Budget aims to stave off winter of discontent

Micheál Martin said the Budget has to be in the context of a once in a century pandemic, and it's an extraordinary situation that this year and next year we'll be looking at 400,000 jobs, brought back into the Irish economy. Picture: Sasko Lazarov / RollingNews.ie

The Government has moved to stave off a winter of discontent in Budget 2022 by revealing new spending and tax cuts of €4.7bn to help the elderly, parents, young people and other vulnerable groups.

Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath revealed a suite of measures aimed at offsetting inflation and rising energy pressures.

Some ministers conceded it was a Budget 'to stymie' Sinn Féin, with major spending increases announced by Public Expenditure Minister Michael McGrath.

Speaking to the Irish Examiner, Taoiseach Micheál Martin rejected opposition criticism that the Budget allocations for the elderly, carers and welfare recipients were insufficient to counter the spike in energy costs.

“I don't think that's fair because it can't be taken in isolation to what's gone before.

Housing for All will make a big difference in terms of housing supply. The education and higher education measures will matter,” he said.

Mr Martin said the Budget has to be in the context of a once in a century pandemic, and it's an extraordinary situation that this year and next year we'll be looking at 400,000 jobs, brought back into the Irish economy. 

“The recovery is stronger and faster than would have been anticipated,” he said.

Mr Martin too defended the decision not to go beyond the €4.7bn package, even with the significantly lower budget deficit this year.

He said there was a limit to what Government could do and they had to be concerned with not overheating the economy.

Among the main measures announced in Budget 2022 include a €5 increase in the State pension and an €5 increase in all core welfare payments from January. Picture: Julien Behal/PA Wire

Mr Donohoe echoed those comments saying it would be “very risky” to have spent more.

“I believe if we had gone beyond the €4.7 billion it would have been very risky. It would have been risky in the amount of additional debt that we would have taken on, and it would have been risky in putting additional government money into an economy that already has evident constraints,” he said.

Among the main measures announced in Budget 2022 include a €5 increase in the State pension and an €5 increase in all core welfare payments from January.

There will also be a €5 increase in the fuel allowance from today, as well as a full payment of the Christmas bonus.

There is funding for an additional 800 gardai and 400 civilian staff as well as 980 new teachers and an extra 1,165 special needs assistants.

On the tax side, Mr Donohoe announced €520 million in income tax reductions.

He also announced an increase in carbon tax by €7.50 per tonne to €41; an extension of the State’s business support Employment Wage Subsidy Scheme (EWSS); an extension of the 9 per cent VAT rate; 50 cent on a pack of cigarettes; and a €4 billion Covid contingency fund.

Picture: Julien Behal

Tánaiste Leo Varadkar said that the Government’s new Zoned Land Tax introduced in Budget 2022 sends a clear message that “we are coming to tax you” to developers who fail to build on land with planning permission.

The new tax, to be charged at a rate of 3%, is expected to apply to roughly 50% of all zoned land currently available - or roughly 8,000 acres, Leo Varadkar said.

The opposition has slammed the Budget as doing too little for too few people, with one TD calling it 'National Fiver Day'

Sinn Féin Finance spokesperson Pearse Doherty said that the Budget did not adequately address the challenges facing Irish society in housing, health or the cost of living.

Labour's Finance spokesperson Ged Nash called the Budget "anaemic" and "directionless", saying that it had shown a lack of ambition.

"Nothing short of a New Deal for a Fairer Ireland is needed. Instead all we get is tinkering around the edges. 

"A few euros thinly spread here and there. It is reassuring to see that this government retains the title of world-class leakers. 

"The strong record on leaking has been taken to new heights in the last week. We’ve had more leaks than you’d find in a Welsh greenhouse."