One-off cost of living measures will be delivered before Christmas as part of the Budget but Taoiseach Leo Varadkar has sought to dampen expectations of a giveaway on the scale of last year, saying it would not be “prudent”.
Mr Varadkar was speaking with less than two weeks to go before Budget day, Tuesday October 10th.
Further energy credits – though perhaps smaller than the €200 payments offered previously – and a Christmas bonus welfare payments have been mooted as part of a package of cost-of-living measures.
The Government plans to spend about €1.1 billion on a tax package and an additional €5.25 billion in core spending – which is to include increases in weekly welfare payments and pensions.
Speaking to reporters on Friday Mr Varadkar said that the tax and welfare packages in the Budget will be similar in size to last year though “exactly how that breaks down has to be decided and has to be negotiated.”
He added: “What won’t be as big as last year is the one-off measures”.
Mr Varadkar said: “inflation is moderating, average pay is rising and we have to start pulling in those one-off measures.
“It wouldn’t be prudent to have one-off measures this year on the scale that we had last year, but there will be some and that money will be in people’s pockets before Christmas.”
The Fine Gael leader also said that inflation was around 10 per cent at the time of last year’s budget and it “is moderating and is coming down, but not as fast as we’d like it to.”
He said incomes have also risen by around 5 per cent in the last year “not for everyone, but on average” and “we have to take that into account in the context of the Budget.”
Mr Varadkar said: “It will be a good budget.
“There’ll be a tax package to help working people.
“There will be a welfare package as well and pension increases and also some further Government measures to reduce the cost of living for people.
“But it can’t be as big as it was last year you know by virtue of the fact that inflation has caused the cost of things to rise, to the cost of running a school, the cost of running a hospital, all those things has gone up.
“A lot of the additional money will go into that but there will be room for some improvements as well.”
Mr Varadkar also confirmed that preliminary discussions on a new public sector pay deal have begun.
He said: “The last agreed pay increase for public servants kicks in on the first of October.
“But I’m certain that unions will want to see further increases for next year taking into account inflation and some preliminary talks have begun in that regard.”
He said he does not think a new pay deal will be struck by Budget Day adding: “I certainly don’t anticipate it being balloted on by Budget Day.”
Mr Varadkar said: “I’d certainly hope it can be done through the course of October and November because hard working public servants, teachers, nurses, local authority workers will want to see pay increase in the new year, in addition to the one that’s happening on the first of October.”
He was speaking as he attended the opening of tech giant Intel’s new Fab 34 facility in Leixlip.