BUDGET 2025 IS more than two months from being delivered, but the annual summer tradition of kite-flying by members of the Government is well and truly underway. 

Last week’s publication of the Summer Economic Statement acted as a starting gun for speculation on what could be announced on 1 October. 

So what do we know so far about what the budget might contain?

The level of additional public spending for this year’s budget will amount to €6.9 billion, with taxation measures set to make up €1.4 billion of that and new spending to make up €1.8 billion.

However, additional money tends to be found down the back of the couch days before the budget is announced every year, so those figures could rise.

The main talking point this week was inheritance tax and how changes to it could be on the cards. 

The Journal asked Simon Harris about the tax earlier this week, and the Taoiseach strongly indicated that some reforms to it will be announced in October. 

Harris claimed that the “unfairness” in the system of inheritance tax deserved consideration, while Tánaiste Micheál Martin also said inheritance tax is “punitive” for some families.

Although the two Government leaders would not be drawn on specifics, there is some some talk that the amount that children can inherit from their parents tax-free could rise from €335,000 to €400,000.

The Department of Finance estimates that this would cost around €52 million.

Meanwhile, the coalition leaders have said that the Government’s main focus will be on income tax, and have indicated that the standard rate band will continue to rise in this year’s budget.

Fine Gael want the level at which people enter the higher rate of tax to reach €50,000 in the coming years – with a gradual process to increase the threshold over time – so people on higher incomes get to keep more of their earnings. 

There’s also been some talk about the Universal Social Charge (USC), with the Tánaiste indicating that cuts could be made here, though he said nothing had been decided upon yet.

Fianna Fáil and Fine Gael ministers are in favour of cutting USC by 0.5%, which would be the same cut that was in last year’s budget.

The Rent Tax Credit is almost certain to increase again this year, with Housing Minister Darragh O’Brien previously indicating that it could rise from €750 to €1,000 per person. 

Hot school meals are set to be extended to all primary school children, while free school books will also be extended to Leaving Cert students. 

The Government is expected to increase the pension by at least €12 per week, with Social Protection Minister Heather Humphreys indicating this week that the social protection budget will be largest in history, amounting to €1.2 billion.

She also indicated that the overall social welfare package will focus on vulnerable groups, including carers, those with a disability, working families and pensioners. 

It’s not known what childcare measures are on the cards and whether further cuts to the cost of childcare for parents will be announced. 

While there has been serious lobbying from the hospitality sector for the VAT rate to be cut to 9%, senior sources have indicated that it would be difficult to achieve.

One source said that the rate of some hotel room prices are to blame for the Government not being able to push that measure through.

A question mark also hangs over electricity credits – a one-off cost-of-living measure that has become a bit of an annual staple – with early indications that they will not be rolled out again due to the fall in inflation.

And it’s still not known what will happen to public transport fares, another cost-of-living measure, though the Greens want to see fare reductions maintained.