The cost-of-living crisis in Ireland has become a grievous financial burden for most, but especially for those who depend on fixed incomes including state pensioners. Many individuals and families are continuing to struggle to meet their basic needs.
As we are aware, the VAT rate increased from 9% to 13.5% on the 1st of September with our members already feeling the pinch in their pockets. The increase in VAT has affected supplies of certain food and beverages in restaurants, take-aways and catering, hairdressing and beautician services, admissions to cinemas and museums, as well as holiday accommodation. Ireland now has the third-highest hospitality VAT rate in Europe.
As well as the increase in VAT we were also faced with the double whammy of an increase in fuel prices. Petrol excise rates rose by 7 cents per litre and diesel prices increased by 5 cents per litre. This was the second of three planned tax increases on motor fuel, the next increase coming into effect on October 31st.
Sinn Fein Finance Spokesperson, Pierce Doherty, recently appeared on RTE Radio 1 and responded to Pinergy Company’s promise of cutting energy prices from October. Pierce claimed that “wholesale electricity prices in Ireland have fallen by 64% in the last 12 months” yet Irish energy companies choose to continue to charge peak prices. He has called for an investigation by the energy regulator and advocated for the application of windfall taxes and levies on such companies which would follow in the footsteps of other European countries.
The overall inflation rate in Ireland has led to a general increase across the board, while social welfare rates remain exceptionally low and highly inadequate. Higher costs for housing, healthcare, and utilities have strained financial resources placing older people, and low to middle income families in financial insecurity or at risk of poverty. This situation has forced people to make difficult choices, such as cutting back on necessary expenses and sacrificing their quality of life.
It is difficult not to reflect on the Paper entitled “Survival of the Richest” published by Oxfam in January of this year. The paper found that the richest 1% have nearly twice as much wealth as the rest of the world put together.
Oxfam has called on governments globally to:
- Introduce one-off solidarity wealth taxes and windfall taxes to end crisis profiteering.
- Permanently increase taxes on the richest 1 percent, for example to at least 60 percent of their income from labour and capital, with higher rates for multi-millionaires and billionaires. Governments must especially raise taxes on capital gains, which are subject to lower tax rates than other forms of income.
- Tax the wealth of the richest 1 percent at rates high enough to significantly reduce the numbers and wealth of the richest people, and redistribute these resources. This includes implementing inheritance, property and land taxes, as well as net wealth taxes.
We continue to advocate for all older persons in Ireland and hope that Budget 2024 will bring significant change in reducing the financial burden for all.