Tax cuts and child-related supports will be among the key measures unveiled in Budget 2025 amid the prospect of a winter general election in Ireland.
The Fine Gael, Fianna Fail and the Green Party government is to unveil 8.3 billion euro worth of measures in the last of the coalition’s five financial packages.
Budget 2025, to be officially unveiled on Tuesday, is expected to include changes to income tax thresholds, a cut to the Universal Social Charge (USC), and an increase to the 750 euro renters tax credit.
The government will also announce a cost-of-living package including punter-friendly energy credits and two double child benefit payments.
A “baby boost” payment of 420 euro – suggested by Green Party leader and Children’s Minister Roderic O’Gorman to help parents with the costs of a newborn baby – has also been approved, along with a 15 euro increase in maternity and paternity benefit.
A disagreement on the scale of welfare payment increases surfaced in the media over the weekend, where it was reported Fine Gael was seeking a 15-euro increase to pensions alongside a lower hike for the jobseekers’ allowance.
Irish premier and Fine Gael leader Simon Harris had said publicly that it did not make sense to spend significantly more on jobseekers’ allowance at a time when the economy is at near full employment.
Deputy premier and Fianna Fail leader Micheal Martin dismissed the row as mischievous spin; he said that a 12-euro hike for all welfare payments had been “stitched in” for months and that differentiating welfare payments was not raised during budget talks.
The government is also expected to outline how 14.1 billion euro in Apple tax revenues should be spent, which Ireland received after losing a long-running state aid case against the European Commission in September.
Eight billion of the Apple tax revenue is expected to be received this year, contributing to Ireland’s total surplus of 25 billion euro in 2024, fuelled by multinationals’ corporation taxes.
The government has stressed that the Apple tax windfall and other surpluses will not affect the amount spent in Budget 2025.
The country’s fiscal watchdog has urged politicians not to repeat past mistakes, arguing that before the recession Ireland’s booming economy was exposed as vulnerable by overly relying on one sector.
But rumours of an election before Christmas, fuelled by flattering poll numbers for Fine Gael since Mr Harris took over as leader in April – who has the ultimate call on when to go to the polls, have raised accusations of a “giveaway” budget.
A general election must be held by March 22 at the latest and although many senior government ministers insist the coalition will go “full term”, there has been little clarity on what that means.
Speaking in an Instagram post filmed at 10.23pm on Monday, Mr Harris said that the budget aimed to help people with the cost of living – referencing supports for energy, fuel, education and child costs.
He said there would also be an infrastructure package focusing on housing, water and electricity, likely funded by Apple tax funds.
The budget is to be announced by Finance Minister Jack Chambers, followed by Public Expenditure Minister Paschal Donohoe, in the Dail parliament chamber from 1pm on Tuesday.
