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As a country, we can steer our way through the cost of living crisis

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Stock image. Photo: PA

Stock image. Photo: PA

Stock image. Photo: PA

Today we will learn a lot more about the extent of resources available to fund the many interlinked economic challenges this nation faces. Taxpayers’ money is limited and it must be used wisely to time government interventions to support the most vulnerable people, without adding to rapidly rising inflation, already on the threshold of double digits at 9.6pc.

The situation is grave – but it is not all doom and gloom. The relatively good news is that Ireland is in a strong enough position going into what has all the signs of being a period of considerable economic turbulence. Unemployment is less than 5pc and, in fact, there are labour shortages across some sectors of the economy.

For now, we have a broadly balanced budget and one of the fastest growing economies in the EU. We are continuing to win a large share of international investment. Despite a long-term debt overhang, Ireland is far better fixed than it was when the economic crash happened after 2008 and the economy has rebounded well from that grim period.

Today, we expect publication of the summer economic statement and we should also have the mid-year Exchequer position. These will provide clarity on the resources that are available to the Government and to the country for Budget 2023.

Government expressions of hope that inflation may plateau within a short period of months are more in hope than confidence. We must reckon with a prolonged period of global inflation.  

It is very clear that many people will need more help going into the upcoming autumn and winter. The three governing parties have already vocally committed to doing that with targeted welfare payments which are promised to kick in promptly instead of the customary delay into the new year.

There is tension between some of the parties over the need for tax cuts which are seen as militating against significant rises in welfare payments. But some targeted tax cuts for people on low and middle incomes are worth serious consideration as there is no better help than allowing people keep more of their own hard-earned cash.

There are also promised helps for parents to pay for childcare and for commuting workers to pay ever-increasing fuel costs. But helping cushion the vulnerable in this cost-of-living crisis is not the only major bill confronting this Government.

There are ongoing demands to invest in housing, health, education and disability services. There must be funding for the mica compensation scheme, resources for the mother and baby homes payments scheme and, of course, the cost of supporting more than 30,000 Ukrainian refugees who have been forced to flee a most unjust war.

There will also be other competing demands on the public purse. The challenges are formidable and they call for a deal of co-operation from all the parties and Independents at Leinster House.

Ireland can come through the upcoming tough challenges with considered economic planning and a balanced and fair approach.

Today is an important milestone on that challenging economic road ahead.

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