Irish Budget to Include 2.4 Billion Euros of ‘One-Off’ Supports
Ireland to Provide Temporary Financial Assistance
Ireland is set to introduce one-off financial supports amounting to approximately 2.4 billion euros in its budget for 2024. These supports will be added to the planned permanent spending measures and tax cuts, as confirmed by a reliable source familiar with the process. The government’s decision to increase core, recurring public spending by 6.1% or 6.4 billion euros next year deviates from its budget rule of limiting expenditure growth to 5% for the second consecutive year.
Temporary Supports to Alleviate Cost-of-Living Pressures
While the additional temporary supports aim to assist households and businesses in dealing with cost-of-living pressures, the government assures that they will not reach the scale of the 4 billion euros provided last year during a period of high inflation. The upcoming package, as reported by the Irish Independent, is expected to exceed 2.3 billion euros. These supports will be implemented gradually throughout the remainder of this year and early 2024.
Boosts to Welfare Payments and Energy Bill Assistance
Various forms of support will be offered, including boosts to welfare payments, assistance with energy bills, and extensions to excise duty cuts on petrol and diesel costs. The government aims to alleviate the burdens faced by the public while carefully managing inflationary risks. However, Ireland’s central bank has cautioned that the implementation of further one-off measures may contribute to prolonged high prices.
Focus on Future Healthcare and Pension Costs
In addition to the temporary supports, the budget will outline the government’s strategy to transform projected budget surpluses into a sovereign wealth fund. This fund will address future healthcare and pension costs associated with Ireland’s growing and aging population. Furthermore, the budget will introduce a smaller public investment fund, primarily serving as a buffer against capital spending cuts during economic downturns.
Climate-Focused Projects and Greenhouse Gas Emissions
Over the next seven years, the government plans to expand the public investment fund to 14 billion euros. This fund will also be available for climate-focused projects, ensuring progress towards reducing greenhouse gas emissions. The flexibility to allocate funds to climate initiatives will contribute to achieving environmental targets. The detailed announcement on Tuesday will shed light on how these funds will be utilized.
It is crucial for the government to strike a balance between providing temporary assistance to the public and maintaining long-term fiscal stability. By incorporating these one-off supports into the budget, Ireland aims to address immediate challenges while safeguarding the nation’s economic future.