Fine Gael TDs urge Government to defer carbon tax hike until 6 months after Ukraine war

Fine Gael TDs urge Government to defer carbon tax hike until 6 months after Ukraine war

Fine Gael TDs are calling for carbon tax increases to be delayed until at least six months after the war in Ukraine ends.

A motion to be discussed at a Fine Gael parliamentary party meeting tonight also calls for the Government to seek a derogation from the EU which will allow for VAT on fuel to be lowered.

Carlow-Kilkenny TD John Paul Phelan submitted the motion which was accepted by party chairman Richard Bruton and will be debated by the party tonight.

The full motion reads: “That Fine Gael in government will both continue to pursue at EU level a derogation to allow us to lower VAT on fuel, while also proposing a postponement of further increases in carbon tax until at least six months after the cessation of the current war in Ukraine.”

Mr Phelan said carbon taxes were introduced to encourage people to be more energy efficient but insisted this is already happening.

“The pandemic, the war in Ukraine and carbon taxes themselves have led to a change in consumer behaviour,” he said.

“But the war is having a devastating impact on people, families and businesses and it’s time for the situation to be properly addressed by government.”

Former rural affairs minister and Mayo TD Michael Ring said he is supporting the proposal because people are “suffering”.

“I don’t think it should increase this year at all and I also believe we shouldn’t be looking at the carbon tax until we see what’s happening with the war,” he said.

Mr Ring said the motion calling for the deferral of the tax is “not about policy” but rather it is about “economics”.

He said the situation is very different from when the Government agreed to increase carbon taxes when the coalition was formed two years ago.

“This is about a situation that has changed, we are now into a war situation, we are now into a situation where we have a shortage of fuel, we are now into a problem where people are finding it very difficult to live,” Mr Ring said.

A number of other Fine Gael TDs including Paul Kehoe and Joe McHugh are also supportive of the proposals and further support is being sought ahead of tomorrow’s party meeting.

Meanwhile, Climate Change Advisory Council member and Green Party supporter Dr Cara Augustenborg said now is not the time for carbon taxes to increase.

Dr Augustenborg said the tax has not changed public behaviour but said the energy crisis has made consumers become more energy efficient.

“In general, it’s a really good thing but at the moment in Ireland it’s only about €41 per tonne, so it’s relatively small and it hasn’t really been changing people’s behaviour,” she said.

“In fact, it’s 10c or 15c on a litre of petrol, so the excise duty reduction that recently happened has completely wiped out what we were paying in carbon tax.

“It’s not really changing behaviour but we are under huge pressure at the moment in terms of the energy shock and that is actually changing people’s behaviour so maybe now is not the right time.”