- Every household to receive three €200 electricity credits
- Excise cuts on petrol, marked gas oil and diesel, and the VAT rate on electricity and gas extended until February 2023
- Businesses to receive up to €10,000 a month to assist with energy bills
- Double child benefit payment in November
- €1,000 cut in the student contribution
- €500 for those on a carers support grant in November
- Double week cost-of-living support payment to welfare recipients in October
- Public transport reduction fare until end of 2023
- Two €500 tax credits for renters
- Read more main points here
We are wrapping up the live blog for today. The Irish Times continues to cover the details and reactions to the 2023 plan on its dedicated Budget page.
Don’t forget to submit your budget-related queries, which will be answered by PwC expert Máiread Harbron and Deputy Business Editor Dominic Coyle from 7am tomorrow, Wednesday.
A tax credit for renters and a reduction in third-level fees were among the budget measures welcomed by students and graduates.
However, a number of young people who spoke to reporter Jade Wilson described themselves as underwhelmed by Budget 2023 overall.
Under the plans, tenants that do not get any other housing support will qualify for a €500 rent tax credit which will apply in 2023 and subsequent years, bringing the value of the measure to €1,000. An individual can claim one credit per year.
Reporter Marese McDonagh has been getting Budget 2023 reactions from pensioners in north Co Roscommon.
Teresa Cullinan (84), who reckons the Minister for Finance seems “like a nice man” and is obviously “very bright”, was blunt when asked what she thought about the €12 increase in her pension.
“Not worth a damn,” she said to a chorus of approval from her peers, who seemed as worried about the threat of power outages as they were about soaring bills.
For more Budget 2023 dissection, Business Editor Ciaran Hancock is joined by guests for today’s Inside Business podcast.
On the panel are economics columnist Cliff Taylor, Sven Spollen-Behrens, director of the Small Firms Association, Kevin McLoughlin, tax partner with EY Ireland and political correspondent Jennifer Bray.
Irish Times reporter Mark Hilliard has been examining what the budget means for Irish transport projects.
He reports that that they will receive their largest capital injection in 15 years under the budget, with a focus on low-carbon travel and maintaining fare reductions for public services.
Although carbon tax hikes will see petrol and diesel costs increase by 2 cent per litre from October, a simultaneous readjustment in an oil levy will cancel that out for motorists at the pumps.
Tuesday’s budget had a strong Green Party imprint on transport matters, with fare reductions, electric vehicles and walking and cycling infrastructure to the fore.
For more transport details, read here.
Who said taxes weren’t fun? With the Irish Times’s interactive tax calculator, in association with PWC, you can find out how much your disposable income is set to increase with the change in tax bands.
Access the tools here.
Do you own a vacant property?
Public Affairs Editor Simon Carswell answers the key questions relating to a new vacant homes tax which aims to increase the supply of residential properties. Find out here which properties will be liable, including if your holiday home would be affected by the move.
And on those once-off disability supports, the Irish Wheelchair Association and Inclusion Ireland habe urged for sustained measures.
Social Democrats Co-leader Róisín Shortall was also critical of Budget 2023’s temporary measures. Pointing to the €500 singular cost-of-disability payment, she asked if the government thinks disability is one-off or temporary.
“Frankly, I think the one-off nature of this payment is completely misjudged and insulting,” she added.
Her colleague Cian O’Callaghan TD called for a nationwide extension of rent pressure zones.
“Without properly-enforced nationwide rent controls the tax credit for renters will simply be eroded by landlords through further rent increases,” he said.
For the Labour Party, Ged Nash TD said people should not be too distracted by the “once-off spending frenzy”.
The Budget is not “climate-proofed, not poverty-proof and not housing proofed”, he said, adding that it “manifestly fails” to address the crises the country faces.
What is the opposition saying?
Sinn Féin’s Pearse Doherty welcomed some of the measures announced in Budget 2023. However, he said there was a missed opportunity to provide certainty to workers and families who are struggling.
He said today’s budget shows “no departure from the past” in relation to housing strategy. The €500 tax credit announced in the budget not only fails to cover the cost of past rent increases, but it will be pocketed by landlords with further rent hikes, he added. Such a credit would only work alongside a rent freeze, Mr Doherty went on.
Sinn Féin will tonight table various amendments calling for further reductions to petrol, diesel, electricity and gas, he said.
“More money in people’s pockets” is a phrase that has been bandied about in relation to Budget 2023.
Irish Times Deputy Business Editor Dominic Coyle explores the details of changes to the tax bands and universal social charge (USC) thresholds and how these will impact various income levels…
Find out more here.
The director general of the Irish Universities Association, Jim Miley, described the funding gap measures in Budget 2023 as “disappointing”. If the annual rate of funding increase for universities was to continue at the 2023 increase rate it would take eight years to close the €307 million funding gap, he said.
“At a time of major challenge to our economy, investment in higher education and research is absolutely critical,” he added.
The organisation welcomed the provision of €32 million to fund an increased number of students due to demographic growth.
Irish Times Economics Correspondent Eoin-Burke Kennedy analyses the figures in the State’s rainy day fund that are propping up much of Budget 2023…
If the main focus of Budget 2023 is cost of living, the main enabler is corporate tax. The continuing business tax windfall is allowing Minister for Finance Paschal Donohoe to effectively face two ways at once.
He can lay claim to be spending significantly on the cost-of-living crisis while being prudent in setting aside €2 billion for the National Surplus.
Read further here.
Q&A: Irish Times Deputy Business Editor Dominic Coyle and Máiread Harbron from PwC will answer all your Budget 2023 questions tomorrow, Wednesday, from 7am. In the meantime, you can submit a query via the form here.
Speaking for farmers, the president of the Irish Farmers’ Association, Tim Cullinan, said Budget 2023 contains some of the targeted measures sought. He acknowledged the rollover of fodder and tillage schemes. The renewal of the Beef Environment and Efficiency Scheme for suckers was “important”, but he said the allocation was too low.
The schemes are not enough to mitigate the 40 per cent increase in farm inputs, particularly for the low-income beef and sheep sectors, he went on. He noted that farmers were included in the energy support scheme.
Head over to the Irish Times’s Instagram for live analysis of Budget 2023 with Managing Editor Cliff Taylor, Political Editor Pat Leahy, Political Correspondent Jennifer Bray and Consumer Affairs Correspondent Conor Pope.
Family Carers Ireland welcomed the financial supports announced in Budget 2023 but said they are overly focussed on short-term measures and lack “long-term strategic vision”.
The national charity, which represents 500,000 family careers, said the budget provides some temporary relief, but the measures are “largely a sticking plaster” to counter inflationary pressures and there were cracks in the system beforehand.
It “cautiously“ welcomed additional funding towards respite day services and residential places for older people, people with disabilities and mental health issues. However, it awaits further details of these measures.
Tanya Ward, chief executive of the Children’s Rights Alliance, has said Budget 2023 goes further than any before to address the cost of education but fails to deliver enough effective targeted supports for the most disadvantaged children.
“Framed as a cost of living budget, what we are seeing today is a suite of measures to help families keep their heads just above water,” she said.
“Budget 2023 has gone further than any previous budget when it comes to the cost of education with the inclusion of the long-awaited free school books for primary school children.
“However, it fails to deliver enough effective targeted measures to help the most disadvantaged children and young people.
“The cost of education has a significant impact on families, particularly those most disadvantaged.
“Many have nothing left over after the costs of books to afford after extra-curricular or school trips. Removing this barrier is a significant step towards delivering free education but we need to see the detail in how this will be rolled out.”
Retail Ireland, the Ibec group that represents the Irish retail sector, welcomed measures to offset spiralling energy costs and bolster household finances “as we enter the crucial Christmas trading period”.
The group however cautioned that more supports would be needed if the energy crisis continues into 2023. The outlook for the sector remains very challenging.
Retail Ireland director Arnold Dillon said: “The new energy support scheme will offset the worst excesses of recent price hikes, but more help will be needed into next year. Without ongoing support the energy crisis will push many vulnerable retail businesses to the wall.”
Dublin Chamber, representing 1,300 firms across the Greater Dublin Area, welcomed measures to improve the tight labour market in the region, including the near trebling of the universal National Childcare Scheme and measures to boost housing and penalise vacant property.
“The CSO estimate that there are over 58,000 women who could potentially be in a job, but are not in the labour force,” said Aebhric McGibney, director of public and international affairs.
“We believe the boost to cut the cost of childcare will help bring these people into the many employment opportunities firms have an offer but are currently unable to fill in a tight labour market.”
Irish Times political correspondent, Cormac McQuinn, has further details on the Vacant homes tax. He reports that the new measure will be self-assessed and is expected to raise as little as €3 million a year.
It will be charged at a rate that is three times the property’s local property tax (LPT) rate.
Minister for Finance Paschal Donohoe said he is introducing the tax to increase the supply of homes for rent or purchase to meet demand.
The National Women’s Council has said the announcement on childcare represents a “significant breakthrough for women” and sets a clear path to achieving public childcare. The reduction in costs for parents is “significant”, but, as fees were so high, the NWC is calling for ongoing investment in the area in the next two budgets.
Minister of State for Heritage Malcolm Noonan has provided more details of how the 14 per cent increase in funding for heritage has been allocated.
The €147.5 million allocated for natural, built and archaeological heritage include over €90 million earmarked for nature and biodiversity. Money directed towards the National Parks and Wildlife Service will help boost staffing, including increasing the number of conservation rangers from 64 in 2020 to 120 by the end of 2023.
Food Drink Ireland (FDI), the Ibec group representing the food and drink sector, has welcomed the energy supports announced in Budget 2023 as a step in the right direction but called for larger supports over a longer time period.
FDI director Paul Kelly said: “Energy supports are now central to the sustainability of many food and drink businesses as they will determine their ability to remain competitive in export markets like Great Britain where they also face the headwinds of a weakened sterling exchange rate.”
FDI also called for the energy supports for businesses to match those in other key EU export markets so that food and drink businesses can maintain their valuable market positions.
The national housing charity Threshold has said tax reliefs for tenants announced in today’s budget are “disheartening” and that the measures set to alleviate pressures presents a bleak reality for many households this winter.
Tax relief in the form of a €500 tax credit this year and next year was among the measures announced for tenants in today’s budget, alongside the introduction of a Vacant Property Tax and the extension of the Help to Buy Scheme to 2024.
However, Threshold has stated that the €500 tax credit will only amount to 2.06 per cent of the yearly average rent in Dublin and just 2.89 per cent of the yearly average rent nationally.
The Vintners’ Federation of Ireland (VFI), which represents 4,000 publicans across Ireland, welcomed the introduction of a Business Energy Support Scheme.
“The survival of many pubs is conditional on the successful and timely implementation of the scheme,” it said.
The VFI described the decision not to extend the 9 per cent VAT rate past February 2023 as a “devastating blow” to publicans who serve food.
Our Business Affairs Correspondent Mark Paul has more reaction to the announcement that the 9 per cent VAT rate is due to come to an end early next year.
Some reaction from landlords.
The Irish Property Owners’ Association is “shocked, disappointed and saddened” that the Government has not addressed the issues it has “repeatedly brought to the Governments attention”.
“No meaningful attempt has been made to prevent the exodus of landlords from the market in spite of the State not providing homes for people,” said chairwoman Mary Conway.
Budget 2023 has also come in for criticism from the Union of Students in Ireland (USI). While welcoming the once-off €1,000 reduction to the Student Contribution Charge, the USI said students are “left not knowing where they stand for the future”.
The Irish Medical Organisation (IMO) has strongly criticised the proposals to expand the number of eligible for free GP care by about 400,000.
The organisation, which is the main doctors’ union, said family doctors will not be able to cope with the consequences of the “ill-conceived and poorly planned” proposal.
The IMO said it supports the objective of removing financial barriers to patients accessing care, but the significant expansion requires long-term planning.
Focus Ireland has said that despite “some welcome once-off measures” to protect people from the effects of the rising cost of living, Budget 2023′s “scattergun” approach has failed to tackle the deepening housing and homelessness crisis.
Focus Ireland spokesman, Mike Allen, said: “The cost-of-living measures are welcome and will grab the headlines, but meanwhile the stark reality remains that homeless services and local authorities nationwide fear that they may not be able to provide emergency accommodation for all of the hundreds of households that will become homeless this winter.
“It is unforgivable that given this reality the budget failed to offer a single measure to help prevent these households from losing their homes.”
Minister for Defence Simon Coveney has welcomed the highest ever level of capital funding provided to his department.
The overall capital allocation of €1.174 billion is an almost 25 per cent increase on the 2022 budget, he said. It will assist in bringing Ireland’s defence capabilities closer to European norms, he added.
For third-level students, the government announced a once-off €1,000 reduction, for eligible students, in the student contribution fee. There will be a once-off double monthly payment of the SUSI maintenance grant and a 10-14 per cent increase in the SUSI grant from September.
The €215 million allocated for homelessness services is a 10 per cent increase on 2022 funding, he says.
Meanwhile, €97 million will go towards homes for people with disabilities, older people and people who have face homelessness.
There will be €92 million for home adaption and improvement grants and €27 million for to support the Traveller community.
Minister for Housing Darragh O’Brien has welcomed what he says is a “significant and progressive” Budget 2023.
His Department has been allocated €4.5 billion for next year. More than €1.3 billion will be invested in affordability measures in 2023, including for the delivery of 5,550 affordable purchase and cost-rental homes, the first home scheme, local authority home loan and help-to-buy.
Renters will have to wait until the new year to apply for a €500 tax credit for rent paid in 2022.
The new annual Rent Tax Credit will be in place until at least 2025.
The tax credit is being introduced for tenants who are not in receipt of any other State housing support.
An individual can claim one credit per year.
However, the value of the credit will be doubled in the case of married couples and civil partners.
The plan is for the credit to be claimed ‘in year’ in the years 2023 to 2025.
It will be early 2023 before tenants can apply for the €500 credit for rent paid this year.
The full-year cost to the exchequer of the credit is expected to be €200 million.
Around 400,000 people are expected to benefit from the credit.
Minister for Finance Paschal Donohoe said he will apply a 0 per cent VAT rate on defibrillators. He also said the same 0 per cent rate would apply to hormone replacement therapy, nicotine replacement and period products.
One of the key takeaways is that the standard rate tax band is rising by €3,200 a year. This is worth €640 a year to those who earn enough to qualify for the full relief (€40,000 or more for a single person).
Also, all tax credits are going up by €75. This is a cash gain for taxpayers.
We’ll now bring you the bits we missed as they happened live, as well as all the reaction.
He adds that the government’s message to the people is clear. He hopes the measures will be taken in the round as showing “good faith”.
He’s dropped in the mandatory Seamus Heaney quote before wrapping up.
Turning to Covid, he says much of life has returned to normal. However, we now face new, serious challenges.
He says this budget seeks to strike the right balance. This is a time of great change, and turmoil across the world.
He says the spirit of the Irish people will see us through.
He outlines a number of EU mechanisms from which Ireland is set to benefit.
Next year will represent 50 years of Ireland in the EU, he says.
Recent years in particular have highlighted the importance of the solidarity of the European family of which we are a part, he says.
The country is “resolute” in its support for the people of Ukraine, he says. There will be increased funding to provide a response to the humanitarian need there as well as in parts of Africa and the Middle East.
There will be an increase in funding for Irish Aid.
There will be an additional 400 members of Ireland’s permanent Defence forces. There will also be funds to develop radar capability to secure Ireland’s airspace.
The Department of Defence is getting an increase of €67 million in its funding. He says this is a step change in how we fund defence.
The agri-food sector is an important contributor to Ireland’s rural and national economy, he goes on. There will be €238 million allocated to alleviate the impact of Brexit on the sector.
On policing, he says high visibility is crucial and we must continue to support the Garda.
Funding for an additional 1,000 officers is being made available.
He says hybrid working and connectivity are key to the future of rural communities.
He is allocating €319 million for rural and community development.
The Department of Agriculture is getting €2.1 billion for next year.
As well as core funding, there will be funding for the continued community-level response to the Ukrainian refugee crisis.
Of the more than €600 million carbon tax yield available for investment, about half will go towards improving the energy efficiency of homes.
We stand at a cross road in global affairs, he says. The silver lining is consensus on dealing with energy requirements. He says we must reduce dependence on Russia. He is providing €850 million to the Department of Energy, of which €375 million will be allocated for energy efficiency.
He is providing funding for 2,500 additional apprenticeship places. There are also upskilling and re-spilling opportunities.
He says this government has prioritised school building projects and special education. He announces funding for additional SNAs and teachers. The student to teacher ratio will reduce for the third year in a row.
On school books, he says he understands the costs involved for parents.
He says primary school children will get free books from next year.
The measure draws applause on Government benches.
He says it will benefit more than 500,000 students.
Mental health funding will be increased by €58 million.
McGrath is concluding his speech now.
For generations, Ireland has been renowned for the high quality of its education system, and he says he is allocating €9.6 billion to the Department of Education.
Free GP care to be extended to more than 400,000 people.
Hospital in-patient charges will be removed for all public patients, he confirms.
There is record exchequer capital investment of over €930 million in Ireland’s water services. There will also be significant additional funding to the State’s heritage programme for Budget 2023.
Budget 2023 provides for more than €23 billion in health spending. It will allow for continued health system capacity expansion.
He says budget will allow for public health expansion in line with Slaintecare.
Recruitment of 600 staff to improve capacity and access.
There is record exchequer capital investment of over €930 million in Ireland’s water services. There will also be significant additional funding to the State’s heritage programme for Budget 2023.
He is allocating €215 million for homelessness services, a €21 million increase.
Rents are too high, McGrath says.
Help to Buy Scheme was earlier extended.
The government has committed a record €4.5 billion next year in public funding for providing social and affordable housing, he says.
This follows a decade of under supply, but significant progress is now seen, he says. It’s clear more needs to be done, however, he adds.
The medium-term budgetary strategy has been adjusted on a once-off basis for next year to allow for public spending to grow by 6.3 per cent in 2023, he says.
Minister McGrath gives the example of a single pensioner living alone, in receipt of the fuel allowance. The pensioner, he says, would receive an additional €2,375, he says.
That is between now and the end of next year, he explains.
Reduction of 25 per cent in the weekly fee of those availing of the national childcare scheme.
Next year’s social protection packages is worth €1 billion, he says. This will include a €12 weekly increase in social welfare payments.
There are once-off supports for a range of health bodies, including nursing homes, hospices and section 39 organisations, says Minister McGrath.
He has confirmed a number of once-off social welfare support boosts, including a €400 lump sum for fuel allowance recipients and double child benefit payment for qualifying households.
He says he is giving additional funds to ensure continuity of service delivery in the face of the energy crisis.
€100 million for schools and school transport providers
€10m for higher education
€60m to local authorities
Extra €200 to the Living Alone Allowance.
On measures to be implemented this year, he says every household is being hit by high energy prices.
Energy credits of €600 in three instalments of €200 at a cost of €1.2 billion will be issued to every household. One before Christmas and two next year.
McGrath says people will see a difference from this budget quickly.
He echoes Donohoe that the budget should not not put the country’s long-term finances at risk.
Acknowledges the financial pressures on people and businesses. The scale of response today is possible only because of the “strong and swift rebound” of Ireland economy and public finances, he says.
With no consideration for live bloggers anywhere, Minister for Public Expenditure Michael McGrath is now on his feet.
More on that: “We know we have many risks… I know we need to do more. We need to build more homes and continue to improve public services and respond with courage and with the right solutions to our defining challenge of climate change. We can and we will.”
Concluding his speech, Donohoe admits the Government must do more on a number of fronts, but adds: “We can, and we will.”
His Department will employ a new metric for monitoring the public finances. This measure, considering the excess receipts, would show a deficit of up to €8 billion this year compared to a surplus of €1 billion, he says.
On the rainy day fund, he says it is imperative we are prepared for future shocks.
He is putting €2 billion in this year and €4 billion in 2023.
Ireland’s tax regime is a “core element” of the economic policy mix of this country and a “long-standing anchor” for attracting foreign direct investment, he says.
Every one in eight euros comes from corporation tax, he says. Ireland must be mindful of this, and these welcome receipts will not be used to fund permanent expenditure.
He references the State’s reliance on a small number of multinationals for its corporation tax intake.
He says the receipts are extremely welcome but that the State is not using them to fund permanent expenditure.
On funding public services into the future, he references the controversial, recently-published taxation report.
The Department of Finance will consider proposals such as PRSI, USC and income tax. He welcomes the commission’s proposals in relation to local property tax. The “wide-ranging reforms” require careful consideration and consultation across government, he says.
On housing, he says he will commence a review of the REITs. Institutional investors have played a key role in housing in recent years, he says, but the review will examine how they operate going forward.
Cigarette prices are increasing again. He announces a 50c rise on a packet of 20, with a pro rata increase on other tobacco products.
He said Ireland will aim to take part in the EU-wide response to high energy prices. If this is not possible the government will bring forward its own measures.
Much work is underway in the EU to capture the windfall gains of energy companies, he says.
It isn’t fair for some energy companies to make gains while others suffer, he goes on.
He will extend the film tax credit beyond its current term to 2028.
He says the 9 per cent VAT rate for tourism and hospitality sectors will continue until February 28th, 2023.
He says he is aware of the critical role played by newspapers, and that he will reduce the VAT to 0 per cent.
This is in line with the Government’s support for an independent press, he adds.
The Minister has also pledged to support the night time economy. He will halve the special exemption fee required to host late night events from €110 to €55.
This will need to be approved by the EU Commission in advance of making payments, he adds.
“We must weaken the ability of a shock to income becoming a loss of jobs,” he says.
Small and medium business are the “backbone” of the domestic economy supporting thousands of jobs. He is introducing a temporary business energy support scheme. It will be open to tax-compliant businesses who have experienced a significant increase in gas and electricity costs, he says.
Continuing his Budget 2023 speech, Minister Donohoe confirms that there will be an increase of just over 2c, including VAT, per litre of petrol and diesel in carbon tax. However, this is offset by an equal reduction per litre of the national oil reserves levy, he says.
He says the price at the petrol pump won’t go up.
He now turns to climate change. He says the effects are more frequent and more destructive.
Budget 2023 will seek to tackle the issue, he says.
Carbon tax will go up from €41 per tonne to €48.50 per tonne from October.
The government is introducing a vacant homes tax with the aim of increasing housing supply. It will apply to any residential properties that are occupied for less than 30 days in a 12-month period, he says. Tax on these properties will be charged at three times the property’s existing local property tax rate, he says.
The new rent €500 tax credit is aimed at those who get no other housing supports, he adds.
The government will analyse a tax report that examined the impact of introducing an intermediate or third-rate of income tax. This analysis will commence immediately and conclude prior to next year’s summer economic statement, assisting the government in deciding whether to introduce such a rate, he says.
It is clear the Government can do more, and will do more, he says.
The Rent Credit of €500 per year has been confirmed.
He says the Government will consider a medium term road map for personal tax reform.
Housing is a central challenge facing the country, he says. Too many people cannot afford their own home or are spending too much of their income on rent.
He has announced an extension of the current excise reduction, as well as a €1.1 billion income tax package to help put money back in workers’ pockets.
Government must strike balance in this Budget by helping with cost of living while not making cost of living pressures worse by adding to the inflationary fire, he says.
At the end of August, tax revenues were about €10 billion ahead of of the same period last year, he adds. This has guided the scale of the measures this year.
The once-off package is worth €4.1 billion, and the main budget is worth €6.9 billion.
“I recognise these are significant figures,” he says. “I also recognise the needs of people are significant.”
Government must strike balance in this Budget by helping with cost of living while not making cost of living pressures worse by adding to the inflationary fire, he says.
He says the phasing out of Covid supports and the current tax take projections leave the country in a strong position.
On a per person basis, public debt amounts to about €44,000 per capita, one of the highest figures in the world, he says.
Income tax continues to perform well and reflect job markets “resilience”, he says.
He says Government will record a €1 billion surplus this year.
He says the Government understands the worries of people and will help the country to “overcome this challenge”. We will do this because economy has strong foundations, he says.
While war in Ukraine poses most immediate threat, Government is vigilant for other risks, he says, referencing Brexit.
He says the labour market has made a “remarkable recovery” over the past year.
Employment growth is expected to slow, but the unemployment rate is expected to remain at relatively low levels.
The pace of growth in the economy is expected to slow in the coming year as a result of inflation, he says.
Headline inflation in Ireland is now running at highs not seen in decades, he says.
He says his department is updating its headline inflation rates to 8.5 per cent for 2022 and just over 7 per cent for 2023.
He says we faced the pandemic with our public finances in good shape, and says today’s budget must ensure we have sufficient reserves for what the future may bring.
We must also be wary of the dangers of worsening the inflation situation, he says.
Donohoe opens his speech by referencing the Covid crisis and acknowledging the cost of living crisis which is crippling so many families.
He says families are facing higher grocery bills and energy bills.
This is why, he says, this “must be a cost of living budget”.
The Dáil chamber is packed out and Minister for Finance Paschal Donohoe is on his feet. We’re off.
In a pre-Budget promotional video, Tánaiste Leo Varadkar says: “Fine Gael is putting more money back in your pocket through income tax reductions and increases in the pension and some other welfare payments.”
Childcare and college costs will be reduced, while the Budget is also “backing businesses” by helping to pay their energy bills through the winter. Mr Varadkar says funding for extra gardaí will assist in building “safer and stronger communities”.
He adds that people can “rely on the Fine Gael team to make sure that our economy stays strong” so there is money to invest in infrastructure and support people with rising living costs.
We’re about a quarter of an hour away now from when Paschal Donohoe will take to his feet in the chamber.
Opposition parties have already begun to stick the boot in at Leinster House.
People before Profit TD Richard Boyd-Barrett has criticised the idea that the budget is a big giveaway.
“The simple fact is despite all the spin, the vast majority of workers, pensions, students and vulnerable people will be worse off next year, even after this budget, than they are now,” he said.
“The measures being proposed and mooted are drops in the ocean compared to the loss in income and the rise in costs that people have suffered to date and will continue to suffer after this budget.”
News just in from our political team of some last minute changes.
The total once-off spending measures in Budget 2023 has now reached €4.1 billion.
Some of the last minutes spending elements include:
- Funding for the recruitment of 1,000 extra gardaí and more than 400 new Garda staff to help free up frontline gardaí for core policing duties
- It is expected the tax-free threshold for voucher based bonuses that employers can give workers will be raised to €1,000
- There’s expected to be a €2 increase on qualifying child payments for the over and under 12s
- Publicly funded IVF will also begin in 2023 but the initial extent of this is still unclear
Our economics correspondent Eoin Burke Kennedy has some insight on the rainy day fund.
“The €2 billion expected to be placed in the so-called rainy day fund or whatever the fund is to be rebranded as is significantly bigger than anyone expected,” he says.
“If it is followed up by another €3 billion next year, we will – in two years – have created a mini buffer against future crises and started a long overdue project of putting aside some of this windfall, to be used more strategically.
“While the scale and source differs, there is a parallel between Norway’s oil wealth and Ireland’s multinational wealth. Both have transformed their respective economies; both have provided the exchequer with super-normal tax receipts.”
The proposed tax credit for renters in today’s budget will be gobbled up by landlords through rent increases, according to Social Democrats housing spokesman Cian O’Callaghan.
“Without properly enforced nationwide rent controls, the tax credit for renters will simply be eroded by landlords through further rent increases,” he said. “This will further fuel spiralling rent inflation.
“For this tax credit to really benefit renters, it must go hand in hand with properly enforced nationwide rent controls. It beggars belief that the Minister for Housing doesn’t understand this.”
Higher Education Minister Simon Harris said today is a “really important day”.
Channelling Barcelona Football Club, the Fine Gael Minister also said he is “very confident that we have used an awful lot of levers at our disposal to try and help students, parents and families of workers”.
“My message to students to parents, to families in general, is that help is on its way.”
Today’s budget is taking place against the backdrop of what has been happening just across the Irish Sea in recent days.
The British pound tumbled to a record low on Monday while UK government bonds extended heavy losses, stirring expectations of an emergency rise in UK interest rates in the wake of chancellor Kwasi Kwarteng’s package of tax cuts last week.
Taoiseach Micheál Martin said this morning that while government is focusing on its budget, it is conscious of the economic turmoil in the UK following the tax-cutting mini-budget announced last week.
“Europe and the UK are key partners, not just in the context of general economics but in the terms of the energy crisis as well,” he said.
“We will watch and monitor what is happening in the UK.
“But our main focus is on the Irish situation and how the crisis is impacting on people and households, on workers and in businesses and we want to protect jobs and that will be a significant part of the budget.”
Taoiseach Micheál Martin has said – you guessed it – the budget will aim to deal with the cost-of-living crisis.
“We will do it in a way that is sustainable, not just this year but throughout 2023,” Mr Martin said before the final pre-budget Cabinet meeting.
“It will mean investment in public services, it will mean significant reduction in costs for people, childcare education, health and also then allocating funding to people through taxation reductions, social welfare payments and energy credits.
“It’s a comprehensive package, but what we do have a significant eye on, 2023, and we have to be sustainable from a public finances perspective.
“In other words, have to make sure that not only do we get people through this winter in the teeth of this unprecedented crisis, but also make sure we have the reserves to get through the entirety of 2023 as well.”
As part of our build-up to today, we have canvassed the views of seven ordinary citizens from different backgrounds to get their views on what they want to see from the budget today.
You can read what they have to say here.
We also have a few lines from Green Party leader Eamon Ryan.
“It really is a budget to protect people through the winter and it can never be enough as we’re facing very high bills,” he has said in the past hour.
“We’ve done everything we can to try and help. Increased social welfare for those who are most at risk, help in energy credits for everyone, help in business supports, help people hold on to their jobs, help in free school books, college fees.
“There’s a lot in it, a whole variety of strands. Helping us through this winter is what this budget is about.”
Minister for Social Protection Heather Humphreys has said the budget will focus on “putting money back in people’s pockets”.
“I’ve a particular focus on people who have disabilities, carers, people who are working and pensioners,” she said. “It is a very strong and comprehensive package.”
Also on his way in, Tánaiste Leo Varadkar said Budget 2023 would offer some permanent changes that will help with the cost of living in the long term, reductions in the cost of childcare, putting a child through education and college.
“It’s designed to put money back in people’s pockets, to help people in business with the cost of energy and some permanent changes that will help with the cost of living in the long term,” he said.
“It’s about restoring confidence in the economy. This is being financed because we have a strong economy, not like across the water. It’s not being funded by borrowing.”
On his way into Cabinet this morning, Minister for Finance Paschal Donohoe said the Government would protect jobs and would be announcing a new support system for employers who are facing challenges regarding the rising cost of energy.
“I expect the measures will make a real difference to households and businesses at a time when they need help,” he said.