Minister for Enterprise, Trade and Employment Simon Coveney has cautioned that people cannot take for granted that every year there will be a surplus when it comes to the Budget.
Speaking on Newstalk Breakfast, Mr Coveney said Ireland was different from most countries in the world who were not operating with budget surpluses. “We have a strong economy, we have full employment and have actually had more than full employment and the country's finances have been managed relatively well.”
Mr Coveney added that speaking from personal experience, the Government “knows all about what happens when the wrong decisions are made in terms of how you manage a country's finances.
“I remember when I became a minister, 12 or 13 years ago, when we had to cut massively right across every government department where the pay across the public sector got cut by 15 percent when we were virtually spending nothing in terms of capital infrastructure investment.
“This is a Government that understands that only too well, and that's why Michael McGrath yesterday, supported by Government, put over €6 billion into funds for the future to make sure that doesn't happen again.
“As a Government, we have to respond to the needs of families and households and businesses in the present day, as well as planning for the future. And this government just this budget, in my view, does both. So, you know, we are making a significant amount of once off payments to respond to the cost of living.
"But I think every household in the country is feeling at the moment in terms of the cost of energy, in terms of the cost of groceries, and a lot of lots of households and families are under financial pressure. We need to respond to that.”
Mr Coveney said that a breakdown of the budget indicated that the measures introduced in Budget 2024 would most benefit those who were on the lowest incomes.
“But we also recognise that middle income earners in Ireland are also under some pressure. And so some of the payments that we want to get out are universal to every household in the country, recognising that everybody is coping with the cost of living. They all have different financial circumstances and so on.
“Most measures are targeted towards people who are on the lowest incomes, and that's the way it should be. But some measures, particularly the ones that we want to get to quickly and without an application process or application criteria are universal.
“One of those, of course, is the energy credits. I think if you asked households across the country whether last year's decision by the Government to give them almost €800 in energy credits helped them through the winter debit, they’ll give you a very positive answer on that. And we're repeating that because we can afford to do it.”
With regard to his own portfolio, Mr Coveney, said there was a need to constantly look at trying to simplify how the Government supported businesses “so that we don't have complex application processes and complex tax code systems to navigate.
“That's why, for example, you know, we announced yesterday a €250 million fund. That's a quarter of billion euro fund, as a once off measure for grants to small and medium sized businesses to help them deal with the increased cost of doing business.
“Yesterday we also announced a significant increase in the minimum wage, which is the right thing to do, by the way, and will be working for people on the lowest incomes over two grand a year for them in terms of their incomes, which is very welcome. But of course, employers have to pay for that.
"And so that's why we are going to give direct grant aid in the first quarter of next year to 130,000 businesses, the small and medium sized businesses across the country without any application process at all. We're using the rate base to be able to target businesses that have paid their rates this year who need a cash injection next year to help them with the increased costs of doing business.
“That's the kind of simplified scheme that I think we should be doing more of, and that's why we're doing it. On the tax side a very innovative new measure introduced by Mike McGrath yesterday was a new support for what's called angel investors.
"So in other words, wealthy people who want to put money into Irish businesses, startups, growing businesses, they want to help to fund them and the impact on the success of those businesses. We're going to make it tax efficient for them to do that now, which I think is very straightforward."
