Government's €4.4bn Budget surplus gives it scope for 'strong' cost-of-living  package

Government's €4.4bn Budget surplus gives it scope for 'strong' cost-of-living  package

Sources said that the discussions from across the board would “go down to the wire” as the final specifics of the budget are signed off. Picture: Peter Byrne/PA Wire

The Government will run a surplus of €4.415bn heading into the budget, giving scope for a one-off cost-of-living package of between €2bn and €3bn.

The white paper on estimates of receipts and expenditure which was published at midnight outlines the Government’s broad financial position ahead of Tuesday’s budget.

Windfall corporation taxes mean there will be a €4.27bn surplus heading into Budget 2023. Sources said that this would see money put into the much-flagged one-off package of spending to assist with the cost of living, while a portion will be held back in the event that energy prices continue rising past March, and for saving in the rainy day fund.

The paper shows the Government anticipates running an €11.78bn surplus in 2023.

Speaking at the Port of Cork yesterday, Public Expenditure Minister Michael McGrath said negotiations on the final shape of the budget would continue until tomorrow, Sunday.

“We’re putting the finishing touches to the budget at this point, still settling estimates with a number of Government colleagues, but making very good progress and I anticipate that [Finance] Minister [Pascal] Donohoe and I will present a final package to the leaders come Sunday,” Mr McGrath said.

I think it will be a budget that will bring significant benefits to people very quickly. 

"It is going to focus very much on cost of living, supporting households, supporting businesses. The months ahead will be tough, we acknowledge that.”

Speaking in Cork on Friday, Public Expenditure Minister Michael McGrath said: '[The budget] is going to focus very much on cost of living, supporting households, supporting businesses. Picture: Iain White
Speaking in Cork on Friday, Public Expenditure Minister Michael McGrath said: '[The budget] is going to focus very much on cost of living, supporting households, supporting businesses. Picture: Iain White

Mr McGrath said the Government was aware of protests over the cost of living, and said that the cost-of-living package would be “strong”.

“We know that people are hurting. It is really difficult now for a lot of people to make ends meet, bills are rising, and the bills are going to rise further. Many of the announcements we’ve had in relation to utility increases have yet to fully kick in.”

Sources said that the discussions from across the board would “go down to the wire” as the final specifics of the budget are signed off.

One measure debated yesterday was a potential tax relief for landlords.

A senior source said that this will take a backseat if necessary to a tax relief for renters. The move for renters is seen as “more necessary” and “easier to do” by some on the Fine Gael side of the Coalition. 

Doubts exist about whether any change of tax treatment would deter smaller landlords from leaving the market.

Businesses will receive supports under a number of schemes, including a Revenue-administered scheme described as being similar to the Covid restrictions support scheme (CRSS) which was rolled out during the Covid pandemic, as well as low-cost loans and an energy-related payment.

Sources said that the shape of a €200 childcare fee cut had yet to be finalised but that there is “no resistance” to the overall idea.

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