Minister for Public Expenditure Paschal Donohoe has downplayed suggestions of a substantial cost-of-living package in the budget in October by emphasising the sharp drop in inflation during the course of the year.
Mr Donohoe said there would be a package as prices were still high and the Government would continue to help families address the impact of the cost of living.
However, in an indication that the package will fall short of the €2.7 billion announced in one-off measures in last October’s budget, Mr Donohoe said the rapid decrease in inflation would have an impact on the scale of the spending package when Budget 2025 is announced on October 1st.
“Because inflation has come down so quickly, it will have an impact on the nature of possible new measures that we will enact come budget day,” he said.
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The Minister was speaking in Government Buildings on Thursday at the launch of the Mid-Year Expenditure Report.
There have been a number of such once-off packages in recent years prompted by hikes in energy prices, inflation increases, and general price increases. There was a €2.2 billion allocation in the Budget in October 2022, and a further €1.2 billion package in February 2023.
The measures were partly financed from windfall income, including higher-than-forecast corporation tax receipts.
Mr Donohoe said that the size of the package would be agreed by the three Coalition parties in September.
“We are now in an economy where inflation is about 2 per cent and not 10 per cent. Of course, that will influence the decisions that we will make, but we have yet to make those decisions,” he said.
Measures announced in the package in last October’s budget included a €300 lump sum for those entitled to fuel allowance, a €200 sum for pensioners, people with disabilities, or receiving a living alone allowance, and a €400 cup sum to those receiving the Working Family Payment.
It also included a double payment of Child Benefit to support all families with children.
Asked about data that showed 20 per cent of rented accommodation in Dublin was being provided by corporate landlords, and the number of small private landlords had all increased, Mr Donohoe argued that it showed the measures to incentivise small landlords introduced by the Government had worked, rather than the measures being unnecessary.
“The measures that we were brought in to support the private rental sector were about retention. It was about trying to keep private landlords within the rental sector. And I think it’s very positive news that we are seeing an early sign of even a potential increase of the number of smaller landlords within our economy.”
Mr Donohoe said his main concern was adequate rental supply. “We have always argued that you need a mix,” he said.
“If we want to provide a lot more rental properties, we need investors and companies who can deal with that scale. And the corporate sector is the only way that that can be done.”
He said the increase in smaller private landlords was a “very positive sign”.
“We need a diversity of provision ... We need smaller landlords but we also need large investors who can provide rental accommodation at scale,” he said.
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