Budget 2025: What to expect

With Budget 2025 being announced shortly on Tuesday, October 1st, here is a rundown of all that is expected to be included, and what has already been confirmed by the Government.

Cost-of-living

Last week, The Irish Times reported that a cost-of-living package worth about €1.5 billion is under consideration as part of Budget 2025 negotiations, as bilateral meetings between Ministers continue ahead of budget day.

It said that two Government sources said the standalone cost-of-living package would be less than last year’s €2.3 billion, with suggestions that it would land somewhere in the region of €1.5 billion.

This would allow another mix of lump-sum payments to welfare recipients and the further rollout of new energy credits. The final figure for the cost-of-living package would be agreed this week, a third source said.

While householders can expect another round of energy credits, they will be worth less than the three payments of €150 rolled out in last year’s budget.

Although help with the cost-of-living was shown to be a top priority for voters in advance of the budget, a prominent economic think tank has said there is no valid reason for the Government to include cost-of-living supports in the upcoming budget.

According to an Irish Times/Ipsos B&A opinion poll, half of respondents said they wanted the Government to prioritize "immediate help with the cost-of-living" when it delivers its final budget on October 1st.

However, representatives of the Nevin Economic Research Institute (NERI) have said that cost-of-living supports are no longer appropriate given that prices in Ireland are not likely to decline.

The Government has already flagged that the next budget, this coalition’s last, will include a €1,000 boost to workers via a combination of tax changes and a fresh cost-of-living package.

Tax reduction

The Irish Examiner has reported that Budget 2025 will contain a "significant" income tax and USC reduction package, confirmed by the Taoiseach.

The measures will be part of a €1.4 billion tax package, Harris said.

The Taoiseach said no person earning the average wage should pay the higher rate of income tax.

Jack Chambers said that reductions to the USC would be “central” to the income tax package part of Budget 2025.

Taoiseach Simon Harris has said that “exciting” things can be done to tackle child poverty in Budget 2025, but ruled out a two-tier child benefit.

The Fine Gael leader said he had met with officials from the child poverty unit to discuss measures to help children in need.

An ESRI report found that the number of children deprived of basic essentials such as clothes had risen to 230,000 children in 2023, an increase of 30,000 children compared to 2022.

Speaking at the Ploughing Championships in Co Laois last week, Harris said: “I’m not happy with child poverty rates in this country. Yes, I can point to statistics to show progress. I have no intention of doing that.

“There’s too many children that are hungry in Ireland, there’s too many children who get a hot school meal during the school term, but don’t get fed during the summer. There’s what we call ‘holiday hunger’.”

He said that there needs to be targeted measures in the budget to tackle child poverty, but added that there will be “space” for universal measures.

The Budget is set to contain €1.2 billion worth of investment in childcare, the Green Party leader has said.

Roderic O’Gorman said he had “done most of the heavy lifting” in increasing investment for early years childcare and education, saying it will have doubled over his time as Minister for Children.

O’Gorman was speaking to reporters at the Green think-in in Dublin, where he said a key part of the party’s manifesto for the general election will be measures on reducing childcare costs.

He also outlined a vision for the future, adding that the State needs to “step in” and provide childcare directly through a public model.

Health

The Minister for Health is seeking to expand free contraception to 16-year-old girls as part of Budget 2025.

However, Stephen Donnelly said healthcare providers had raised “legitimate concerns” during ongoing discussions about expanding the scheme.

Donnelly said there had already been high take-up of the free contraception scheme for those aged 17-25 but that extending the scheme to 16-year-olds is “more complex”.

He added: “There are some very legitimate concerns that have been raised with me. Some around legal complexities, some around the age of consent being 17, and there are medical ethics and various principles that are used.”

Donnelly said that standards of medical ethics consider a person to be an adult at age 16, meaning they can consult a doctor without a parent or guardian present.

He added: “I have a pretty simple view on this which is that a young woman at 16 years of age can walk into her GP today and say she’s pregnant and she wants to avail of termination of pregnancy services and they will be provided to her, quite rightly.

“I feel that if we are offering those services to a young woman who is 16 she should also be able to go into her GP and say ‘I’d like to be able to avail of free contraception’.

“It is no more complex than that.”

Apple tax funds

The ruling ordering Ireland to collect €13 billion in back taxes from Apple will not impact on the upcoming budget, Minister for Finance Jack Chambers and Public Expenditure Minister Paschal Donohoe have said.

Chambers said it would take months, not weeks, to draw down the funds from the escrow account as it analyses a ruling from the European Court of Justice and considers “adjustments” from other countries.

Coverage from the Irish Examiner cited the Taoiseach rejecting Sinn Féin's suggestion that €1 billion of the Apple tax funds be spent on disadvantaged communities.

At the National Ploughing Championships, Harris said he believes it should be spent on housing, water, and infrastructure but emphasised the funds can “only be spent once”.