ANYONE who has recently stood in a supermarket queue, filled up their tank or received an energy bill will tell you that Ireland is an expensive place.
And now, new data from Eurostat confirms it.
In fact, we are the second most costly country in the entire EU, with prices a staggering 38 per cent above the bloc’s average.
Only Denmark, often held up as a model of social democracy, is pricier.
But while the Danes at least benefit from generous public services, good public transport and clean streets, Ireland often feels like it charges Scandinavian prices and taxation while delivering poor public services in return.
Here, Daragh Cassidy of comparison site Bonkers.ie, asks why Ireland is so expensive – and considers what can be done to bring prices down.
WHAT is quite striking about Eurostat’s figures is how far we seem to be drifting from the European average each year.
In 2015, our prices were 28 per cent above average, but the gap seems to be widening almost every year.
And we’re no longer just more expensive than our Mediterranean neighbours.
We’ve leapfrogged traditionally costly countries like Finland, Sweden and even oil-rich Norway. So where are we being hit the hardest?
Let’s start with the obvious — alcohol.
Ireland has the second highest alcohol prices in the EU — almost 198 per cent the average. Only Finland is dearer.
REASON FOR HIGH COST
Much of this is due to high government taxation and the recent introduction of minimum unit pricing.
The cost of food and non-alcoholic drink is also relatively high in Ireland. Our grocery prices are the third highest in the EU, at nearly 15 per cent above average.
However, this is actually an improvement on recent years.
In 2020, our prices were over 21 per cent above average, but that’s probably not much comfort to households.
Dining out and hotel stays are pricey, too, with costs nearly 30 per cent above the EU average.
Electricity, gas and fuel? They are 17 per cent above average.
‘HARVEY NORMAN EFFECT’
Mobile and broadband services? A jaw-dropping 40 per cent higher.
There are a few positives, though!
Our clothing costs are slightly below the EU average, and the “Harvey Norman effect” keeps the cost of household appliances and furnishings somewhat in check.
These small wins, though, are dwarfed by the overall trend: Ireland is an expensive place to live. But why?
NO EASY ANSWER
There is no single answer. And some reasons are complex and structural.
But factors which contribute to our high cost of living include a lack of competition in certain sectors and high taxation on goods such as tobacco, alcohol, petrol and diesel.
Low government subsidies in areas such as public transport and childcare compared to our European neighbours are a factor, as is our small, dispersed population, which pushes up the cost of delivering goods and services.
In addition, businesses are faced with high insurance and energy costs which then get passed on to consumers.
MORE IMPROVEMENTS
So what can be done?
Ireland is unlikely to ever be a cheap country — nor should we aim to be.
High prices often go hand in hand with high living standards.
It should be noted that most of the countries with the highest standards of living in the world (such as Switzerland, Iceland, Norway and Denmark) also have very high prices, some in excess of ours.
INCOME ISSUE
But the problem is that Irish incomes, while high, don’t quite match the salaries in these countries.
We have Danish prices, but wages closer to Germany (where prices are about 25 per cent lower than here).
Taxpayers in more expensive countries tend to get back more from the government in terms of better and more affordable healthcare, childcare and public transport, though there have been welcome improvements in Ireland in recent years.
So what now?
The Government could begin by looking at our rate of VAT and excise, and continue to crack down on high insurance costs, which have dragged on for far too long.
SHOP AROUND
Regulators such as ComReg and the CRU need sharper teeth and stronger mandates to tackle anti-competitive practices.
And a Minister for Consumer Affairs could help ensure consumer interests are more consistently championed at government level.
But consumers aren’t powerless.
By shopping around and switching providers for everything from electricity and insurance to broadband, households can claw back hundreds of euro a year.
Ireland may never be a bargain destination, but that doesn’t mean we can’t find better value.
