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Thursday 7 December 2023 Dublin: 10°C Leo Varadkar speaking to the media yesterday at Government Buildings.
budget 2024

Tax package, energy and business supports to form part of October's giveaway budget

This year’s budget takes place on 10 October.

BUDGET DAY IS just over seven weeks away, but much of what is contained in the expected giveaway budget has already been well flagged by government leaders. 

Speaking to journalists at Government Buildings after the final Cabinet meeting before the summer break, Taoiseach Leo Varadkar indicated that further energy supports will be needed ahead of winter

Reductions in personal tax, business supports and a major package aimed at reducing child poverty was also flagged by the Fine Gael leader yesterday. 

Varadkar insisted he has not given up on the €1,000 tax cut pledge and said Fine Gael-led governments have given some earning €40,000 a year a tax cut of €3,000 since 2014.

“I really think there’s three things that we have to see in the budget. The first is a cost of living package to help people with the cost-of-living. Tax is part of that. So is pensions, welfare, reducing the cost of childcare, we need to see a focus on children, on child poverty and wellbeing, that’ll be a very strong theme in the budget,” said Varadkar. 

Businesses can also expect to see a boost in this year’s budget. The Taoiseach said that small businesses in particular are facing into some challenges, such as the rising costs of energy, flagged increases in the minimum wage, additional sick day provision and the auto-enrolment of workers in pension schemes.

“We’re also going to need to see help for business. Because business is going to face some significant costs in the coming months… I think they’re going to need some help with that,” he said, stating that Business Minister Simon Coveney is working on those possibilities now with Finance Minister Michael McGrath and Public Expenditure Minister Paschal Donohoe.

In terms of the tax package itself, the programme for government sets out the indexation of tax bands and tax credits “so that more people don’t end up paying the higher rate of tax”, Varadkar said. 

The details as to how to achieve this are yet to be finalised. 

The Taoiseach said the tax package of €1.1 billion announced in the summer economic statement is the net package not the gross package, stating that it is possible to add to that package through other revenue raising measures, similar to what was done last year.

So what else can we expect?

It has already been strongly indicated that a double child benefit payment will be contained in the budget, as well as further childcare cost cuts for parents. 

Minister for Children Roderic O’Gorman has set a target to cut childcare costs in half.

Although Varadkar has warned it probably won’t go that far. 

It has also been confirmed that State-funded parental leave will increase by another two weeks, meaning parents will be able to take up to nine weeks off after their children are born. 

Previously, Social Protection Minister Heather Humphreys indicated that a pension increase is on the cards for the 10 October budget, the day of the budget, stating that she wants to target pensioners, people with disabilities, and carers for supports. 

The Hot School Meals Programme is also set to be expanded.

The Government’s plan to introduce pay-related benefit, which links a person’s previous PRSI contributions to their social welfare supports if they lose their job is also at an “advanced stage”, the minister said, which could indicate that an announcement on the new system could form part of the budget this autumn. 

The Low Pay Commission has recommended that the national minimum wage increase from €11.30 to €12.70 per hour in the next budget. The government has adopted their recommendations in the past, so this could be likely again come October. 

Speaking to The Journal last year, O’Brien said that Government intends to increase the rent credit in Budget 2024.

“€1,000 per renter, €500 for 2022 and €500 for 2023: that will make a big difference for a lot of people and I do agree completely with the Taoiseach. That’s our starting position,” he said.

It has been previously flagged that tax breaks for landlords might be brought in to help keep them in the rental market, however, the government’s tax strategy papers published last week warns against such measures, so one to watch. 

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