Neil McDonnell: Small firms face costly hike in minimum wage

With inflation forecast at 5.25%, the 12.4% rise (13.9% including auto-enrolment) is the biggest adjustment in the national minimum wage since the great financial crash

For the public sector, large multinationals, and firms with pricing power, the minimum wake hike is an irrelevance. But for many others, typically services and small retailers, it will be quite damaging. 

The run-up to Budget 2024 saw the Government prioritise the expansion of fiscal giveaways to the greatest extent possible, while not writing them into recurrent expenditure. However ‘one-off’ energy credits and social welfare bonuses are likely to provoke similar payments in future budgets.

The tax package is minimal but welcome. The adjustment to the standard rate cut off to €42,000, along with the USC and tax credit adjustments, mean the average worker will be almost €700 per annum better off.