The government’s carbon tax is adding to household bills and fuel poverty, and is a “con job,” Deputy Mattie McGrath has claimed, following the release of a report this month from the Controller and Auditor General (C&AG). The report reveals that only 61 per cent of carbon tax funds have been spent funding climate action schemes – with 39 per cent allocated elsewhere.
The report found that of the €1.36 billion allocated from the increases in carbon tax between 2020 and 2023, 39 per cent, amounting to €530 million, remains unaccounted for in the target areas.
Speaking on RTE’s The Week in Politics, Rural Independent Mattie McGrath said that people had been assured “countless times” by Minister for the Environment, Eamon Ryan, that the money would go back into retrofitting their homes, but that this hadn’t happened.
“The carbon tax is a very reprehensive tax on everyone, it’s adding to their bills and fuel poverty and it’s adding [to the cost] of everyone going to work, travelling, bakeries delivering bread, everything,” Deputy McGrath said.
“We were assured countless times by Eamon Ryan and by the Ministers that the money would go back into retrofitting their homes. To find out from the C&AG that 39 per cent wasn’t spent in that area. So how can people waiting to get the works done have any faith in this system?”
The government, which introduced the carbon tax, legislated for it on the grounds that it would provide funds to help reduce carbon emissions and assist certain sectors of the economy, with one of the key aspects involving retrofitting and creating more energy-efficient homes. The Finance Act of 2020 legislated for annual increases to the carbon tax of approximately €7.50 up until 2029 and €6.50 in 2030, when the rate will reach €100 per tonne of CO2.
The Rural Independent Group, of which McGrath heads, have spoken out repeatedly against what they have described as the “unfair” and “costly” tax. However, despite €530 million having been spent, the TD says people are waiting two years to get a visit from the SEAI to upgrade their homes, with McGrath hitting out at the tax last week, describing it as “the greatest con.”
Last week, when confronted in the Dail, Tanaiste Michael Martin hit back at McGrath’s assertions that the government had been “found out” and that “the €530 million that has been taken from the people has not been given back.”
Mr Martin said that the government spent €380 million on retrofitting this year, more than half of which had been allocated to providing 100% free retrofitting to low-income households and those at risk of energy poverty.
“Anybody in the country would have to acknowledge that the retrofitting programme has been a transformation in the past four years,” the Minister said, adding:
“If we did not have the carbon tax, we could not do that and we would not have developed an industry around retrofitting. The industry knows that for the next decade, funds will be available to retrofit homes and buildings to make sure we are more energy efficient.”
However, McGrath pointed out that the ESRI has projected a potential contraction of real GDP by 1.4% by 2030 due to tax increases, along with higher energy costs affecting all householders.
“This is why the Rural Independent Group has consistently campaigned against this unfair and costly tax. Will the Tánaiste explain where the €530 million has gone? It was supposed to be spent. Every time we ask a question in the House or table a written question, we get the same answer, namely, it has been spent on retrofitting.”
The C&AG report found that only 61 per cent of funds from carbon taxes have been put towards the “ring-fenced” schemes to improve the environment that they were intended for – with the remaining funds either given to the Department of Social Protection or given back to the Department of Public Expenditure because other departments underspent their portion of the money.
Additionally, of the 17 per cent of funds given to the Department of Social Protection, auditors said that the payments were “not recorded in specific ‘carbon tax funding’ subheads” meaning it was not “possible to confirm” independently if they were spent correctly.
They also pointed out that no central tracking system currently exists within the Department of Public Expenditure for carbon tax receipts – meaning it is impossible to determine that all carbon tax receipts were allocated to the targeted areas in 2030.
Of the around 39% of funds that did not go towards carbon offsetting and environmental protection schemes, 19% was made up of the unspent money from the five departments and was given back to the Department of Public Expenditure.
The remaining €23.1 million was given to the Department of Social Protection, the CAG found.
Speaking on RTE, Deputy McGrath pointed out how the tax is “increasing every year incrementally” and that politicians will not have a chance to vote on this because of the government legislation.
“It’s passed up to 2030, so we don’t even get a say on it. Everybody thought, as painful as it was to people who were struggling, we thought it was for their good, but it’s not, he said.
Addressing the Tanaiste last week, McGrath hit out at the government’s carbon tax “mismanagement,” declaring: “Billions of euro have been collected and millions of euro wasted.”
This glaring shortfall is a clear indication that the Government is not only failing to deliver on its promises to improve home efficiency and spend carbon tax funds in a manner that enhances renewable energy and the environment, but it is also misleading the public about the true use of these funds. Where has the rest of the money gone? This is not chicken feed; this is €530 million.”
He said the mismanagement of funds went further than financial oversight, describing it as representative of a “profound breach of public trust” and a “reckless disregard for the urgent need to address climate change effectively.”
“The people of Ireland deserve transparency and accountability, not empty promises and squandered resources. The Government has legislated for the carbon tax to increase incrementally each year until it reaches €100 per tonne by 2030, which will continue to drive up the cost of living for everyone.
“Last week, Fianna Fail, Fine Gael and the Green Party increased the price of petrol and diesel as the tax reached €63.50 per tonne. I must also point to the rapid increase in carbon taxreceipts, which have nearly doubled from €494 million in 2020 to €935 million in 2023.
“Well over €1 billion will be collected this year but the Government has neither a strategy or a plan to effectively use these funds in a meaningful way that supports key sectors, such as farmers or homeowners. Instead, these funds are being used to prop up a dysfunctional system. That is a fact. As I said, this is not chicken feed. It is massive money. It is a con job.”