Minister Timmy Dooley: Balancing Fuel Relief and the Carbon Transition

Thank you very much, Lascar Haile. I really do appreciate all those that contributed to the debate today. Some down standard political lines but others fully understanding and cognisant of where the Irish economy is at and where the various sectors are at who are really negatively impacted by the massive disruption to the supply of oil from the Middle East or through the Middle East to the Irish economy. Just, if I could at the outset, just to thank Deputy Healey Ray for his comments. I know where you're coming from. As the Minister with responsibility for the fishing sector, I know too that, and a number of others raised it, there isn't an immediate solution there because the oil that's used doesn't carry the same taxes as petrol and diesel do at the pump. So there's a difficulty there and I take your point in relation to the subsidy. The difficulty with subsidies is they have to be paid from somewhere else and it's effectively a challenge to try to burden some other sector of society. It's a transfer effectively or a tax that would have to be raised elsewhere. So that does challenge. So what the government this week did was to look at the way in which the tax model through the excise. I know some have represented or sought to represent that as being mean or not being an appropriate response, but it was the only response that could have been taken unless you were to start looking at raising taxes elsewhere. Others have sought to undermine the carbon tax and in fairness to you, you didn't go down that road Deputy. I accept that, but the reality is that the carbon tax funds very significant investment in reducing aspects of our economic dependence on fossil fuels. Some talked about, I think it might have been yourself, that you identified some weaknesses in the system through the SEAI and the grant scheme there. We've brought forward simplification and measures there, which I'm sure you'll get to in due course, but we're bringing in a grant scheme for windows and doors to help people to upgrade the energy efficiency of their homes so that their dependence on fossil fuels is thwarted into the best way that we can. And we have to continue with that notwithstanding the price shock that's there at the minute. And I think that's the appropriate way. There's good grants for wall insulation, there's good grants for attic insulation, there's increased grants now for heat pumps, so we've got to drive that ahead. And the funding from that comes from the carbon tax. I sat on the committee from an opposition perspective at the time, which I managed to get the party that I represent from an opposition perspective to support the introduction of the carbon tax. It was a challenge politically, quite frankly, but the members of the party bravely took the decision at the time. We didn't suffer electorally for it, because I think the public actually want to hear how you take difficult decisions, because it's not just always possible for the government to rectify issues that are from a different source. This shock to the oil system comes from outside our shores. It's beyond our control. Yes, we can reduce certain excise duties. Yes, we can try to assist people who are in greatest need in a targeted way. But that comes at a cost, a significant cost, and nearly everybody had an ask this evening. And I respect and understand, because my phone rings too, and my office is busy, and we do hear the concerns of people. But it's beyond the capacity of the exchequer to resolve every aspect or every facet of this. And you can hear how the European Union intend to address the consequential rise in our interest rates as a result of this, that they will rise as a result of this, that our inflationary pressures will go up. It'll have an impact on food stocks. So there's been, I think, a kind of a knee-jerk reaction by some that you immediately get in and you address the price cut, the price increase on fuel alone. But there will be other consequential impacts that will have reverberations throughout the economy. And the government cannot carry through all of that, because the only way you do that is to raise taxes elsewhere. And that will further add to the burden. So we have to be careful, and any measure that we bring forward, we have to be able to sustain that, because all of us in this house know, regardless of which side of the house we're on, there's no clarity on where this ends. There's no clarity as of today. We all like to hope that this issue will come to a head shortly, and that the Straits of Hormuz will be opened up, and that oil and gas will start to move around again. But there's backlogs in the system. There's refineries that are taken out. The entire supply chain has been disrupted. So there's a significant way to go. Others have sought to have the standard go at the data centers, and I see it only creates a small amount of money. Data centers create a very significant reduction in the use of energy. When you see that they get, in a co-located environment, racks that would ordinarily sit in offices or other buildings dotted around the country. So that consolidation actually leads to an energy reduction. Some on the hard left seek to make that for naught. I want to pick out Deputy Paul Gogri, who, in fairness, is on the message here. Carbon taxes are about reducing our dependence on fossil fuels, and we have to move ahead with it. There was one other point there from Deputy Whitmore, and she was concerned, as I understand it, because I just took over from Minister O'Brien as she was going through it. She had this concern that somehow the funding that comes from NORA that's used for very significant other investment streams, that that somehow would be lost now as a result of that. NORA is significantly well-funded and does have the capacity to meet all its demands in relation to that. I think the Deputy talked about bringing forward amendments because she felt that somehow the reduction of monies going to NORA would go on for 18 months, and that's not the case. My understanding is that the provision in the legislation allows flexibility for the minister in primary legislation to be able to move. If there is sufficient necessity that it gives the minister flexibility to retain that in exceptional circumstances, but it's just for the initial period of time as set out, but rather than having to go back to primary legislation in the event of any further uncertainty that it's there. So my feeling is that the government is aligned with where Deputy Whitmore is at, but rather than having to burden the House again, there's flexibility created there. I think as the deputies are clearly aware, there's a key transit route for approximately 20% of global oil supply in the Straits of Hormuz, and this has effectively been closed since the 28th of March. That's the root cause of all of this, and we have a responsibility to the economy as a whole that we try and hold our trajectory together. I know there are people identifying that the transport sector versus the tractor men, as Deputy Healey-Rae would have said, are as farmers, and we do support farmers in so many different ways, but also by supporting the haulage sector, we're supporting employment, we're supporting the capacity of our productive sector to get goods to the market. I know the farmers rightly will make the same claim, and we're going to have to look at that, and fishermen, in due course. In relation to home heating oil, again, because it doesn't carry the same taxation model, it's not possible to adjust in the way that was done for petrol and diesel. But we have looked at targeting the most vulnerable by a further month's extension of the fuel allowance, and that's significant, particularly at a time of the year in May where you would hope the weather had improved and the same dependence wasn't on oil or gas to heat the home. So we've tried to bring a proportionate response. We're trying to be responsible with taxpayers' money, because at the end of the day, anybody that's looking for more money to be injected back here or spent here, it's taxpayers' money, and it's taxpayers' money that has already been allocated in the budget. I know there are some political parties who have the standard stock answer that, well, there's a surplus, and that that surplus gets spent in multiples of what it actually is on a daily basis here, and we must be careful about that. We have to continue with the transition away from fossil fuels, and I note, and you yourself, last count, Corla, had indicated a desire to look at nuclear reactors. That may or may not be something that the government will look at. I have my worries about it. I know in my own constituency, it's a phenomenal challenge to get a wind farm built. There's a lot of pushback, and I regularly would suggest to some of my constituents, well, would you take a nuclear reactor instead? I have to say, the response isn't all that positive, but I think that maybe it's different in Kilkenny, or maybe it's Carlo you have in mind. So I think in all seriousness, we've got to respond appropriately, we've got to respond with compassion, we've got to respond in a way that's sustainable and can manage it, but I think we also have to show as a government flexibility to the vagracies of what's going on in the Middle East. Thank you.