LAST UPDATE | 6 Apr 2022

WHILE FINE GAEL will be debating a motion calling for the carbon tax increase to be delayed, Fianna Fáil will also be discussing a motion calling for its full implementation. 

TDs Michael Ring, John Paul Phelan and Paul Kehoe are tabling a motion at this evening’s parliamentary party meeting calling for a deferral of the tax. 

Carbon Tax is set to increase next month from €33.50 to €41.00 per tonne of carbon. It is a charge applied to carbon-emitting fuels such as coal, peat, oil and natural gas. 

Tánaiste Leo Varadkar has said the government estimates it will add about €20 to the cost of filling a tank of home heating oil and €1.50 a month on gas bills. 

As part of the Programme for Government agreed by Fianna Fáil, Fine Gael and the Green Party, the coalition outlined a target of increasing carbon tax gradually up to €100 per tonne by 2030.

As part of that pledge, carbon tax increased by €7.50 from €26 per tonne to €33.50 per tonne in Budget 2021 and increased €6 per tonne in the previous budget.

Offsetting tax hike 

The Taoiseach has said the scheduled increase in carbon tax next month will go ahead but Government will “offset” the burden on households. 

The Journal understands that Taoiseach Micheál Martin told his parliamentary party this evening that people on low and middle incomes will have the carbon tax offset.

Martin said that prices are continuing to rise due to the war in Ukraine but that there had been a positive bounce back to the Irish economy.

He added that the recovery is positive, but pressures on people remain in place.

Ring, a former minister for rural development, made his views on the carbon tax known last year, when he told his party members at a meeting that he had written to Finance Minister Paschal Donohoe and Climate Action Minister Eamon Ryan asking for no increases in the carbon tax this year due to the rising cost of heating for consumers.

In September 2021, ahead of last year’s Budget, he told The Journal  that we “have to cut out the hypocrisy”, stating that we are facing into uncertainty and now is not the time to increase costs for people.

“We have a problem, now is not the time to increase carbon tax on fuel,” he said, adding that there is a “serious problem” right now with the “price of fuel, electricity and everything else”. 

President of Young Fine Gael Art O’Mahony agrees with the motion, stating that there is an onus on Fine Gael to “square up to the Greens on this ludicrous proposal”. 

While Fine Gael will be discussing the deferral of the tax, Fianna Fáil TDs Paul McAuliffe, Malcolm Byrne and Christopher O’Sullivan will table a motion at its parliamentary party meeting, calling for the “full implementation” of the carbon tax. 

Their motion states that they recognise the rising cost of fuel and the impact it is having on homes and businesses, but it also notes this week’s IPCC report on climate change which calls for swifter Government action to deal with the climate crisis. 

The Fianna Fáil meeting will also hear of a another motion from TD John McGuinness which states that due to the cost of living, there should be no further tax increases or new taxes, including carbon tax. It also calls for consultation with stakeholders, including the parliamentary party, on the matter. 

It is understood that party members have been told ahead of this evening’s meeting that Government is committed to offsetting any carbon tax hike for anyone that is in a difficult sector and that work is underway to relieve the burden on people. 

One source within Fianna Fáil said the talk of offsetting the tax is a quick reaction by Government that was facing mounting pressure on the cost of living.

They said such a move is very much about “holding the Government together” in terms of keeping the Green Party on side. 

Divisions

It is not yet known if either party will hold a vote on the motions, but party sources state that there are divisions between members as to whether the tax hike should go ahead or not. 

One Fine Gael source said they were on the fence as to what way they would vote, if one is called. They said they represent a rural area with many constituents in favour of not proceeding with the carbon tax hike next month.

Related Reads

Government hints at move to 'offset' the cost of Carbon Tax hike

Irish grocery prices have increased at their fastest pace this year in nearly a decade

Taoiseach: 'Carbon Tax not as significant as political debate would suggest'

However, they added that the measure is in the programme for government. 

Another Fine Gael source said ”nobody likes to put up carbon tax at this time”, adding that there are “mixed views” within the party. 

They said a few politicians think deferring it until after war in Ukraine is a good idea, but they added that the war could go on for years, and the climate crisis is happening too. 

Deferring it is more about “optics”, they argued, stating that they do not foresee the carbon tax being pushed out. 

Tánaiste Leo Varadkar told his parliamentary party tonight there will be a plan to fully offset the forthcoming increases from the carbon tax which may come before Cabinet before the Dáil returns after Easter recess.

Varadkar said the costs people face for childcare, healthcare, public transport and higher education should be further reduced, but cautioned against responding to every increase.

A Fianna Fáil source said there are also differing views within the party.

They predicted that the Taoiseach would address the concerns this evening, while committing to ensuring a support package. 

Whether each party votes to defer or push on with the carbon tax hike, any vote is not binding in any way.

However, if TDs and senators were to vote to delay the tax hike, it would mount pressure on the two party leaders to take the views of their parties on board ahead of next month.