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MINISTER FOR FINANCE Michael McGrath said today that the Budget 2024 will be “prudent” and will provide “an appropriate level of support to our society and our economy”.
Speaking to reporters before the National Economic Dialogue (NED) in Dublin Castle today, the Finance Minister said the next budget will take into consideration an ongoing review of the personal taxation code, although no policy decision has been made as of yet.
Taoiseach Leo Varadkar, while addressing the NED today, said it was his party’s policy to get to the point that nobody earning less than €50,000 would have to pay the higher rate of income tax.
The dialogue is an integral part of the annual budgetary procedure and provides a platform for discussion on a wide range of issues from key stakeholders.
Addressing the current expected surpluses in the public finances, McGrath said: “It will be a prudent budget but it will also seek to respond to the pressures that are there.
“It will be within certain parameters and one of those parameters is not using windfall, volatile receipts to fund permanent measures.
“That will be one of the anchors of this budget,” he added.
Using windfall tax receipts for long-term, permanent projects was accepted across the political spectrum today.
Minister for Public Expenditure and Reform Paschal Donohoe said it is “so important” to consider the risks when determining how to use the surplus and that government must make sure that future budgets remain affordable.
Donohoe said: “Both of us experienced the political and social cost of what happens when the budget announcements of one year, become unaffordable the next year. And none of us want to see that happen again.”
The minister said: “You can only appreciate their value when you can see the uncertainty and the risks now taking place around us.”
“We still need to be careful. We need to make sure that money we are spending in 2024 is still there for us in 2025 and 2026,” the Minister added.
The Taoiseach said he recognised the advice from the Central Bank and the Irish Fiscal Advisory that windfall tax receipts cannot be used to fund permanent or recurring expenditure commitments.
“But even if you accept the position, we still have plenty of room because of the growth of the economy.”
He said there were false dichotomies in the choices of saving or spending the surplus, as well as whether to reduce taxes or increase spending.
McGrath said his “overarching priorities” for the upcoming budget include the protection of living standards.
“It’s trying to strike the right balance between providing an appropriate level of support to our society and our economy while at the same time not stoking inflation any further,” McGrath said.
“That will involve decisions around taxation and welfare and trying to reduce costs for families.”
He said other priorities include housing and investment in public services and infrastructure
Donohoe agreed that progressing housing will be a “critical element” for the Government when drafting Budget 2024.
“So it’s trying to strike the right balance between providing an appropriate level of support to our society and our economy while at the same time not stoking inflation any further,” McGrath said.
However Varadkar said a “more cautious approach” to the next budget could “push more people into poverty or financial distress” in his address to the dialogue.
An Taoiseach added that the government must not disregard households who face financial difficulties regardless of the state of the economy.
Varadkar said the strength of the economy enabled the government to make a wide range of measures.
“We’re able to reduce income taxes, we’re able to increase spending, we’re able to reduce the debt, we’re able invest more in services and infrastructure, we’re able to set aside money for future problems.
“We can do all of those things, it’s not a choice among them. The choice is a different one; it is the quantum or the split.”
The Fine Gael leader said it was his party policy to get to the point that nobody earning less than €50,000 would have to pay the higher rate of income tax.
Varadkar added: “Whether we can achieve that in the next two budgets, I can’t say.”
As it stands, the higher rate of tax kicks in at income above €40,000.
The Taoiseach said in his opening speech that isn’t is “simply not fair” that average full-time workers are “hit with the higher rate of income tax”.
“And it’s not fair that the tax system erodes any pay increase they do get, or overtime worked,” Varadkar added.
He said that this practice of taxation “isn’t the norm in competitor countries” that much of the younger generations are emigrating to.
Varakdar said: “In line with the Programme for Government, this budget should make substantial progress on lifting the point at which an individual pays the higher rate of income tax and it should also benefit all income tax payers to ensure fairness.
“This will increase take-home pay and will help with consumer confidence and demand. It should also help moderate demands on employers for bigger increases.”
Donohoe said Government has decided to increase capital investment next year and that this had been decided under the National Development Plan.
Tánaiste Mícheál Martin said Fianna Fáil believe there will be a “taxation package” within the upcoming budget but the details of that will be upon the government to side “in due course”.
Martin said: “[Fianna Fáil] want a fair taxation system that all workers will benefit from whatever measures that we bring in.”
McGrath said he expects to index tax credits and bands in the next budget.
He said the economy is close to capacity with record-low unemployment.
“The scarcity of labour is now a key constraint across different parts of the economy. That said, if you do not make any changes to your taxation system, it will remain static at a time of rising incomes.
“In effect, representing an increase in the burden of taxation through the back door.”
He said there was a programme for government commitment to indexing tax credits and bands.
“I expect, given the strong position in our finances, that is a commitment we will again be able to honour in the forthcoming budget.”
Minister for Enterprise Simon Coveney said there had been “extraordinary growth” in job numbers in Ireland.
Asked about job cuts in the technology sector, he said that a lot of global companies have “effectively taken back” the unstable growth and job creation of past year.
“This is obviously something we’re following closely but I would say the motivation behind these decisions is very much driven by global factors, not Irish factors.”
He said the impact of job cuts has hit a smaller percentage in Ireland than the overall tech sector globally.
“We need to stay close to these big firms to understand their thinking and plan for that.”
Minister for Higher Education Simon Harris said he planned to bring forward measures in the budget which would increase flexibility in the education system, change student grant schemes and introduce more short-term and online courses.
He said he was hopeful to reach 9,000 new apprenticeships this year.
An Taoiseach told the dialogue that the economy is in a “much stronger position” and that a record 2.6 billion people are employed in the country.
Varadkar said “there’s a job for everyone who wants one” and that policy currently being developed by the government is aiming to make sure it’s kept as such through improving incomes and wages.
Additional reporting by Muiris O’Cearbhaill
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I have no confidence in any of those ministers. They are making things up as they go along. They don’t manage the counties resources for the beneift of the country and her people. They use the countries resources and cash to buy votes to keep themselves in their lavish lifestyles.
Half of them are uneducated failures. Failed school teachers, publicans and farmers. We need to build the political system from the ground up as clearly the current one isn’t working.
@David Corrigan: Couldn’t agree more, politician must be the only job you don’t need qualifications of some description for. A big mouth and and a big ego are the only requirements it seems.
@Chutes: Spot on!!!!!
@David Corrigan: Do it then. Wait. You have a job, kids, bills to pay etc. You don’t have time. You don’t like 24 hour 365 days per year jobs. You can’t handle the aggressive comments from people who think they are your superior but defer to prove it.
@Dan Dare: Ya wha?
If you think those lemons are working 24/7/365 then clearly you are not all there. I can handle myself if someone wants to show they are weak and resort to aggressive comments as you call them.
You want to have a go at it?
The inheritance tax threshold allowance
for children should be brought back to what it was before the so called Celtic tiger years as it is at the moment a child cannot inherit the family home because the house is worth thousands more than the tax threshold in most cases in Dublin. We need a new political party and out with FFG the Greens and sinn fein/ira.
@Rodney Byrne: 100%. And if you want to transfer the house into your kids names now, there is tax on that too. On the other side however- there was talk on news talk this morning that social houses are being turned down because they don have electric charging points for their cars. No joke. The forever house brigade riding high.
16 billion of a Surplus.. why shouldn’t the citizens of this country benefit after all we generated this huge surplus. But we probably end up a €5 better off. Do something positive with this cash. Nationalise the broadband or ESB. Start building houses or perhaps even a whole new national industry like wind turbines. Make Ireland the wind turbine capital of Europe. But no, nothing with a bit of vision just take your €5 and shut up.
@Lord Sea: wow. Last time I checked the esb was owned by the State.
@Lord Sea: Nationalise broadband? You have to be kidding. Do you seriously believe the government would be quicker to adopt new generations of broadband? If broadband was state owned we would still be on dial up.
That’s it boys, look after your big mates and to he’ll with decent, ordinary people
@Richard Starling: do you think that people who earn far more than 50 k per annum are not decent?
@Marty Rox: some of them obviously, excluding the clique in bed with the ministers
@Marty Rox: 550,000 people pay the top rate of tax. There are 1,700,000 who don’t even reach that threshold and are in far more urgent need of tax relief than those on the high rate.
Raising the tax 40% rate helps only the 550k, raising the 20% threshold helps everyone. But of course FG only want to help their well off buddies with the smokescreen of helping middle Ireland( the majority of which do not reach the 40% threshold, ironically)
Anything for those on 30 to 40k? The real squeezed middle. The renters, the workers
Tax breaks for the landlords and high earners
@Barry Donnelly: Yes. No tax.
talk is cheap … looking for votes i would persume….
@ian cryan: Both statements are true. The sun rises in the morning.
Talk of prudent rainy day approach on money in boom times is to make sure the chosen few favourites of the political establishment parties across the board are well funded but poverty and hardships for the rest
Return the units that were stolen during the bank bailout.. This is a no brainer, will not lead to inflation and is a once off payment and will help those who have private pensions in their retirement… Remember the private sector do not have public sector gold plated pensions
@a politicians promise is as good as a lie: They should start putting money back into the citizens pension pot. You know, the one that they cleaned out to cover the banks mistakes.
Top it up and save our elders working until they are 103.
They’re not quite prudent when it comes to awarding themselves raises or employing half a dozen advisers on exorbitant salaries or certain civil servants who stick their two fingers up at the rest of us. The rest of us continue to get screwed left, right and centre
Instead of rewarding the people who don’t work or choose not to work why does mcgrath insist that the real workers get nothing?.
Do we really have to put up with this Punch and Judy show for the next four months.
How about the media just ignore it.
@Pato: four months? The budget talk sstarted last month just before all the evictions from the lifting of the ban are gonna be anounced.
This is all PR and a poor attempt at a distraction.
Ah yeah dont worry about being kicked out or waiting on a trolley for days in a hospital, unable to get a GP appointment? electrical outages being predicted again, massice price gouging going on in basically every sector? Firebrigade currently striking,underfunded and under staffed Gards?
Nah sure this Government will ignore its OWN independant review of taxes and future takes so they can attempt to buy some votes by doing the opposite of the reviews advice.
Things going to get a whole lost worse when the new hate speech bill kicks in, you won’t be able to criticise the government. An election isn’t going to solve anything either as SF at best will be on a par with what’s there already. What’s the answer? I don’t know, all I know is that the window of opportunity to take back our country is almost closed sadly.
@Richard Carroll: so if SF are on par with rest, in your personal opinion, then what’s to loose giving them 123 votes. When they actually do change things up it’s win win.
@Robert Bruce Tracy: u ok hun?
Politics is about buying votes, which is essentially all you have to do to stay in office, bang up a few posters everywhere which most can’t afford to do and you’re laughing all the way to the big table. It’s bloody sickening ngl!!
@Robert Bruce Tracy: what are you on about lad
Let’s get real folks. 20% rate up to 40,000… increasing this to 50,000 would me that any 1,000 over 40,000 you are on now , you will pay €3.84 less tax per week. If your lucky to be on 50,000 or over now, you would pay €38.40 less tax.. You can bet your bottom dollar that if this introduced the Gov will get some of it back by increasing duties on some other products. It’s all smoke screens, give with 1 hand and take vavk with the other… just watch
I am quite surprised the Journal is not removing posts referring to people as invaders? It is very clear that some contributions on here are born out of xenophobia and bigotry. I would dare say racism at times too.
@Sun Rise: also there are invaders coming here
@Dan Dare . Everyone on 30 to 40k pays PAYE, prsi, USC in their income you twit.
Check your own p60
More pomp and spin from a sham government.To hell with the ordinary people who are struggling
Build some infrastructure, improve hospital waiting times, invest in schools. Tax cuts are worthless if we don’t have the essentials that are needed for a functional society.
Dear Prudence
Are you coming out to play ?
Boom boom………..
Basda bish………………
You don’t have to be an id10t to comment in the journal.
@Dan Dare: No but it helps!
@Robert Bruce Tracy: sad…
@Robert Bruce Tracy: Lad, didn’t anyone warn you about smoking that stuff ? Too late now, but a clear warning to others. Say No to drugs.
have your say