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WE’RE THREE DAYS out from Budget 2025 and while the final figures won’t be unveiled until Tuesday, leaders haven’t shied away from kite flying.
With a projected surplus of €8.6 billion, and Apple’s €14 billion on the way, some people are calling for yet another “giveaway Budget”.
Whether it be November, February, or somewhere in between, a general election is around the corner, and the reaction to this Budget may help or hinder the government’s performance at the polls.
Here’s what we know about it so far.
Finance Minister Jack Chambers last week poured cold water on speculation of a giveaway-Budget, telling reporters that the cost-of-living package won’t be as big as it was in recent years.
Chambers said that although the rate of inflation has reduced, household costs – particularly energy bills – are still high, and as such cost-of-living measures are required but at a reduced scale compared to previous years.
Harris has strongly indicated that some reforms to inheritance tax will be announced, labeling the current system “unfair”.
Currently, if a child inherits from a parent, they pay no tax on the first €335,000 and then they pay 33% capital acquisition tax on everything above that threshold.
Suggestions ahead of the budget are that this threshold is set to rise to €400,000.
There’s also been some talk about the Universal Social Charge (USC), with Tánaiste Micheál Martin indicating that cuts could be made – 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 standard rate tax cut-off point may be increased by €2,000 , RTÉ News reported, so people could pay the lower 20% rate of income tax on earnings up to €44,000.
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.
The Help to Buy scheme, which gives first-time buyers up to €30,000 of their tax back towards a deposit for a new-build home, is currently set to end next year. It’s understood that Housing Minister Darragh O’Brien is pushing for it to be extended as one of his key Budget priorities.
It’s also understood that he is looking for the €500,000 cap on home prices to be extended to expand eligibility for the scheme.
Health Minister Stephen Donnelly has stated that he would like to extend the free contraception scheme for women to include 16-year-old girls. At the moment, women and girls aged 17-35 are included in the scheme.
Green Party leader and Minister for Children Roderic O’Gorman has confirmed that the childcare budget for 2025 will be over €1.2 billion – almost double what it was four years ago when he entered the role. But don’t expect to see the cost of childcare to reduce any further as a result.
With a 25% cut in the average cost of childcare kicking in last month, further changes aren’t expected as part of this year’s Budget.
There have been strong indications that the double child benefit payment ahead of Christmas will go ahead again this year, with Social Protection Minister Heather Humphreys hailing it as “extremely popular”.
It’s also expected that Child Benefit will be increased by €10 to €150 a month.
We’ve also seen O’Gorman float the idea of a one-off €560 ‘baby boost’ payment for parents with new children, a proposal Humphreys has also backed as a “good idea”.
Whether this will be approved by Minister for Public Expenditure Paschal Donohoe remains to be seen.
Humphreys indicated last month that there will be no increase to the Jobseeker’s Allowance, which currently stands at €232, given that Ireland is at full employment.
The minister has said pensioners, carers and people with disabilities should be prioritised as part of this Budget.
It’s expected that the pension will increase by €12 a week, the same as in the last two years, but Humphreys is under pressure from her own Fine Gael party colleagues to raise it further by €20 a week.
For now it’s unclear if she will go that far.
Last year’s Budget saw the student contribution fee paid by college students cut by €1,000, bringing the cost of one year in university to €2,000. However, this was only as a once-off.
It’s expected that the contribution fee will be cut by €500 this year by Higher Education Minister Patrick O’Donovan on a permanent basis, bringing the cost of one year in university to €2,500 for those who don’t qualify for a grant.
It’s understood that an increase to the household threshold for the SUSI grant is also on the table alongside an increase to the maximum grant on offer.
O’Donovan is understood to also be pushing for changes that would allow students to earn an extra €10,000 outside of term time, without this impacting their eligibility for the SUSI grant.
In terms of housing for students, sources have indicated that O’Donovan is pushing to get access to some of the Housing for All budget for student accommodation.
No guarantees have been given, but the Taoiseach himself has said the USC surcharge on self-employed income is “unfinished business”, so watch this space.
There’s also been huge pressure from the hospitality sector for the 13.5% VAT rate to be cut to 9% as was the case during the pandemic, but it’s understood that this is unlikely.
While Enterprise Minister Peter Burke and many of his Fine Gael colleagues are in favour of such a move, Finance Minister Jack Chambers is less so and looks likely to put his foot down.
Plans proposed by the Green Party are currently being considered to extend free public transport to all children under the age of nine.
Currently, children under five years of age go free.
This month, the European Court of Justice ruled that Apple must cough up its unpaid taxes which, adjusted for inflation, amount to over €14 billion.
The public and opposition were quick to suggest a ream of ways the money could be used effectively – solving the housing crisis, expanding public transport infrastructure, giving everyone some pocket money.
The Taoiseach has warned not to expect short-term injections of cash from the tax, as the money will likely go towards the “future needs” of the country – although he didn’t specify which ones.
Simon Harris did hint however that there are “real possibilities here in relation to housing”. That said, even if the €14 billion won’t feature directly in the Budget next Tuesday, the fact that it’s coming down the tracks may give the government a slightly freer hand to up the ante in terms of one-off measures this time around.
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Excellent article, the Irish state must have the best minds on this. Apple may be a one-off, but if anything is found re the Apple tax arrangements the investigators will be looking at other multinationals located in Ireland.
Apples is not a one off but at least they can justify their tax deal with the amount if people they employ here. There are several companies who employ very few here that have similar deals
The EU is not interested in how many people they employ. They are interested in tax rules. And they will fine if they find fault and as usual not care about potential damage to the people of Ireland.
It’s quite shocking how people wrap themselves in the national flag to defend these highly questionable tax arrangements. Apple has made staggering profits, paying hardly any tax in Ireland or elsewhere in the EU. It contributes very little to the Irish or European economy. In a time where the poor and vulnerable are paying the highest cost for economic crisis it is only fair that these multinationals pay a fair share.
It’s not that black and white. They leave Ireland – then say goodbye to over 3000 jobs in Cork. It would be catastrophic to the area.
indeed it would be “fair” that Apple does not take advantage of a favourable tax deal with Ireland. It would be “fair” that it paid tax in France for the profit made in France. The point here is that it would be a serious blow to the Irish economy because, yes, we are partly funded by the money we unfairly allow companies to not pay into other countries’ tax coffers. Any return to “fairness” here would be our loss. So if you want fairness, be prepared to pay more tax, Dom, as we may soon lose the taxes (unfairly) paid by Apple here.
If there is proved to be a sweetheart deal with Apple, as opposed to Apple taking advantage of a loophole, we should not defend the indefensible. We should close the gaps open to creative accounting, remove the Double Irish loophole and lower the corporation tax rate to 9% to offset losses. Our tax regime should be airtight legally, but low in percentage.
Hi Neil
Thanks for the comment.
The matter is not one of defending the action, it is about defending the country from having to pay a fine that would wreck the public finances. Companies are now being fined close to €1Bn. A similar or larger fine would do horrible damage to the country.
Bye, bye apple. The core is now rotten. Time to plant the seed somewhere else. USA up to its old tricks again.
Apple metaphors. Nice.
Scary
Are people not aware you or I would go to prison if we engaged in the same practice’s as Apple and the rest. Tax dodging is tax dodging end of. While they might benefit cork., they do nothing for our economy as a whole. So we continue to get hit with more taxes while these parasites avoid contributing.
13 trillion folks and that is only the tip of the iceberg of what these parasites are hiding in taxes globally. Wake up.
so say they find ireland and apple clean does this mean the irish state can sue the US senate and newspapers and media that actually might not of done any back checking at all so we could get rid of water charges and property tax cause that would be swell but you know thats a if ireland are clean sure we will be grand ;)
Our problem is we think if we don’t give into these big companies they will leave, now its too late we did it once too often. The Governments have over the years sold this Country
as a free for all, just look at the expense of medicines here the highest in Europe. Our government thinks thats ok.
Sure they will pay they wont say a word
Lets show them by uniting next Saturday for the water rates, and we wont stop there.
Why do we sell ourselves short
Interesting.
have your say