‘A budget for its time’

A budget that “will make a difference” was announced by the Government on Tuesday as the nation continues to adjust to the cost of living crisis.

Addressing the Dáil at 1pm on Tuesday afternoon, Minister for Finance Pascal Donohue delivered a speech on what he described as a “cost-of-living budget” focused on helping individuals, families and businesses deal with rising prices.

The minister said: “As we have seen all too clearly over the past few years with Brexit, with Covid and now with the war in Ukraine, unforeseen risks and challenges are becoming more frequent in their occurrence and more severe in their impact.

“As one of the most open economies in the world, we benefit when things are going well internationally but, when they reverse, we are also one of the most exposed. As such, it is imperative that we are prepared for these shocks.”

Speaking after Minister Donohue was Minister for Public Expenditure and Reform, and TD for Cork South-Central, Michael McGrath, who said the budget will not meet every need but guards against current and future risks.

“We should not forget that the scale of response we are bringing forward today is possible only because of the strong and swift rebound in the economy and our public finances. We should never put at risk or take for granted the pro-enterprise policies that underpin our economic success as a country,” said Minister McGrath.

Here are some of the key announcements from Budget 2023.

Social welfare

• Weekly social welfare rates will be increased by €12 for working age recipients. • There will also be a €12 increase in weekly payments for pensioners. • The Working Family Payment threshold will increase by €40. • There will be an increase in eligibility for Fuel Allowance. • There will be a €500 lump sum for families availing of the Working Family Payment, a €500 lump sum for carers, a €500 lump sum for people in receipt of disability payments, and a €20 increase in the domiciliary care allowance for sick children.

Health

• All inpatient hospital charges will be abolished. • GP visit cards will be provided to those on or below the median income. This will provide visit cards to 340,000 additional people. • Free contraception will be available for all women aged between 16 and 30.

Childcare and education

• There will be a free school book scheme for primary school pupils from autumn 2023. • Over 660 additional mainstream teachers, over 1,190 SNAs and 680 special education teachers will be provided. • Third level students will see a reduction of €1,000 in their college fees for the coming year. • The National Childcare Scheme hourly subsidy is to increase from 50c to €1.40.

Housing

• Funding will be made available to support 8,800 new HAP tenancies and 800 RAS tenancies. • 9,100 new-build social homes, 5,500 new affordable homes for sale and rent and 6,500 new social homes will be supported. • Funding will be provided to deliver 37,000 home energy upgrades.

Business supports

• The introduction of a Temporary Business Energy Support Scheme (TBES) that will cover 40% of an organisation's energy bill increases subject to a monthly cap of €10,000. • Non-cash benefits or rewards to workers will be doubled to €1,000 and can be used in the current tax year.

Reaction

Statements have flooded in since Budget 2023 was announced on Tuesday from groups and organisations around the country.

Here on Leeside, Cork Chamber CEO Conor Healy welcomed the scale of Budget 2023 to tackle the challenges of the energy and inflation crisis but said it is not clear whether the €1.2 billion package will be enough to support businesses through the winter.

“The level of investment in supports for businesses facing rocketing energy prices is welcome and badly needed but it is not clear whether the Government’s TBES Scheme covering 40% of the increase in energy bills will be enough going into this winter. The €1.2 billion package is very positive but Government should be open to revisiting the measures as the situation evolves over the coming months.”

Also issuing a guarded welcome to the new budget was the Irish Hotels Federation which also welcomed the temporary energy supports but called on the Government to reconsider its decision to re-introduce a 13.5% VAT rate in March.

Denyse Campbell, President of the Irish Hotels Federation, said that while elements of the budget will help hoteliers, the sector feels that the Government have missed an opportunity to continue support for employment recovery and growth in tourism.

Meanwhile, Members of the Irish National Teachers’ Organisation (INTO) welcomed measures to tackle immediate challenges but said we must not lose sight of important issues such as class overcrowding and under-resourced mental health supports for students.

Reacting to the class size provision in Budget 2023, INTO General Secretary John Boyle said: “Over the last 3 years we have mounted a grassroots campaign to tackle Ireland’s supersized class sizes. Today, we move yet another significant step closer to our goal.”

Sinn Féin spokesperson on Education and Cork TD Donnchadh Ó Laoghaire added: “The Government has finally listened to Sinn Féin’s calls for free school books, however I cannot understand why this does not include secondary schools, given their books are more expensive.

"With regards to the pupil teacher ratio, we still have some of the biggest classrooms in Europe with children going to primary school classes of 34, 35 and 36 children.”

A number of charities have also voiced their thoughts on Budget 2023, with older person charity ALONE stating that the budget will not support older people into 2023.

ALONE CEO Seán Moynihan said: “A €12 increase in the pension is simply not enough to keep up with the increased costs caused. While one-off supports are welcome, they do not make up the difference in what was needed in core welfare increases.”

Similarly, homeless charity Depaul welcomed the new measures but said a lot more needs to be done.

Chief Executive, David Carroll said: “We welcome the €215 million announced for the provision of homeless services but it must be reviewed in 6 months to assess whether more is needed to respond to what we expect could be a worsening crisis.”