Price of cigarettes likely to rise by 50c in budget 

Library picture.

An increase of 50c is expected to be added to the price of a pack of 20 cigarettes in next Tuesday’s budget, Government sources have said.

A carbon tax hike, together with the 50c hike on cigarettes, are expected to yield €165m in total next year.

Finance minister Paschal Donohoe will also introduce a new tax to activate vacant lands for residential purposes, to replace the vacant site levy.

Finance minister Paschal Donohoe speaking to reporters, at Government Buildings. Picture: Julien Behal/PA Wire

In tandem with the reforms to incentivise the bringing forward of supply, there is a need to balance this with penalties for non-activation of sites, he will say.

This forms part of the Government’s commitment to the ‘use it or lose it’ principle in planning.

Of the €500m to be spent on tax cuts, more than €400m will be spent on indexing the income tax bands and the USC, with €30m or so to be spent on the Help to Buy Scheme. 

Mr Donohoe will also announce new VRT rates for those buying ‘greener’ cars in a bid to boost the transition from fossil fuel-powered vehicles.

Tánaiste Leo Varadkar confirmed that pension and welfare increases will form a central part of the budget.

Tánaiste  Leo Varadkar at University College Cork. Picture: Daragh Mac Sweeney/Provision

Addressing the cost-of-living increases, an additional targeted package for pensioners who live alone will be included in the upcoming budget.

While all pensioners are expected to get a €5 increase on their weekly State pension, the Government is conscious that those living in houses on their own still have the same heating and electricity costs as couples sharing, and are looking at measures to address this.

The Government is also working on ways to even out the burden of rising energy costs for single people. Ministers are conscious that the across-the-board State pension increase would see an extra €10 a week coming into some homes, but not others. It is understood that all options, including the living alone allowance, the fuel allowance, and the pension are being looked at in relation to this.

Mr Varadkar said a considerable chunk of funds available will be directed into increasing the State pension and other social welfare benefits.

"The budget provides for an extra billion in new measures, in new announcements if you like, on Budget Day," he said.

A big part of that is going to be taken up by the pension and welfare package, and it needs to be because of the rising cost of living. We need to see pensioners and others get a weekly increase, they haven't got that since 2019.

"I suppose that means that money for other new measures is relatively limited."

He said the cost of childcare will also be examined in the context of Tuesday's budget.

"We have skill shortages across the economy, and many parents — particularly women but not exclusively women — can't get back into the workplace because of the cost of childcare, so I think it is something that you'll see the Government focus on in the years ahead."