![\"Minister](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/09\/0023043d-614.jpg\"\/)
\nMinister for Finance Paschal Donohoe has noted the lack of a cost of living package will be a ‘difficult message’ politically<\/p>\n
When Russia’s full-scale invasion of Ukraine happened in February 2022, as Ireland emerged from the Covid-19 pandemic, it instantly contributed to an astonishing surge in prices.<\/p>\n
Inflation was a massive 7.8% that year, and 6.3% in 2023, before returning to a more normal 2.1% last year.<\/p>\n
The Government introduced large cost-of-living packages to help households manage the sudden increase in prices.<\/p>\n
These measures resulted in a budget on top of a budget, with an extensive series of one-off social welfare payments, two double Child Benefit payments, and credits worth hundreds of euro added to customers\u2019 electricity bills regardless of income.<\/p>\n
Last year\u2019s cost-of-living package cost the State \u20ac2 billion.<\/p>\n
\nMinister for Finance Paschal Donohoe has noted the lack of a cost of living package will be a ‘difficult message’ politically<\/p>\n
The coalition of Fianna F\u00e1il, Fine Gael and independents is adamant that this year will be different and there won\u2019t be similar measures when the Budget is announced on 7 October.<\/p>\n
Minister for Finance Paschal Donohoe said politically it would be a “difficult message” and T\u00e1naiste Simon Harris acknowledged there would be “pangs of anxiety when people hear the one-off measures aren\u2019t going to be there”.<\/p>\n
Minister for Public Expenditure Jack Chambers said that “moderation of current expenditure is a particular priority for this Government” as he published a report showing spending rose more than 50% since 2019.<\/p>\n
The coalition is trying to reduce the increase in its outgoings after a series of warnings from the Irish Fiscal Advisory Council – the watchdog tasked with monitoring public finances following the crash.<\/p>\n
The council has been sounding alarm bells about soaring expenditure partly financed by highly volatile Corporation Tax paid by multinationals.<\/p>\n
If those unreliable windfalls from US corporations dried up Ireland would be running a massive deficit of \u20ac8 billion annually.<\/p>\n
The Government is four years away from the next general election. Politically, if it\u2019s going to make an unpopular manoeuvre, now is the time to do it.<\/p>\n
With the headline rate of inflation over the past 12 months at 2% it would seem to be an opportunity to wean the public off the cost-of-living packages.<\/p>\n
But inflation doesn\u2019t work that way.<\/p>\n
While the rate of price increases has moderated, consumers are seeing recent rises bulk up bills that have been escalating for some years.<\/p>\n
The latest figures from the Central Statistics Office will make it politically harder to sell the message that the Government needs to abandon the cost-of-living packages.<\/p>\n
Although the overall rate of inflation has moderated, food prices have soared by 5%.<\/p>\n
This is not discretionary spending. Households can\u2019t abandon supermarket shopping if finances are tight, as they might skip a foreign holiday.<\/p>\n
Some of the increases are significant. Over the past 12 months beef is up 22%, lamb 13%, milk 12%, butter 18% and coffee 12% – compounding hikes of recent years.<\/p>\n
![\"CSO](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/09\/002327a7-614.jpg\"\/)
\n(Image: CSO)<\/p>\n