Readers like you keep news free for everyone.

More than 5,000 readers have already pitched in to keep free access to The Journal.

For the price of one cup of coffee each week you can help keep paywalls away.

Support us today
Not now
Advertisement

'Difficult' to say whether Budget will leave people better off, says Donohoe

Budget 2023 will be announced on 27 September.

Image: Sasko Lazarov

Updated Jul 5th 2022, 10:49 AM

FINANCE MINISTER PASCHAL Donohoe has said it is “genuinely difficult” to say whether people will be better off after Budget 2023.

Donohoe announced yesterday that this year’s budget package will be €6.7 billion, and it will be announced two weeks earlier than usual, on 27 September.

Speaking on RTÉ Radio’s Morning Ireland today, Donohoe said “the nature of the real increase will be communicated and decided on Budget Day.

When asked whether people would see a real income increase after the budget, he said: “I think it’s genuinely difficult to answer that question today, given the uncertainty that is surrounding us at the moment.

I would be very, very wary of making predictions regarding what 2023 will hold and what will be the conditions that our workers, our businesses, may confront

He would not say what sort of measures would be in the budget to address the cost-of-living crisis, but said the government was aware of the costs families were facing ahead of back to school. “We are considering can additional help be provided. But a decision has not yet been made.”

On the same programme, People Before Profit TD Richard Boyd Barrett said that low-income households were the worst affected by spiralling inflation, and that some were set to effectively lose €3,500 if their wages did not go up.

He took issue with the government’s argument that prices were going up because of the war in Ukraine: “Look at the housing and rental crisis – that long predates the Ukrainian war.

“If we do not take measures to address [housing] …. We are really facing a catastrophe.”

Corporate tax

The Department of Finance is projecting a modest surplus for this year and next because of the strength of corporation tax receipts.

Donohoe said that such receipts have increased to €8 billion this year, compared to €5 million last year, but that money has not been spent.

Speaking on Today With Claire Byrne, Tánaiste Leo Varadkar said that “corporation profit tax receipts which are going to continue to improve over the next couple of years, i’m confident of that, but they won’t forever.”

Both he and Donohoe said the government was anxious to avoid implementing measures to help people this year which would be taken away the following year.

Varadkar said: “My view is: we shouldn’t spend all of that – we should give a lot of a back to people, because people need help with the cost of living of course – but we could probably set some of it aside as well.

He said he understood that this would be frustrating for people to hear if they were struggling to pay for food or petrol, but added: “I think people also understand that it makes sense to be prudent.

We don’t want to get into a situation where we’re using borrowed money. Or we’re making one-off commitments or making commitments long term that can’t be repeated.

“I’m not saying at all that we’re not going to spend billions of euros helping people the cost of living – we are.”

Middle incomes

Varadkar was adamant that measures to help people should be a combination of universal schemes and “targeted” efforts for the least well-off.

“Everyone is feeling squeezed,” he said. “The average person in Ireland working full time earns about €45,000 euros a year. If the ESRI and the opposition are saying we shouldn’t help them, I disagree, because these are my constituents – they’re people I know I meet them all the time.

“They’re people on middle incomes, maybe even good incomes, on paper, but when you take into account the cost of the income tax they have to pay, child care, rent, mortgage, they can often be struggling to make ends meet as much as somebody on a low income and that’s my experience. And that’s why I think we should have universal measures that benefit people on middle incomes, but those on the lowest incomes should get mor

Making a difference

A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article.

Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

For the price of one cup of coffee each week you can make sure we can keep reliable, meaningful news open to everyone regardless of their ability to pay.

About the author:

Read next:

COMMENTS (41)

This is YOUR comments community. Stay civil, stay constructive, stay on topic. Please familiarise yourself with our comments policy here before taking part.
write a comment

    Leave a commentcancel