I don’t want to have to pay higher fuel taxes either, says Leo
LEO Varadkar has admitted that he doesn’t want to pay higher fuel taxes, saying: ‘Nobody wants the cost of living to go up.’
The Taoiseach was reacting to yesterday’s Irish Daily Mail/ Ireland Thinks poll which showed 60% of people opposed higher fuel taxes as a way of combating climate change.
Mr Varadkar, who is currently visiting troops in Mali, also referenced the water charges as an environmental policy which was simply too much for the taxpaying public to take, and said that for these reasons he was determined to find a way of putting money raised from new fuel taxes back into people’s pockets.
‘We need to get this right in terms of having a proposal that works in terms of reducing emissions, that doesn’t hit people disproportionately in their pockets, and one that we can explain to the public,’ he said.
Mr Varadkar said the poll result – showing that more than 60% don’t want to pay more for their petrol or diesel or heating fuel – mirrored his own feelings. ‘I don’t want to [pay more fuel taxes] either,’ he said. ‘Nobody wants the cost of living to go up.’
And he insisted: ‘It will never, from my point of view, be about taking money from people.
‘It is about a tax that changes behaviour and causes people to make environmentally sustainable decisions. We did it before with plastic bag taxes and smoking.’
Nonetheless he said he would develop a proposal to bring in increased carbon taxes, which the EU is pressuring Ireland to pay, before he engaged with other political parties on how they might be mitigated.
The package would be informed by the debacle over the water charges, he said, ‘which I believe was the right decision, the right thing to do, from an environmental policy point of view, but at a time when people were facing pay cuts and increased tax, it was just the last straw’, he said.
Mr Varadkar said he was already working on a system of household rebates, or tax credit, or an increase to child benefit that would offset the costs of fuel tax hikes for households. ‘I’m working on that with Climate Change Minister Richard Bruton and with Finance Minister Paschal Donohoe,’ he said. ‘I hope to have that ready, certainly before the first quarter of this year. Then I will send it to the all-party committee [on climate change] and then put it to the other parties to see if they will support it.’
The decision the Government took at the time of the budget last October was that ‘we did not want to increase carbon taxes at the same time as we were increasing VAT on services,’ referring to the leap from 9% to 13.5% in the hospitality sector.
However, he said he does ‘believe in carbon tax as one of the means in meeting our commitment on climate change’.
‘It will take a package of measures including investment in renewable energy and infrastructure, insulating houses, changes in agriculture, and also carbon tax. You have to do all of them if we are to meet our commitment to decrease emissions and help save the planet, frankly.’
The lessons from France and Australia, and from water charges in Ireland, was that ‘you need to bring people with you’, he said.
‘That is why I firmly believe that if we increase carbon tax in the next budget and the budgets thereafter, that we must give that money back to people, put it back in their pockets, so that we reward people who live low carbon-emitting lifestyles. Also, we want to help encourage those who don’t to make different decisions.’
Asked on how he would ‘give back’ to those who pay higher fuel taxes, he said: ‘There are two ways of doing it. One is a rebate back to houses. That is an obvious advantage of being a cheque in the post but can become quite complicated when people debate how many there are in their household.
‘The simpler way perhaps would be an increase in child benefit and tax credits and fuel allowance. We need to figure all that out.’
‘No-one wants cost of living to go up’
IT is heartening to note that the Taoiseach agrees with the findings of yesterday’s Irish Daily Mail/Ireland Thinks poll, which found that more than 60% of people do not want to pay higher fuel taxes as a measure to combat climate change.
It is only by listening to the people that Leo Varadkar might be able to come up with a policy that will not be rejected outright by a tax-weary electorate.
As we have stated before, though, Mr Varadkar would also be well-advised to remember that as far as changing behaviour goes, the carrot is far more effective than the stick.
He should be looking at ways to incentivise climate-friendly behaviour, not just punish those who – for a great variety of reasons – may not be in a financial position to practise it to the extent that we would all like.