High stakes Budget to tackle inflation being finalised
Budget discussions continued into the early hours of this morning as the coalition leaders and the Ministers for Finance and Public Expenditure met to finalise measures ahead of tomorrow’s announcement.
The party leaders and Ministers for Finance and Public Expenditure, Paschal Donohoe and Michael McGrath, will meet again this morning.
This year’s Budget is set to contain a separate cost of living package of once-off supports which will be paid before the end of 2022.
It is a high stakes Budget to tackle a level of inflation not seen for decades.
The Government is expected to sign off on a large increase to the point at which the top rate of tax is paid, raising the band to around €40,000.
Double welfare payments soon after the Budget are also anticipated. However, discussions have continued on rate increases for social welfare payments next year.
The size of the childcare package and a tax credit for renters are still also being hammered out, while the shape of a broad package of supports for SMEs is also at issue.
Parents of primary school children can avail of free school books from next September after the Minister for Education Minister Norma Foley secured funding of €47 million in the Budget.
The pupil teacher ratio in primary schools will also drop to 23:1 in 2023.
Households will get energy credits worth €600, spread out over two or three bills. The Opposition has criticised the plan – insisting that capping bills is a better approach.
Economic and social analyst with Social Justice Ireland Colette Bennett said that while one-off measures in the Budget would be “welcome”, without an increase in social welfare payments, an income deficit will remain.
Speaking on RTÉ’s Morning Ireland, Ms Bennett said that everyone is experiencing the knock-on effects of inflation, but those in the bottom 10% – 20% income bracket are “the hardest hit”.
“What €208 was buying them last year is now roughly worth about €188, so they’ve lost €20 in their welfare,” she said.
Ms Bennett added that back in 2007 the Government had introduced a benchmark for social welfare payments and at the time it was benchmarked against average earnings.
“What we are looking for is for that benchmark to be reinstated.”
She said that at today’s rate that would cost €34 extra per week.
Social Justice Ireland has not pushed for a €34 increase, but it is seeking an extra €20, which it said would cancel out the impact of inflation.