THE Irish government has boosted benefits and pensions while giving new parents one-off lump sums of support in a budget ministers said was focused on pursuing “great opportunities that await”.
Finance Minister Jack Chambers said this year’s budget for 2025 has “the common good at its core” and provides a “unique” opportunity to provide for people and to transform Ireland.
Addressing the Dail chamber, he said the Irish economy is in “relatively good shape”, hailing a fall in inflation and a low unemployment rate of 4.5%.
He said that inflationary pressures had “eased considerably”, falling from close to 10% two years ago, to below 2% since March.
But Chambers (above) warned that the state’s reliance on billions in corporation taxes from multinationals must be “kept in mind”.
The €8.3 billion budget includes a wide range of tax reliefs and one-off welfare payments and comes amid mounting speculation that the coalition government in Dublin may move to call a General Election before the end of the year.
Among the most noteworthy measures announced in the budget are:
- A “baby boost” payment of €420 for newborns
- A €12 increase to welfare and pension payments
- A €250 increase in the rent tax credit, bringing it to €1000
- The threshold for paying the higher rate of income tax will increase by €2000 to €44,000
- A reduction in the Universal Social Charge (USC), a form of income tax from 4% to 3%
- The national minimum wage will increase to €13.50 from January 1
- An increase in stamp duty on the bulk buying of homes from 10% to 15%
- A reduced VAT rate of 9% for gas and electricity has been extended until April 30
- The cost of a packet of cigarettes is to increase to €18.05
- The cost of a typical disposable vape will rise to €9.23 including VAT.
Other noteworthy measures include increased access to IVF free of charge, and the introduction of free hormone replacement therapy from January, which could save women between €360 and €840 a year.
The Free Schoolbooks initiative to all transition and senior cycle pupils, and the Hot School Meals programme will be extended to all primary schools, including a pilot programme for school holidays.
The €1000 reduction in the student contribution will remain and funding will also continue for the continued school-transport fee reduction and State exam fee waiver.
An exemption from income tax, capital gains tax and capital acquisitions tax on payments made to the women impacted by the failures in the CervicalCheck scandal was also announced.
Chambers also suggested work would commence to investigate an income volatility scheme which farmers have long been calling for, as well as possible tax relief for people who use gyms or other fitness centres ahead of the next budget.
Another measure sees €13 million allocated to help integrate Ukrainians newly arrived in communities.
Chambers said that people remained concerned about high prices, while Public Expenditure Minister Paschal Donohoe said that price increases of 19% between January 2021 and August this year have left many worried.
They said this was why a cost-of-living package of €2.2 billion was being announced.
Among the measures in that package are:
- Two €125 energy credit payments
- Two double Child Benefit payments
- A €400 lump sum for those in receipt of the Working Family Payment
- A €300 lump sum for those in receipt of the Fuel Allowance
- A €200 lump sum for those in receipt of the Living Alone Allowance
At the outset of a budget speech to the Dail parliament, Chambers said the Irish economy was in a strong position.
“The outcomes of the progress made were not inevitable,” he said. “It is a result of the drive and the focus of this government to provide a better future for everyone and in the careful management of our public finances.
“I believe Budget 2025 puts in place the policies and measures to continue this positive trajectory and to ensure that all our people see a promising and hopeful future in this country.”
Chambers used the speech to signal that the Government will use €14.1bn of backdated taxes due from Apple to address challenges in “housing, energy, water and transport infrastructure”.
Donohoe said his officials would begin work on developing an investment framework for using the Apple funds, ensuring there was co-ordination with investments already planned through the National Development Plan.
Donohoe said he and Chambers had played “an essential role” in “lessening our problems” and “in pursuing the great opportunities that await”.
The minister also said he was making three billion euro from the sale of the state’s shares in the Allied Irish Banks (AIB) available for infrastructure spending.
Chambers said the Government wanted to give hope to young people that they will be able to afford their own home in Ireland.
“Budget 2025 puts the country on a firm putting for the future,” he said.
“Progressivity, fairness and catalysing real opportunity for the future have been at the core of this Government’s budgets and these principles have been central to how Budget 2025 was being designed.”
Ahead of the budget, the leaders of Ireland’s coalition Government insisted the measures will not further fuel inflation.
Taoiseach and Fine Gael leader Simon Harris said the Government had taken a “balanced approach” as he dismissed claims that he was trying to buy votes ahead of an election.
Harris said: “I make no apology, none whatsoever, for giving people a little bit of their own money back between now and Christmas, because that’s the buffer we need to provide people to allow the timeline between inflation falling and bills falling.”
Pressed on whether the giveaways in the Budget risked overheating the economy, Fianna Fail leader and deputy premier Micheal Martin (above) said: “I don’t think the Budget in itself would be a significant fueller of inflation.
“We have to keep all of those issues under review, obviously, over the next 12 months – but the economy right now is in a healthy space.”
Green Party leader and Children’s Minister Roderic O’Gorman told reporters on Tuesday that the Budget meets “requirements in terms of supporting parents, children and families and supporting the planet”.
The SNP have hailed the Irish budget as an example of what Scotland could do if it became an independent country.
Dave Doogan, the party's economy spokesperson, said: "The contrast between these islands couldn’t be clearer. Ireland – an independent country in the European Union – continues to prosper and progress while broken, Brexit Britain and its Prime Minister tells the public that ‘things can only get worse’. “In their budgets this month – Ireland has a €25bn surplus, Brexit Britain has a £22bn black hole – we will see a story of two states told through two budgets. “That contrast comes at a massive cost for Scotland. While Ireland helps its citizens through the cost-of-living crisis and invests in its future, Westminster and the UK Labour Government has made the political choice to impose more austerity."
