AVERAGE WORKERS WILL benefit by €1,000 in this year’s budget, according to Finance Minister Jack Chambers.
Speaking to reporters at the Fianna Fáil think-in in Killiney this afternoon, the minister said between income tax reductions, which will include USC cuts, and the cost-of-living payments in Budget 2025, workers will have around €1,000 back in their pockets.
He said the reductions in the USC will be a “central component” of the income tax package which the minister said will target low and middle income earners.
When asked if he would not consider doing something bold in his first budget, such as scrapping the USC altogether, he joked:
If I was to that, it will definitely be my last.
He said any party that suggests removing it overnight is costing the Exchequer €5 billion.
“If you remove €5 billion from permanent tax take, you have to find it elsewhere, and so we’re being honest about what’s possible, and again, we’re prioritizing USC in how we design our income tax package,” said Chambers.
It is expected the USC will be cut by another half point, but the finance minister would not confirm the percentage today.
Speaking about energy credits, he confirmed that the payments would be made by the end of the year.
He said energy prices are still affecting many families across the country, stating that the energy credits will be a “strong component of a cost living package”.
Chambers wouldn’t confirm if the energy credits will be given to households in one lump sum or split between a number of payments, stating:
“There is consensus in government of having an energy credit to support people through the winter period, whatever feeds into next year has to take account to the new fiscal rules that we’re in. And that will, I suppose, that will dictate how we decide to spread payments.”
The roll out of energy credits is about protecting families and ensuring that the energy costs which are still in our economy are mitigated through the winter period, the minister said.
Chambers confirmed that AIB share sales, which took in €3 billion, will be used for housing, driving affordability and additional supply, while also addressing the deficits in water and energy infrastructure.
While there has been speculation about double child benefits being on the cards, the minister would not be drawn on the matter, stating inflation, energy prices, childcare and other issues are still impacting families.
“Child benefits is an important component of that, whether it’s through cost of living or indeed the wider social protection,” he said.
Speaking about the rezoned land hoarding tax issue, which has been an issue of disagreement between the coalition parties over the summer, the finance minister said there has been consensus from all three government parties on excluding active farmers from the tax.
The minister said many farmers legitimately raised serious concerns that if they were to be included in the tax it could put them out of business.
He said a process is being designed which ensures active farmers have a route out of the tax, but that those who are hoarding land would still be subjected to the tax.
“And there’s a good discussion on it between three parties last week, and I think we have a way forward which I’ll be able to set out on budget day,” he said.
In terms of the hospitality sector, retailers and small to medium enterprises, Chambers said there is a need to make sure that the policy decisions made are sustainable for those business in the medium-to-long term.
Competitiveness issues “which have been well flagged”, will be dealt with and reflected on in the budget.
Social Protection Minister Heather Humphreys has said previously she would like to see pay-related maternity benefit rolled out.
While it is not likely to be announced in budget 2025, Chambers said it is an ambition he would share with Humphreys.
“We’re absolutely keen on making sure we’ve progressive measures taken when it comes to social protection, and that’s a policy measure I think should be advanced in the years ahead.
“We can’t do everything in Budget 2025 but I would share that ambition on driving that from social protection perspective.”
A spat between the Green Party and the rest of the coalition played out last month after it was suggested that a tax on those who own land that is zoned and serviced for residential developments would be left out of the Budget.
The Greens were said to have been “blindsided” by an announcement that the introduction of the – already delayed – fees would be further postponed. Since, the Coalition have been in ongoing talks to resolve the issue.
Farmers believe, however, that the fee unfairly targets them as some of their land may go unused for particular portions of the year and the finance department have been looking at ways to exclude the cohort.
A final decision is expected to be agreed upon before Budget day, but Green Party Leader Roderic O’Gorman today told The Journal that a resolution has yet to be set out – two weeks away from 1 October.
Asked if he believed discussions were taking too long, O’Gorman said: “I feel good work is taking place, but no final decisions have been made.”
He added that the Green Party believes the tax must be put in place to tackle those hoarding land and so that the Government is “seen as being serious in tackling the housing crisis”.
Asked again if he thinks the discussions should be better prioritised, the Green leader said: “We have good engagement with officials from the Department of Finance, and I know this issue has been taken really seriously.”
Includes reporting by Muiris O’Cearbhaill
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