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Cost-of-living measures ‘must be a focus’ of Budget 2025 – Harris

By May 28, 2024No Comments

Cost-of-living measures “must once again be a focus” for Budget 2025, Taoiseach Simon Harris has said.

Mr Harris made the comments during an address at the National Economic Dialogue in Dublin Castle this morning.

He said that while there is a record number of people at work at just over 2.7 million, inflation is moderating and wages should grow again this year.

He said the Government knows that “a strong economy has to translate into tangible benefits for our people.”

“Right now, I know people are still hurting,” he said.

“Cost of living increases have left them feeling their personal finances are insecure and might not withstand any further shocks. We need to give them a sense of security that the Government get this.”

To address the challenges, the Taoiseach said he believes that “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,” he added.

Mr Harris also said income tax bands and credits “must again be properly indexed so that people do not drift into the higher rate band of income tax.”

In his address, the Taoiseach also told the delegates that the Irish economy and the public finances are in “good health”.

The annual conference brings various stakeholders together for public consultation and discussion on the upcoming Budget.

It is hosted jointly by the Department of Finance and the Department of Public Expenditure, NDP Delivery and Reform.

It is not intended to produce specific budget proposals or recommendations, but it is designed to assist participants in preparing their own pre-budget submissions.

The theme of this year’s Economic Dialogue is the challenges and opportunities for Ireland in a more shock-prone world.

Minister for Finance Michael McGrath has insisted the general election “won’t have an influence” on Budget 2025.

Also speaking at the National Economic Dialogue, Minister McGrath said the Government has already committed to there being a social welfare package and he said there will be further measures when it comes to income tax.

However, he said the country is “in a different position when it comes to inflation”.

As a result, Mr McGrath said he believes “overall the emphasis should be on permanent measures and permanent changes to our expenditure and taxation framework, rather than a large series of one off measures.”

“But that’s not to say that we’ve made any specific decisions about individual measures or specific cost living supports,” he added.

The minister said there will be significant support for households and for businesses in the budget.

However, he said that in an environment where “inflation is much, much lower and is continuing to fall, the emphasis should be on permanent supports rather than emergency or exception supports”.

Asked when the Budget will be unveiled this year, Mr McGrath said it will be on the second Tuesday in October.

“In the coming weeks we’ll bring a memorandum to Government to confirm the date of the Budget but there are no plans to change the Budget date from the normal period of early to mid-October.”

‘Expansionary budget’

A Professor of Economics at University of Limerick said the ground is being laid for an “expansionary budget”, adding that while inflation is falling the cost of items has increased.

Professor Stephen Kinsella said cost-of-living measures might include something to help renters.

Speaking on RTÉ’s News at One, he said: “We know that rent is a huge proportion of most renters’ incomes.”

He said energy help, particularly for those on lower incomes, might be expected.

“Help towards transport, so particularly public transport measures. They have been very popular. They are highly targeted. They increase demand for public transport, and they have generally been shown to be good value for money.”

In terms of fuel subsidies, Prof Kinsella said it makes something that produces an enormous amount of greenhouse gases cheaper to produce.

“So, there is that balance. All budgets are balancing acts in that respect.”

Government may take action if price of fuel rises above €2 – Donohoe

Minister for Public Expenditure and Reform Paschal Donohoe has said the Government would “consider” measures in Budget 2025 if the price of fuel was to rise above €2 again.

“If we were to see a return of prices for diesel and petrol that were to go so high again, we would consider that,” Mr Donohoe said.

“It is very possible that when we get into the second half of the year all forms of inflation, including petrol and diesel, will be in a far better place than they were this time a year ago.”

Speaking on RTÉ’s Drivetime, Mr Donohoe said no decisions have yet been made about which measures will be taken in the Budget, but he acknowledged that prices remain high despite the rate of inflation falling.

“We have made progress in inflation coming down. Two years ago, inflation was above 10%, then it moved to around 5% now it should be somewhere between 2% and 3% that is really important … but prices are still higher, and the Government will decide in early October … what is the way in which we will respond back to that.”

Article Source – Cost-of-living measures ‘must be a focus’ of Budget 2025 – Harris – RTE

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