Tuesday 19 November 2019

State is the one holding families' purse strings

TWO basic trends explain why families have less to spend these days and get less for their dwindling euros.

The double-whammy comes from a rise in commodity prices across the globe and higher taxes closer to home.

Commodity prices probably play a bigger role. A mixture of rain in this part of the world and drought in other countries has pushed up the price of many basic ingredients used in the kitchen. The Central Statistics Office calculates that a 10kg bag of spuds has risen in price from €5.06 to €9.34 in the past year. That's an 85pc jump.

Unusual climate conditions are playing havoc with other staples like onions; a fact that has led to riots in India recently. Some political analysts attribute the so-called Arab Spring to rising commodity prices rather than any new-found love of democracy in the Maghreb.

We probably need to get used to the idea that prices won't be stable in future.

There always seem to be individual reasons for rising food prices globally – last year wheat prices soared on fires in the Ukraine, while dairy prices are the culprit this year – but the bottom line is instability. Oxfam says these trends are putting immense strain on families and communities in developing countries, with increased levels of domestic violence, and alcohol and drug abuse.

That, hopefully, isn't happening here in Ireland but it is still worrying that families are being forced to cut back the amount of food they buy at a time when one-in-five children here lives in poverty and the problem is getting worse.

The second reason why families with children are cutting back is falling income thanks to higher taxes and fewer benefits. The Government is busy hitting parents particularly hard as it tries to grab an ever larger share of our incomes.

The list is almost endless. Child benefit for larger families has been cut. The Universal Social Charge. The so-called "voluntary contributions" which parents are forced to pay for simple services such as heating. Medical costs which are rising even faster than food costs – something that hits parents and the elderly particularly hard. Property tax, which again tends to hurt families disproportionately because they must buy bigger houses, is almost certainly also a factor.

By ensuring that the new water charges have generous allowances for every household, the Government has ensured that this new charge will hit families much worse than single people or couples.

With so many demands on the family purse, it is hardly surprising it seems emptier and emptier at the end of the month.

Irish Independent

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