Public transport fares cut by 20pc, energy subsidy up to €200 but warning cost of living package is ‘sticking plaster’

Transport, fuel and medicines bills to be reduced with measures

Michael McGrath and Paschal Donohoe

Hugh O'Connell, Gabija Gataveckaite, Charlie Weston and Senan Molony

Price rises of almost 5pc are set to continue this year as the Government’s €500m plan to tackle rising costs has been described as a “sticking plaster”.

As the Coalition unveiled its half-a-billion-euro plan to ease the financial burden on people, experts warned the ongoing cost-of-living crisis is set to punch a €2,000 hole in the average household budget this year.

Surging costs of energy, motor fuel, rents, health insurance and creche fees are pushing consumers to the edge financially.

It comes as Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath last night revealed plans to increase the energy credit to €200 including VAT which will be deducted from all household electricity bills in April, alongside a 20pc cut in public transport fares from the end of April for the rest of the year.

There will also be a €125 lump-sum payment for 390,000 households on fuel allowance. In addition, an already-planned €10 rise in the Working Family Payment will be brought forward from June to April, and the threshold for the Drug Payment Scheme will be permanently lowered to €80 per month.

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Regarding the cut to public transport fares, Minister McGrath confirmed that people who had already purchased a yearly ticket would be able to claim back some of the amount already paid.

“The decision that we’ve made is a 20pc reduction. Minister Ryan expects it will take effect by the end of April. Precisely how it interacts with any changes in charges from individual providers, he will answer that and provide more detail in relation to that,” Mr McGrath said.

“Also, just to say that for people who have purchased a yearly travel card ahead, Minister Ryan’s intention is they will get an extra credit to allow for the reduction in the fares that were announcing today.”

He added it was “undoubtedly a significant intervention by Government that will make some difference”.

Mr Donohoe said that the total Government package to help with the cost of living, taking into account Budget Day measures, is more than €1.5bn, with the cost of the new measures being €505m.

He denied that it was a mini Budget, saying that the scale of the measures was a “very low scale” compared with Budget Day.

The three Coalition leaders did not attend the announcement of the measures in Government Buildings last night which followed an earlier meeting of the Cabinet Committee on Economic Recovery and Investment where the plan was signed off.

The package was unveiled after weeks of speculation about other possible measures which included possible cuts to motor tax and student fees, neither of which transpired.

Reacting to the package, the Opposition warned that more would be needed in the months ahead.

Labour Party leader Alan Kelly last night told the Irish Independent: “I warned the Taoiseach they’ll have to return to this is a few months’ time. This is a sticking plaster. It’s a drop in the ocean.

“The stories I’m hearing are heartbreaking – people having to leave groceries behind at the till and ration the heating.

“The frugal Finance Ministers missed the mark with this package, it needed to be a mini Budget of over €1bn on new measures. Instead it’s old wine in new bottles.”

Policy adviser at the Consumers’ Association Dermott Jewell said people were being hit hard.

“Households will have to prepare for a minimum of €2,000 in additional expenditure on energy, motor fuel and food this year. Trying to find that amount of money is going to be next to impossible for many.”

He added that some people were cutting back on the heating to make ends meet.

And price pressures are set to remain on consumers for a while yet.

Irish prices are to rise by close to 5pc this year, the European Commission predicts. This is well above the EU average.

And there has been a doubling in the number of people struggling financially as the cost-of-living crisis deepens.

Close to one in five people say they are having difficulty making ends meet, with many being forced to cut back on essentials such as food, according to Red C research carried out for the Society of St Vincent de Paul.

The research found that 18pc of those polled said they were in financial difficulty.

This compares with 9pc saying they were struggling financially when the same question was asked early in 2020.

Rampant inflation has led to calls for the Government to do more to cut the high cost of living in this country, which has been blamed on costly taxes and low levels of


Household costs such as rent, mortgage rates, gas and electricity are a staggering 78pc above the European average, according to Eurostat.

Government charges, such as stamp duty, carbon tax and VAT add hundreds of euro to the cost of living in Ireland each year, across energy to banking and insurance.

Daragh Cassidy of price-comparison site said many costs, such was the spike in world energy prices and Brexit, are outside of the Government’s control.

But he said there were

numerous ways in which the Government added to the cost of living here.

“At 23pc, our standard rate of VAT is one of the highest in the world.”

However, there were other charges such as carbon tax, excise duty, stamp duty and surcharges which added to the cost of living in Ireland too, he said.

“Despite Government protestations, these are all within the power of Government to reduce or abolish if it wanted to,” Mr Cassidy said.