Everything you need to know about Budget 2023 and the emergency measures for the remainder of 2022...
After much proclamation and prognosticating,
Budget 2023 is finally here.
As widely anticipated, it's something of a 'two for the wildly expensive price of one' scenario, with business as usual applying to every-day Irish life, alongside once-off measures brought forth to tackle the ongoing cost-of-living crisis.
The overall Budget package stands at €11 billion; €6.9 billion allocated to Budget 2023, and €4.1 billion applying to emergency measures for the remainder of 2022.
"I recognise these are significant figures," said Minister for Finance Paschal Donohoe. "I also recognise the needs of people are significant." He also vowed to clamp down on energy providers raising costs if the European Union fails to implement a much-vaunted windfall tax.
"Ireland aims to be part of this EU-wide response to high energy prices," said Minister Donohoe. "If this is not possible, this Government will bring forward our own measures.
"There are major challenges coming that we know will be difficult for the population," he later added.
Donohoe, alongside Minister for Public Expenditure and Reform Michael McGrath, made it all official in Dáil Éireann at lunchtime on Tuesday (27 September), and here are the key bullet points you ought to be aware of:
- Energy credits of €600 to be provided to every household in three instalments of €200 – first €200 instalment arriving before Christmas 2022, two to follow in 2023
- €400 lump sum for those in receipt of fuel allowance
- Excise duty on packet of 20 cigarettes to be raised by 50 cents
- Pro rata increase announced for other tobacco products
- HRT and nicotine replacement products to become VAT-free
- Current excise reduction on diesel and petrol extended – 21 cent per litre for petrol and 16 cent per litre for diesel
- Increase of of just over two cents, including VAT, per litre of petrol and diesel in carbon tax
- Carbon tax will rise from €41 per tonne to €48.50 per tonne from October 2022
- 5.4 cent per litre for Marked Gas Oil extended until 28 February, 2023
- 9% VAT rate of electricity and gas extended
- USC band increased by 2% to account for minimum wage increase (€21,295 to €22,920)
- Renters will receive a €500 tax credit for 2022 and subsequent tax years thereafter – this applies to renters who are not in receipt of any other housing supports
- Help-to-Buy scheme will continue at current rates until end of 2024
- Pre-letting expenses for landlords doubled to €10,000
- Vacant Homes Tax to be introduced to increase supply of homes for rent or purchase to meet demand – three times the local property tax rate
- Period for when a premises must be vacant reduced from 12 months to six months
- Residential Zoned Land Tax to be introduced
- Weekly social welfare payments will increase by €12
- Double welfare payment in October / usual 'Christmas bonus' at Christmas
- Businesses will receive up to €10,000 per month to cover energy bills
- Childcare fees will be cut by up to 25%
- €2 increase on qualifying child payments for under and over 12's
- Double child benefit payment will be brought forth – €140 per child
- Free schoolbooks for primary level, commencing from September 2023
- Once off payment of €500 for those on disability allowance
- Third-level student fees to be cut by €1,000 for 2022/23
- Once-off double payment for those in receipt of SUSI grant
- Concession for those who have a medical card and earn less than €60,000 per year
- Entry point for the top tax rate in Ireland will rise to €40,000
- Lower public transport fares
- 1,000 additional Gardaí and over 400 new Garda staff
- Special exemption order required by nightclubs to open will be halved from €110 to €55
- 9% VAT rate for tourism and hospitality sectors will continue until end of February 2023
- VAT on newspapers will be abolished from the start of 2023
https://twitter.com/IRLDeptFinance/status/1574734535769604098
During his address, Minister Donohoe immediately referred to the problems faced by people due to rising energy costs, be it the young, the old, the vulnerable, or those running businesses across the country.
Donohoe noted that the Budget "must help" those struggling, pointing to "unforeseen risks and challenges becoming more frequent in their occurrence and more severe in their impact". He added that it is "imperative" that Ireland responds and recovers from these "shocks", referring to the ongoing war in Ukraine and the Covid-19 pandemic as recent major knock-on challenges to overcome.
"The wholesale price of natural gas is now about eight times its average level in the years preceding the war," he said.
Donohoe said that his department has updated its forecasted headline inflation rates to 8.5% for 2022 and just north of 7% for 2023. He added that his department's forecasts for core inflation has been revised up to 5¼% for 2022, and just over 4.5% for 2023.
Donohoe noted that Ireland's labour sector has experienced a huge bounce-back post-pandemic, highlighting significant employment growth.
Donohoe pointed to the overall importance of a strategic Budget, warning that Brexit "could bring further challenges" while praising his Government's "appropriate responses to the unique challenges that our country [has] faced".
The Minister further pointed to the Government's response to the pandemic, insisting that the lessons learned and measures taken during that time period will help with the current situation Ireland and its people finds itself in. Closing on an "optimistic note", Minister Donohoe declared his confidence in the current Government to support the Irish public over the coming months.
"I know we need to do more," he said. "We need to build more homes, we need to continue to improve public services and respond with courage and with the right solutions to our defining challenge of climate change. We can and we will.
"Many are looking to the Budget today for confidence," Donohoe continued. "They are looking to the Budget for help. We can and we will help."
Prior to the official unveiling, Taoiseach Micheál Martin said the Budget is "sustainable, with help for people this year and next. It will mean investment in public services, reduced childcare, education and healthcare costs.
"It will increase social welfare supports, and put money in people’s pockets through tax cuts. Overall, It's a comprehensive, fair, and progressive package to tackle an unprecedented crisis."
