, that party has been in power for the last decade and has failed to do so.

Now, for the first time in more than a decade, Fianna Fáil are back delivering a Budget, and Mr McGrath has a chance to at least assuage a little of the pain the USC delivers to each pay packet. Will he do so?

Look, I appreciate the Budget is a balancing act in many ways, and the demands on the Finance Minster are vast. Too much of a giveaway will only stoke the fires of inflation, just as we have it under a semblance of control.

But, I repeat, the cost-of-living crisis is still a national emergency. If the Government do not take hard action to address it on Tuesday, they will be making a big mistake ahead of a round of local and national elections that are coming down the tracks.