Neil McDonnell: Businesses can’t expect too much from a budget prepared with an election on the horizon

The 6.3% increase in the minimum wage will take the total increase in labour cost to 18.7% in 13 months

Labour cost attracts little attention from Government or unions, but is deeply troubling for small services and manufacturing businesses, which suffer from the Baumol effect, or “cost disease.” 

There isn’t a finance minister throughout the EU who would not donate a limb to be in the position Jack Chambers and Paschal Donohoe are in this year: having so much money to spend that they are limited only by the capacity of the domestic economy to absorb it.

Budget 2025 is pitched primarily at the punter and voter, through a large cost-of-living, welfare and personal taxation package. VAT, which has been a central plank for the hospitality and services industries, has not been touched. Our hospitality and services businesses face an existential challenge in 2025.