WHILE it was a giveaway budget, Paschal Donohoe did take a measured approach and kept an eye on the future, according to Tommy Corbett of Ennis company Carey Corbett Financial Solutions.
“In the main it was a very targeted approach. They wanted to look after those on social welfare and the lower paid, but also targeted towards the squeezed middle, and those with children in university,” he said.
Regarding those on social welfare, he said, “There’s a €12 increase in the rate of social welfare and the pension. There’s also an increase in the fuel allowance of €400 as far as I know, and they’ve also widened the net for those applying for the fuel allowance. There’s something like 80,000 more people will be able to apply for fuel allowance.”
And what measures will benefit the so-called squeezed middle?
“The increase in the tax band from when you go from paying 20% to 40%, that went up by €3,200. If you’re on over €40,000, that’s worth about €831 a year to you. Also there’s the reduction in
student fees of €1,000 and a reduction in childcare costs of 25%. Then there are three payments of €200 to every household towards their electricity bills.”
He feels that Minister Donohoe did what he could to help people deal with the highest level of inflation in decades.
“It’s a massive giveaway budget of €11 billion. Some of those are once-off measures and some of them are measures that will keep going into the future, like the social welfare, the tax credits and tax bands.
“I don’t think he could have done much more, although you’ll have people jumping up and down saying he could have done more here and done more there.”
Mr Corbett said that there was relatively little done to help with the housing situation.
“If I’d one criticism, he probably could have done more on the housing front in relation to derelict property tax and maybe done a little bit more on the vacant homes tax.
“That’s self assessment and it’s hard to know how many people are going to put their hands up and say they have a second property or a vacant house, and pay that extra tax. He may have been able to do a little bit more there, he might do so in the future.”
As it stands now, the public finances are in good shape.
“We have a surplus of around €6 billion this year and it’s predicted we’ll have a surplus of around €4 billion next year. If you look at the overall world economy, we’re in a really strong
position.
“The one caveat is that something like 25% of all tax revenues are being paid by around ten multinationals. That’s a very narrow tax base, if we’re looking at 25% of all the tax we collect being paid by ten massive companies.
“If one of those companies were to leave it would paint a completely different picture. Even if those companies don’t make as much money in the future as they are currently, we’d have a very different picture.
“But he has addressed that somewhat, in that he has put €2 billion away into a national reserve fund for future use. So I think he understands that, but it is a worry.”
While the Irish economy is still quite strong, the outlook is quite uncertain.
“As a small open economy, our economy is predicated on what the global economy does. As the global economy slows down or parts of it, whether in the United States or Europe, maybe go into recession over the next six to 12 months that will have a knock-on effect on ourselves because we are an open economy.
“But, without crystal ball gazing, headline inflation this year is running around 8%, it’s predicted to run at around 7.5% next year, and I do think Minister Donohoe has taken those factors into account.
“He hasn’t spent everything that was available to him this year, he’s been lucky in that he doesn’t have to borrow, that there’s a surplus. Without looking too far ahead, we’re facing uncertain times for the next 12 months.”
Owen Ryan has been a journalist with the Clare Champion since 2007, having previously worked with a number of other publications in Limerick, Cork and Galway. His first book will be published in December 2024.