Commentators are united in agreeing that Budget ’24 will contain a rise in social welfare and old age pensions, a reduction in the universal social charge (USC) of at least half a per cent and a repeat of last year’s energy supplements – albeit at a lower level which will be introduced over the winter months. And there will also be tax incentives likely favouring the middle income bracket.
Other than that, what magic can Minister for Finance Michael McGrath and Minister for Public Expenditure, National Development Plan Delivery and Reform, Paschal Donohoe introduce next week? What can the lower income familyin Dublin hope to see when the briefcase is unlocked on Tuesday 10?
Social Welfare payments will go up, but by how much? €10, €12 per week? It is expected that third level inducements will be made to encourage lone parents wishing to access third level education and will no longer be applicable to full time education courses only.
Taoiseach Leo Varadkar had signalled his wish that this Budget properly addresses child poverty, and is working in tandem with Ministers Simon Harris and Norma Foley (Education) and Heather Humphries (Social Protection). The School Meals Programme will be extended to hundreds of schools, and the Children’s Dependent Allowance is also likely to be increased.
The cost of living keeps rising so unless the government pulls a rabbit out of the hat, nothing short of a miracle will be deemed appropriate to help the most vulnerable survive the months ahead.
Last year’s three supplements of €200 each were a welcome boost to cope with rising electric bills for Dublin householders. This year, indications are that it will likely be repeated but at a reduced amount of €100-€150 per payment.
Pressure has mounted not to see another increase in excise duty on fuel at the end of October. Currently, petrol costs over €1.90 per litre, another rise will see a litre costing €1.95/6 per litre – inching its way towards €2.
The Consumers Association says it is imperative that fuel prices are not increased. It argues the cost of fuel via delivery of goods to small businesses and retailers will only drive up the cost to the end user, the consumer.
Minister for Enterprise, Trade and Employment, Simon Coveney described the negotiations and pressure from all departments on Ministers McGrath and Donohue as “intensive”.
At a pre-Budget Breakfast last week, facilitated by Senator Fiona O’Loughlin, Minister McGrath spoke of the resilience of the Irish economy and its people.
Through the most turbulent of times, the Central Statistics Office (CSO) recently reported the highest number of people in employment since the data was first compiled in 1998.
“We need to make Ireland an attractive country to come and live in,” he told the guests. “The cost of doing business is a big challenge so decisions we make regarding the Budget must support businesses and families.”
The Chartered Accountants of Ireland said as a small, open economy, “Ireland’s successful tax policy has helped make Ireland a location of choice for multinational business. An attractive personal tax regime to keep and grow mobile talent to support the growth of domestic and international businesses in Ireland is essential.”
Above Minister McGrath is questioned on the forthcoming budget by Senator Fiona O’Loughlin in South Kildare last week. Photos Michael Connelly
It called on the government to widen personal tax bands and credits, to give consideration of a new intermediate tax rate – ideally 30 percent – along with the automatic indexation of credits and bands to help dampen the impact of inflation and protect the value of wages. Furthermore, taxation of share-based remuneration could also be simplified, plus improvements to the Special Assignee Relief Programme (SARP).
The Minister last week seemed to favour doing more to attract foreign investment, but also for entrepreneurs and SME’s and flagged “There would be a sharp focus on domestic business.” He spoke of increasing the Capital Expenditure Fund but also noted where to spend the surpluses and where to increase capital funding was the challenge.
Commentators are universally agreed that Budget 2024 will see a widening in tax-bands, which will largely benefit the middle-income earners, with an increase in PAYE credits, as per the Programme for Government.
But what will the Budget bring to home-owners struggling to pay mortgages, or for renters being priced out of the market? While the Eviction Ban reared its ugly head again last week, Mr McGrath said there must be more done to encourage landlords to stay in the rental market yet seemed to rule out tax breaks for aggrieved landlords. He did, however, hint that whatever incentives might be introduced, they must stabilise the market for both tenants and landlords.
He also noted that while Mr O’Brien’s Department has done much to increase the flow of housing, private, social and affordable, there needs to be a “well rounded package” delivered and a revision of planning laws as so many housing projects simply end up in the High Court or lengthy appeals.
He emphasised the importance of the Help to Buy First Home Scheme and hinted at mortgage measures over the past week for those who need supports. An increase in tax credits for renters has not been ruled out either.
With regards to the Disability and Care sectors, Mr McGrath seemed sympathetic to the growing disparity of pay between staff working in the care sector and what civil servants earn. The pay differential is a big challenge, he noted and stated he was engaging with Mr Donohue to address the issues in Sector 39. The waits for people to enter residential care are too long but he said, “progress will be made” in conjunction with Ms Rabbitte’s office.
So, apart from a reduction in USC, an expected increase in social welfare payments, the widening of tax bands to protect the middle income earners, energy supplements, child poverty initiatives, possible mortgage relief and hopefully, a stay on fuel prices for now, we know very little tangible details of what Budget 2024 will bring. It’s all speculation and anticipation. And until the briefcase is opened next Tuesday, we have no idea how many rabbits will be pulled out of the hat!
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