The leader of the Rural Independent Group has claimed that carbon tax is now the leading cause of inflation and must be cut.

Mattie McGrath hit out at the Taoiseach’s comments during a Dáil debate on carbon budgets yesterday (Tuesday, February 8, 2022).

Micheál Martin said that rising energy prices were “a global phenomenon” with the vast majority of that having “very little to do with carbon tax”.

He said the government is examining measures to “cushion the blow of this inflationary cycle for those most in hardship and those most at risk”.

“The challenge for us is that we cannot chase inflation. From a macroeconomic point of view, that has been tried in previous decades and it did not work,” the Taoiseach added.

However, McGrath said that the Taoiseach’s response failed to “fully acknowledge the crippling cost-of-living crisis”.

“Inflation is currently at a 21 year high in Ireland, yet the Taoiseach’s response in the Dáil is infuriating. He chooses to blame factors external to government control, which is a clear abdication of his responsibility.

“Despite the crippling wide-scale financial pain impacting every citizen, which is due in no small part to the government’s climate action policies and crippling carbon taxes, the Taoiseach tries to play games and shield the blame,” the Tipperary TD stated

Carbon tax

The Rural Independent Group leader said that soaring petrol and diesel prices are “disproportionately affecting people in rural Ireland, who have very limited access to public transport and alternative fuel sources”.

McGrath said that carbon tax, which is now €41 per tonne of carbon, is a “key contributor” to the 22.6% increase in motor fuels and 70% jump in home heating oil prices over the past year.

“It is deeply disingenuous for the Taoiseach to blame global factors, when his own government is hammering tax on fuel, with a motorist now paying approximately €1.70 for a litre of petrol, of which a staggering €1, or around 60%, is going directly to the government, mainly via excise duty, carbon taxes and VAT,” the TD stated.

McGrath said that the government is ignoring the “toolbox” of measures proposed by the EU Commission and noted that Spain and Sweden have reduced taxes on fuels.

The Tipperary representative said that a “focused mini-budget” is now needed to tackle the price hikes which are “impacting every citizen, transport operator, farmer and small business”.

“High energy prices have deeply profound socio-economic consequences. Therefore, an immediate and meaningful state intervention is required. The offer of a €100 credit for each household is grossly insufficient,” McGrath concluded.