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Budget 2023 will be revealed today - here's a look at how things will unfold

Budget proceedings will kick off at 1pm.

Image: Sasko Lazarov

BUDGET 2023 TAKES place today, about two weeks earlier than it usually does each year.

While the last two budgets focused on Covid-19 supports, this year the focus is all on the rising cost-of-living.

A once-off package will be announced to address the inflation and energy crisis, which is set to cost more than €3 billion this year. 

The budget surplus due to a high tax take is now estimated at more than €4.4 billion. 

There is a lot already known – such as a new credit for renters that pay tax, free school books for children in primary school, a doubling of some welfare payments before Christmas, an energy credit worth €600 across three energy bills and a 25% reduction in childcare costs.

Both Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath are due to address TDs. 

Donohoe will take to his feet first at 1 pm to read his Budget speech.

McGrath will follow, with each of the ministers’ speeches due to last around 45 minutes – so we should be done by around 2.30 pm or shortly thereafter. 

As the main opposition party, Sinn Féin will get an hour in reply. The other opposition parties and groupings will get 45 minutes each. Speeches should be done by 8pm.

Voting on the Budget measures will get underway at 8.30pm, and is due to end by midnight.

Immediate changes will be voted in tonight (such as excise changes) but votes on some of the more substantive issues will take place over subsequent days. The cost-of-living package announced today is due to have immediate effect.

Much of the Budget reaction comes via press conferences and interviews in Buswells Hotel, across the road from Leinster House. Stakeholders and groups give their reactions to the announcements throughout the day, and there’s usually a sizeable encampment of TV and radio reporters at the venue. 

Protests outside the Dáil have also traditionally been a feature of Budget Day.

Government sources have said the budget is “quite tight” but that there are a lot of “significant measures” contained in the plan. “There are so many measures it’s hard to keep up with them all. Risk is we’ve missed something,” said one senior source. 

Finance Minister Paschal Donohoe has said he believes the budget will help with the cost-of-living concerns, stating that Government understands that people are living in “uncertain times” and are worried about the upcoming winter.

Public Expenditure Minister Michael McGrath said he has had “exhaustive talks” in recent weeks with Government ministers who all have significant demands for their respective departments.

This year’s budget should “make a real difference to people throughout the country”, he said. 

Donohoe said there were “demanding discussions” as the issues they are dealing with are serious, but he wanted to ensure careful use of the “money of the people of Ireland and putting it to effective use next year”. 

Much of the supports announced today “will start to flow quite quickly”, added McGrath.

What can we expect in the Budget speech?

Income tax / USC

  • The top tax band has been pushed out to €40k for single people and up to €80k for a couple – worth €800 a year to those on the higher rate and up to €1,600 for a couple
  • There will be some minor tweaks to the USC to take into account the rise in the minimum wage, as well as some small changes to PRSI

Housing

  • The much talked about tax credit for renters has been agreed. It will be per renter rather than per tenancy, so if there are two or three sharing a property they will all get the credit. While discussions are still underway on the amount it looks like it could be around €400-€500 range per renter
  • There will also be what sources describe as “minor changes” for the tax treatment of landlords
  • The Help-to-Buy Scheme is being extended for two years

Social Welfare

  • There will be a doubling of some welfare payments soon after the Budget
  • Social welfare payments set to increase by €12 per week overall, including the State pension
  • Fuel Allowance is set to be increased and the threshold changed to allow more people to become eligible. There will also be a €400 lump sum for those on fuel allowance
  • A widening of the eligibility criteria for the working family payment
  • A once-off payment of €500 for carers of people with a disability
  • A €200 lump for those on living alone allowance
  • Two double payments for all on social welfare at Christmas and Halloween

Childcare

  • A 25% reduction in childcare costs has been agreed as well as increased subsidies

Third-level Education

  • Third-level fees will drop by €1,000 in tomorrow’s Budget, with immediate effect
  • Any family earning under €100k will see a permanent reduction of €500 in fees
  • Any family earning under €62k will pay no more than €1,500 in fees
  • All students will see a €1000 reduction this year
  • All student grant recipients will get a double payment and PHD students will get a once-off cost of living payment before Christmas

Health

  • Over 430,000 people will be eligible for GP visit cards
  • Publicly-funded IVF will begin in 2023 under a new multi-million Euro fund
  • Hospital inpatient charges are being scrapped

Business

  • Two new schemes will be announced tomorrow to help businesses with the cost of electricity and gas. The first is a €200 million scheme administered by Enterprise Ireland for larger firms involved in exporting and manufacturing. Businesses can receive up to €2 million in financial aid. They will have to produce a business plan that shows how they will get through the crisis and control their energy costs.
  • The second scheme is targeted at SMEs. The TBESS – Temporary Business Energy Support Scheme, will cover 40% of the increase in electricity or gas bills, up to a maximum of €10,000 per month per business. It will be administered by the Revenue Commissioners, will be backdated to September, run at least to February and is estimated to cost around €1 billion.
  • These two measures will also be backed up by a new low-cost loan similar to the Brexit and Covid loans.

Justice

  • 1,000 new Gardaí into Templemore next year
  • Over 400 new Garda staff to help free up frontline Gardai for core policing duties
  • An increase in Garda overtime to help Gardai tackle crime and anti-social behaviour

Defence

  • The capital budget for Defence will be more than €176 million. This represents the biggest budget for defence equipment in the history of the state
  • The overall defence group will receive increased spending of €67 million, meaning a total spend of €1.17 billion on defence next year
  • An additional €47 million is also expected to be announced for defence pay and pensions
  • Defence Minister Simon Coveney is expected to allocate the money to a range of projects including: more than a dozen building projects at barracks around the country, radar technology, new vessels for the navy, new aircraft for the Air corp and more than €26 million of spending on armour and vehicles for the army

Other items of note:

  • Electricity credits amounting to €600 over three bills
  • Free school books for all primary school students from next September
  • Extension of public transport fare reductions
  • €1k tax free bonus allowed to be given by employers increased from €500
  • A Vacant Property Tax is also set to be a part of Budget 2023
  • The introduction of 0% tax on newspapers
  • An increase in the overseas development aid package.

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