MAYO COMMENT: Windfall tax key to allaying public anger over high costs

All of the key indicators are pointing to challenging economic times ahead with the cost of living reaching highs not witnessed since the 1980s and almost certain to increase further in the months ahead.

According to Dr. Robert Sweeney, senior economic and policy analyst with the Think-tank for Action on Social Change, TASC, over a million people have been pushed below the poverty line over the past year.

In his most recent analysis, published last week, he made the point that Ireland has always been a high cost-of-living country and long-standing issues that elevate our costs include consistent failure in planning and public service delivery.

When asked what targets could be achieved between now and October, he made the point that the proceeds from a windfall tax on the significant profits of energy companies could be used to help members of society most in need.

He also pointed out, however, that energy companies in this country are registered in such a way that we do not know their profits.

“What is the government going to do about this?” Tánaiste Leo Varadkar was asked in Dáil Éireann by Independent TD Joan Collins.

While citing the fact that rates of poverty, deprivation and inequality have gone down generally over the past decade or so, as supported by Central Statistics Office statistics, he accepted the current cost-of-living crisis could reverse the trend.

He stated windfall tax is not being ruled out by the government as a potential means of raising revenue to help the poor - but it faced a difficulty in terms of the fact the majority of energy companies are not Irish as the majority of petrol, diesel and gas are being imported.

It was revealed last month that Finance Minister Paschal Donohoe was looking at the prospect of raising €60 million in windfall tax on foot of European Commission approval for temporary tax measures on energy utility companies to help provide customers with relief from high prices.

Ireland’s biggest energy company, the ESB, which is semi-State owned, reported an operating profit of an astounding €679 million last year.

While Minister Donohoe was referring to a windfall tax of 10% when speaking on this issue last month, his view may be altered now by the decision of the Italian government to implement a windfall tax rate of 25%.

There is an obligation on the government to make the right decisions and its progress on the matter will be watched closely by a nation that has become a lot more money conscience.

Due to its majority being cut to the minimum after two Green Party TDs lost the whip for voting in favour of a Sinn Féin motion on the site of the new national maternity hospital on a site at St. Vincent’s Hospital not owned by the State, there is little question the FF/FG/GP administration will be more vulnerable to political pressure now.

Remember it’s only a matter of time before workers hit hard by rising costs will seek pay increases and this is just the type of issue with the potential to cause political instability on which Sinn Féin will capitalise.

Sinn Féin’s plan is clearly to kill off the government by one cut after another.