Thursday 17 October 2019

Varadkar in U-turn on carbon tax rebate due to 'expense, difficulty'

Leo Varadkar was accused of ‘showboating’ at the UN. Photo: REUTERS/Lucas Jackson
Leo Varadkar was accused of ‘showboating’ at the UN. Photo: REUTERS/Lucas Jackson
Cormac McQuinn

Cormac McQuinn

Households won't get a cheque in the post to offset the cost of carbon tax increases after the Budget, Taoiseach Leo Varadkar has said.

Mr Varadkar told the UN Climate Action Summit that Ireland will ring-fence funds raised by carbon tax hikes for efforts to fight climate change.

The move could bring in almost €130m in additional revenue next year if there's a €6-per-tonne increase in the tax.

That's the sum that's been signalled by both by Fine Gael and Fianna Fáil.

However, Mr Varadkar confirmed that the Government did not plan to return these revenues to households in the form of a dividend cheque as had previously been mooted.

Starting his five-day mission to the United States, Mr Varadkar rejected suggestions from Solidarity TD Ruth Coppinger his efforts at the UN this week amounted to "showboating".

Ahead of his speech to the UN, Mr Varadkar said the Government intention was that extra funds raised by carbon tax increases would be "ploughed back into climate action".

He said it ias a "very serious commitment" that would raise "billions" of euro over 10 years.

Asked about the previously touted carbon cheques for households, Mr Varadkar said the Government no longer intended to do this.

He said this option had been considered, but, like the water conservation grant that was brought after water charges were introduced, it would be "quite expensive to administer". He said there were a number of downsides, including determining how much each household would get.

"So it can be done, but it's quite expensive to do it, quite tricky," he added.

"The alternative that we went for was to give the money back to people in a different way.

"To give the money back to people in communities, specifically to take actions that will reduce our emissions."

He gave examples including the insulation of homes, use of LED lighting, greener farming and renewable energy.

"We think on balance, that's the right way to go," he said.

Mr Varadkar also said it was a "possibility" the fuel allowance wuld be increased in the Budget as part of measures to mitigate the impact of carbon tax increases.

He said the ring-fencing of carbon tax proceeds would help people make a "just transition" away from fossil fuels.

"That's helping people who may lose their jobs in old industries to find new ones.

"It also means protecting those most vulnerable to fuel poverty, from increased energy charges. So that would include, for example, the possibility of an increase in the fuel allowance," he said. "All that has to be worked out and finalised" for the Budget.

Irish Independent

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