Families with toddlers to teenagers are to be the big winners in Tuesday’s €10bn budget bonanza to tackle the cost-of-living crisis.
A raft of new measures including free school books for all primary school children, smaller classes, reduced childcare costs, a double child benefit payment, a €500 reduction in college fees, and energy credits amounting to €600 per family are to be unleashed, following sign-off by the three party leaders in the Government.
Finance Minister Paschal Donohoe described as “demanding” the discussions he and Public Expenditure Minister Michael McGrath held with fellow ministers in signing off on the €6.7bn Budget 2023 package and a cost-of-living splurge on once-off measures of over €3bn.
Education Minister Norma Foley is a big winner, having secured €47m to make school books free for all primary school children on a permanent basis, starting next September.
Ms Foley has also secured a further reduction in the pupil-teacher ratio at primary school level from 24:1 to 23:1, the third such decrease in a row.
Significantly, she has also secured money to enhance and expand the school transport scheme to guarantee latecomers and concessionary ticket holders a seat on a bus.
For third-level students, the cost of going to college is to be reduced by €500 to €2,500 after Higher Education Minister Simon Harris secured funding.
The full details of the childcare scheme were still to be decided when leaders met to sign off on the budget last night. However, a reduction of 20% to 25% for parents is expected next year, although the introduction of the scheme could be delayed for a number of months. A second reduction would also be implemented in 2024, to halve costs for parents.
With childcare costs ranging from €700 to €1,200 per month — depending on the facility and the part of the country — the amount that fees are reduced by would depend on the amount parents are currently paying, but on average savings of between €160 and €200 are likely.
Social Protection Minister Heather Humphreys has secured funding for a double payment of child benefit to be rolled out to families in November.
It is expected that all social welfare payments will increase by at least €10 per week; however, this was up for discussion by the Government leaders last night.
There will also be a large increase to the point at which people pay the top rate of tax, as it will rise to close to €40,000 in the budget. At present, the higher 40% tax rate kicks in on income over €36,800 for a single person.
Mr Donohoe is set to raise this point by €3,200 with a similar increase for married couples or those in a civil partnership on one income.
It is also expected that there will be additional tax credits of between €200 and €400 for renters, with the final amount yet to be agreed.
There will be a 50c excise hike on a pack of 20 cigarettes, but it has been confirmed that there will be no move up or down on alcohol excise.
It is also understood that the current cut in fuel excise will be extended to February at least and it is likely to be extended beyond that.
The controversial help-to-buy scheme which helps first-time buyers to purchase a newly-built house or apartment and which is due to end in December is to be extended. The scheme applies to once-off self-build homes and only applies to properties that cost €500,000 or less.
In light of an exchequer surplus of €4.4bn, Government sources have made clear that the rainy day fund will get €1bn at least.
Electricity credits amounting to €600 for families are confirmed, spread over two or three bills. An extension to the 20% reduction in public transport fares is also expected.
The Vat cut for the tourism and hospitality sectors will not be extended beyond February.
For businesses, there will be an energy scheme aimed at SMEs that will help with the spiralling cost of electricity and heating bills. Low-interest loans to help businesses to develop and grow will also feature.
There will be increased grants for businesses that take people off the live register, as well as increased funding for training schemes.