Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
FINANCE MINISTER MICHAEL McGrath has said that he is “not ruling out” introducing additional measures to help people deal with the cost-of-living crisis amid a “disconnect” between the predicted Budget surplus and ordinary households.
However, he said that it was important to wait until Budget 2024 before implementing any such measures.
The Minister was speaking on RTÉ’s Morning Ireland in relation to the government’s latest economic forecasts and public finances, released yesterday, which showed a budget surplus of €16.2 billion is predicted for next year.
McGrath said that while inflation is expected to be around 5% on average next year, it is “absolutely the case” that while the State’s finances are strong, the benefits are not being felt in households around the country.
“I’m so conscious that while we are here talking about billions of euros of surpluses and bumper corporation tax receipts, the lived reality of many Irish people and the people I represent is very, very different,” he said.
“Of course we will do the very best we can with the resources that we have while being sensible and prudent in the management of the public finances, to help people and to ease the burden.”
“I think when people look in good faith at what we’ve done so far, the exceptional measures we have introduced €12 billion in the last 14 or 15 months to help people with cost of living, I think people will see that there is a commitment there… so I’m not ruling out doing more.”
McGrath said he believes we will have a “good budget” in Autumn and that it is important to wait until then to implement cost-of-living measures in order to take time and give them careful consideration.
He said everyone can see the effects of inflation in their daily lives, but acknowledged that not everyone has the capacity to handle it equally.
“We’ve helped a lot so far and depending on the circumstances that prevail in the months ahead, there is a willingness to do more.”
He also said he recognises the “disconnect” between the figures published in the Stability Update Programme yesterday for people concerned about becoming homeless in the coming weeks following the lifting of the eviction ban.
He said the figures are “really positive and this is a good news story for Ireland because it does give us the financial firepower and capacity to address the major challenges that we face”.
For those facing homelessness, he said: “We have to help them, and that’s why through the work of Minister Dara O’Brien, the local authorities and the housing agency, we are determined to put solutions in place for people who find themselves in a situation where they may lose their home or they currently don’t have a home.”
When asked yesterday whether we could expect a giveaway budget given the surplus, McGrath tempered expectations, though couldn’t deny the increased cash at the government’s disposal, stating that the Stability Programme Update is just one of the building blocks in the construction of Budget 2024.
Last year’s budget had a package worth €11 billion – €4 billion of which was for one off measures due to the “nature that was the environment where inflation last year averaged about 8%”, said the minister.
Yesterday’s update predicts that inflation this year will average between 4% and 5%, down from the current rate of 7%.
Pointing out that inflation will be lower this year, he said the context in which budgetary decisions are made must be considered.
He added that last year, the government’s budget expenditure rule was adjusted to allow for greater spending due to the high level of inflation.
“One of the factors to consider in the next number of weeks is what is the appropriate budgetary expanse for 2024.”
The minister said that work is ongoing and it is “too early to give any indication” as to the nature of the composition of the budget will be.
The expected surplus is being driven by strong corporation tax receipts, which ministers said could dry up at any time and therefore cannot be relied upon.
The government’s chief economist said the windfall corporation tax receipts are not predicted to fall within the next few years, but added “that day will come’.
Corporation tax of €3.2 billion was collected between January and March, up from €1.9 billion in the same three months last year.
McGrath told reporters he expects corporation tax receipts this year will exceed last year’s record €22.6 billion, calling it “truly exceptional”.
To embed this post, copy the code below on your site
End the USC, help the working people
@Tony Brady: Will never happen. Pascal even admitted this on radio yesterday
With the rumoured surpluses today for this year and next, they could afford to give people the services they need and deserve. People with children awaiting assessments of need for disgracefully long periods of time. Start paying nurses, doctors, teachers properly. Cut waiting lists and treat people. I could go on, but knowing this country it will all be squandered yet again.
@Declan Moran: I’m surprised you didn’t want it all sent to Ukraine.
@west awake: go back to sleep
@Declan Moran: they won’t be used to improve public services. They will continue to run down public services until the only option left is to introduce more private services. As for Budget 2024, what about now?
Stop the eminent fuel tax increase
@David Mercedes: that’s conveniently forgotten! Will be €2 again by end of year and they’ll say “oh there’s nothing we can do” …..
I thought we owed €240,000,000,000 debt, shouldn’t we sort that out first?
A large surplus like this is a great opportunity for the government to get creative on big ticket items as suggested here, abolish the USC, invest in social housing, public transport etc. Big projects. Unfortunately, politicians live by the parish pump so it’ll be frittered away on little tokens. An extra fiver on social welfare payments, “bonus” one off payments to certain welfare recipients. All temporal that don’t get to the root of the issue. Politician need to step up and get creative and think long term.
A budget surplus of €12bn could go a long way to building a decent public transport system in Dublin, increasing hospital capacity in Limerick and Cork where there is huge overcrowding and building more affordable homes but will any of these things happen? I wouldn’t hold my breath .
Loads of cash, and not a clue what to do with it!
That should be enough to get rid of USC. Additional money in people pockets will allow more money to go into the states coffers. Also finally help the people who pay for all this. The workers. I bet they are thinking about this in next budget as an election tactic.
@Will Roche: Well said. Definitely next year we’ll be hearing about the record surplus for 2024 all over election time
Just give taxes back to working people. If you have a surplus with such bad public services, you don’t need to put those taxes brackets.
We need houses and we’ve a huge SURPLUS coming in?
D’uh, what could we do???
Unbelievable
What’s going on in this country when government ministers are saying they have billions to spend on asylum seekers, homeless people, Ukrainians etc., but will not increase the tax threshold on inheritances for children and forcing the sale of houses after the death of the parent in one child families.
Economics for dummies brought to you by the government of Ireland. Inflation still increasing. Solution. Pump more money into the economy.
@Niall English: If inflation were that simple, economics would be redundant. It’s a lot more complex than that. The recent advent of inflation has led the European Central Bank to identify excessive company profits as a bigger driver of inflation than wage demand. Many commentators are quick to try to dampen down wage demands with talk of a wage-price spiral situation. I think most working people can see through those arguments, particularly when they are exposed to obvious price-gouging. There can be no sustainable case for wage moderation or a decrease in spending while inflation continues to be driven by excessive company profits, neither in the public or private sector.
More prompt proactivity needed.
40000 as the start of the 40% tax band is crazy. Average earners are paying into this. This should be moved up to and over 50000 incrementally over the next few years. A couple need to be earning 60000 each to get a modest mortgage. They are paying highest rate of tax……crazy
for нот chat url1.io/s/4xY5X
There’ll be one for everybody in the audience, before the elections.
have your say