The next budget will see €6.4 billion in additional spending and tax cuts, the Government has revealed.
The Summer Economic Statement was published on Tuesday afternoon showing the Government will spend an extra €5.2 billion, with €1.1 billion allocated for tax cuts.
Of that, €3.2 billion is already allocated, meaning there will be a €2 billion pot for new spending measures.
That means an overall increase in core expenditure of 6.1 per cent, in breach of the Government's spending rules which had limited expenditure hikes to 5 per cent.
The statement sets the overall parameters for the spending and taxations measures that will be included in the autumn budget.
An Exchequer surplus of €0.3 billion was recorded at end-June 2023.
AdvertisementThis compares with a surplus of €4.2 billion in the same period last year.
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— Department of Finance (@IRLDeptFinance) July 4, 2023
The Department of Finance has also revealed the overall tax take was up almost 11 per cent through the first six months of the year at nearly €41 billion.
That includes a 20 per cent increase in corporation tax take.
'Delicate balance'
Earlier on Tuesday, Minister for Finance Michael McGrath said the economic statement strikes a “delicate balance” of providing enough support for society while not adding to inflationary pressures.
Arriving at Government Buildings ahead of presenting the plans to Cabinet colleagues, Mr McGrath confirmed his intention to use some of the billions of euros of corporation tax revenue from multinationals to reduce the national debt and for longer term investment and savings initiatives.
“In framing the Summer Economic Statement, we have had to strike a delicate balance between ensuring that we provide enough support for our society, for our economy, while at the same time not adding to inflationary pressures and recognising that it is an economy that is now pretty much at full employment, there are capacity constraints,” he said.
“And so striking that right balance has been a challenge, but I’m confident that we have now arrived at an appropriate budgetary package for Ireland, which ensures that essentially windfall revenues that we are currently collecting can be protected.
“And in the coming weeks I will bring a further memo to Government seeking agreement on the overall architecture of setting up a long-term savings fund, a public investment fund, and also making provision to ensure our national debt becomes more sustainable.
“So we sought to strike that right balance today between increases in core investment in terms of day-to-day core expenditure, while also providing for some additional capital investment from windfall receipts.”
Mr McGrath said no decisions had been taken on potential further temporary supports that could be included in the autumn budget for people struggling amid the cost-of-living crisis.
“Inflation is still high, it is thankfully falling, but that is primarily because of base effects rather than actual reductions in price levels,” he said.
Ministers @mmcgrathtd and @Paschald publish Summer Economic Statement 2023. #SES #Budget2024
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— Department of Finance (@IRLDeptFinance) July 4, 2023
“So we’re not making decisions in the Summer Economic Statement about potential temporary or one-off items.
“The budget is still three months away and those decisions will be made closer to the time once we take account of the economic circumstances, the inflationary situation, at that point in time.
“What the Summer Economic Statement sets out essentially is what the budget package will be for 2024, the core budget package in terms of recurring expenditure items and indeed the taxation package as well.
“And there’ll be a whole series of detailed negotiations then that will result in a lot of individual decisions then to decide what makes up the budget package but this does set the parameters of the budget, and it does provide the guardrails and really does impose a certain level of discipline that the budget will now come within the scope of what hopefully will be agreed today in terms of the Summer Economic Statement.” – Additional reporting: PA
