Tax cuts and child-related support will be among the key measures unveiled in Budget 2025 amid the threat of a winter general election.
The Fine Gael, Fianna Fáil and Green Party Government is to unveil €8.3 billion worth of measures in the last of the Coalition’s five financial packages.
Budget 2025, to be officially unveiled on Tuesday, is expected to include changes to income tax thresholds, a cut to the Universal Social Charge (USC), and an increase to the €750 renters tax credit.
The Government will also announce a cost-of-living package including punter-friendly energy credits and two double child benefit payments.
A “baby boost” payment of €420 – suggested by Green Party leader and Children’s Minister Roderic O’Gorman to help parents with the costs of a newborn baby – has also been approved, along with a €15 increase in maternity and paternity benefit.
A disagreement on the scale of welfare payment increases surfaced in the media over the weekend, where it was reported Fine Gael was seeking a €15 increase to pensions alongside a lower hike for the jobseekers’ allowance.
Taoiseach and Fine Gael leader Simon Harris had said publicly that it did not make sense to spend significantly more on jobseekers’ allowance at a time when the economy is at near full employment.
Tánaiste and Fianna Fáil leader Micheál Martin dismissed the row as mischievous spin; he said that a €12 hike for all welfare payments had been “stitched in” for months and that differentiating welfare payments was not raised during budget talks.
Among the other notable measures included in the budget are free hormone replacement therapy from January, which could save women between €360 and €840 a year, and funding for 400 new staff and digital investment at the International Protection Office.
The Government is also expected to outline how €14.1 billion in Apple tax revenues should be spent, which Ireland received after losing a long-running state aid case against the European Commission in September.
Some €8 billion of the Apple tax revenue is expected to be received this year, contributing to Ireland’s total surplus of €25 billion in 2024, fuelled by multinationals’ corporation taxes.
The Government has stressed that the Apple tax windfall and other surpluses will not affect the amount spent in Budget 2025.
The fiscal watchdog has urged politicians not to repeat past mistakes, arguing that before the recession the State’s booming economy was exposed as vulnerable by overly relying on one sector.
But rumours of an election before Christmas, fuelled by flattering poll numbers for Fine Gael since Mr Harris took over as leader in April – who has the ultimate call on when to go to the polls, have raised accusations of a “giveaway” budget.
A general election must be held by March 22nd at the latest and although many senior Government ministers insist the Coalition will go “full term”, there has been little clarity on what that means.
Speaking in an Instagram post filmed at 10.23pm on Monday, Mr Harris said the budget aimed to help people with the cost of living – referencing supports for energy, fuel, education and child costs.
He said there would also be an infrastructure package focusing on housing, water and electricity, likely funded by Apple tax funds.
The budget is to be announced by Minister for Finance Jack Chambers, followed by Minister for Public Expenditure Paschal Donohoe, in the Dáil chamber from 1pm on Tuesday.
