Taoiseach promises cost-of-living Budget as Michael McGrath dampens expectations
Finance Minister Michael McGrath stated that the focus of Budget 2025 should be on “permanent changes” rather than a “large series of one-off measures”.
Taoiseach Simon Harris has stated that "cost of living must once again be a focus for Budget 2025".
However, these expectations were quickly quelled by Finance Minister Michael McGrath who stated that the focus should be on "permanent changes" rather than a "large series of one-off measures".
The comments were made at the National Economic Dialogue at Dublin Castle. This is the starting point of the budgetary process each year. It brings politicians and interest groups together to discuss the Budget.
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The Summer Economic Statement will be published following "four to six weeks" of "extensive engagement with the party leaders". This outlines how much money will be spent as part of the Budget.
Despite speculation at the weekend that there may be an early Budget to allow for an early election, Minister McGrath stated that Budget 2025 will take place at the normal time, which is in the first two weeks of October.
In his opening remarks, Mr Harris said that "cost-of-living increases have left them feeling their personal finances are insecure and might not withstand any further shocks".
"Therefore I believe the cost of living must once again be a focus for Budget 2025, building on the cost-of-living measures in the previous two years," the Taoiseach said.
"Therefore I believe the cost of living must once again be a focus for Budget 2025, building on the cost-of-living measures in the previous two years.
"In the coming Budget, we must ensure we provide the extra funding required to keep pace with the expanding population and a cost-of-living and welfare package that protects the most vulnerable.
"Income tax bands and credits must again be properly indexed so that people do not drift into the higher rate band of income tax."
Minister McGrath said that "of course, there will be measures in the Budget to support households with the cost of living" but stated that we "are in a different place when it comes to inflation" and "the emphasis should be on further measures and permanent changes to our expenditure and taxation framework rather than a large series of one-off measures."
He told the Irish Mirror, however, that the looming general election will not have any influence on him or Public Expenditure Minister Paschal Donohoe when it comes to making decisions.
He said: "Overall, the economy is in good health. If you look back to where we were at this point last year, when we stood here, inflation was much higher. There was a lot of uncertainty as to whether or not it was going to be possible to get inflation down without doing considerable damage to the economy and to the labour markets.
"Thankfully, by working together, by careful management, we have avoided that.
"We are likely to be at a turning point in the interest rate cycle. We expect further energy price reductions to be passed through the wholesale level to the retail level."
Mr Harris also said during his speech that spending extra money on services does not necessarily lead to better outcomes.
"If it was just about writing another cheque, many of the challenges society faces would no longer exist," he continued.
"So often, our political discourse defending itself descends into some sort of transactional bidding war. ‘Who is going to give another fiver here or another fiver there’."
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