The budget package is “comprehensive” and “sustainable” and will help the country get through the unprecedented energy crisis, the Taoiseach has said.
The budget will be officially outlined in the Dáil chamber at 1pm on Tuesday.
In what could be one of Ireland’s most significant budgets in years, the pressure is on the coalition government to get the balance right as bills for energy, fuel, groceries and housing soar.
A tax credit for renters and double welfare payments are among the measures expected in Budget 2023.
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Later this afternoon, Ministers @Paschald and @mmcgrathtd will unveil a Cost of Living Budget for individuals, families and businesses.
Find out what the Government has prioritised here👇 @IRLDeptFinance @IRLDeptPER pic.twitter.com/NDiRbf5CXIAdvertisement— MerrionStreet.ie (@merrionstreet) September 27, 2022
A new support scheme for employers who are facing rising energy costs will also be part of the package.
Taoiseach Micheál Martin said the budget will aim to deal with the cost-of-living crisis.
“We will do it in a way that is sustainable, not just this year but throughout 2023,” Mr Martin said before the final pre-budget Cabinet meeting.
“It will mean investment in public services, it will mean significant reduction in costs for people, childcare education, health and also then allocating funding to people through taxation reductions, social welfare payments and energy credits.
“It’s a comprehensive package, but what we do have a significant eye on, 2023, and we have to be sustainable from a public finances perspective.
“In other words, have to make sure that not only do we get people through this winter in the teeth of this unprecedented crisis, but also make sure we have the reserves to get through the entirety of 2023 as well.”
Mr Martin said that while Government is focusing on its budget, it is conscious of the economic turmoil in the UK following the tax-cutting mini-budget announced last week.
“Europe and the UK are key partners, not just in the context of general economics but in the terms of the energy crisis as well,” Mr Martin added.
“We will watch and monitor what is happening in the UK.
“But our main focus is on the Irish situation and how the crisis is impacting on people and households, on workers and in businesses and we want to protect jobs and that will be a significant part of the budget.”
In @FineGael, we understand that the cost of living is rising. It's making it more expensive to do the weekly shop, to fill your car, or to pay your utility bills.
So #Budget2023 is a Cost of Living Budget designed to help you and your family. pic.twitter.com/Kdyx0K4bqs— Leo Varadkar (@LeoVaradkar) September 27, 2022
The Government had indicated during the summer that the Budget would be worth €6.7 billion, but on Sunday it published a white paper that indicated it had a surplus of €4.4 billion, mostly due to the overperformance of corporate tax.
Among the one-off measures to be announced are energy credits worth €600 in total, with one payment to be paid before Christmas to help with spiralling bills.
Tánaiste Leo Varadkar said the budget package is designed to put money back in people’s pockets.
The Fine Gael leader said there will be permanent changes to help businesses with rising energy bills.
“There will be reductions in the cost of childcare, putting a child through education and college and other things as well,” Mr Varadkar said on Tuesday.
“It will hopefully restore confidence in the economy. It is a very large package in contrast to what you are seeing across the water and in other countries.
“This is being financed because we have a strong economy as our businesses are doing very well, because so many people are employed, it’s not being funded through borrowing.
“We will be able to put aside some money in reserve that if we do need to intervene again in the new year we will do so, as no-one can predict how long this energy crisis or inflation crisis will go on for.”
Today is Budget day!
Ministers @SimonHarrisTD and @HMcEntee will be providing updates throughout the day.#Budget2023 pic.twitter.com/ikbo9SUMNp— Fine Gael (@FineGael) September 27, 2022
Carers and people with disabilities are due to get one-off payments of €500, while renters are reportedly in line for a €500 tax credit.
A double payment of social welfare and child benefit is expected, as is a reported €12 increase in the core social welfare payments – the latter of which has already been called “a serious disappointment” by stakeholder groups.
The Government has pledged to help people with high childcare costs as a core part of Budget 2023, and is to announce that fees will decrease by 25 per cent next year, with Children’s Minister Roderic O’Gorman to push for a further 25 per cent reduction in 2024.
The forthcoming budget is also to reduce third-level fees, with the student contribution charge reported to drop by €1,000 for all students.
A widening of the highest tax band is expected so that the top rate of 40 per cent, which currently applies to those earning over €36,800, will kick in at a higher wage.
The fuel allowance, currently €33 a week, is expected to be expanded to include a larger cohort than the current 370,000 eligible.
Minister for Finance Paschal Donohoe said the budget will include a new support scheme for employers.
“The overall scale of our core spending will be broadly in line with the parameters of summer economic statement,” he added.
“Michael McGrath (Minister for Public Expenditure and Reform) has worked intensively with all government ministers to put together day-to-day spending plans that are in line with what we have already announced.
“We are going to be announcing a scale of one-off measures, it’s going to be significant.
“A key driver of this will be bringing forward a new support scheme for employers who are facing challenges regarding the rising cost of energy.
“That will be a significant intervention in our economy. We have to protect jobs and we have to put in place measures that will stop a surge in pricing turning into a threat to jobs.”
Higher Education Minister Simon Harris said it is a “really important day”.
“This budget is all about the cost of living,” he said.
“It’s all about trying to make sure families can get through the winter, and it’s about making sure work pays.
“All ministers have been working across departments to make sure any and all measures that can be considered to help people can be put in place.”
The Fine Gael minister also said that he is “very confident that we have used an awful lot of levers at our disposal to try and help students, parents and families of workers”.
“My message to students to parents, to families in general, is that help is on it way,” he added.
