Budget talks set to continue across weekend as plans made for massive future surpluses

Michael McGrath said a plan will be set out for tax surpluses projected in future years. Picture: David Young

Budget talks between line ministers and those who control the purse strings will continue through the weekend as the Government plans to set out how it will spend massive surpluses in the coming years.

With just days to go until the budget is unveiled, much of its final shape has not been agreed. The Department of Finance revealed yesterday that there will be an €3.4bn surplus in 2023, with a forecast of a further €9bn in 2024.

The Government will on Tuesday set out what it plans to do with future surpluses.

Finance Minister Michael McGrath said the White Paper issued by his department shows that corporation tax receipts “are volatile in nature” and he said there was a potential “spillover” of a slowdown in tax revenue from large firms.

“This is why on Tuesday next we will set out a plan on what we intend to do with the surpluses projected for the years ahead,” he said.

This plan will involve making the financial future of the country and our people safer, and ensuring we can invest in infrastructure and climate measures through the economic cycle.

It is understood that the largest change to the universal social charge since its introduction will be the cornerstone of the budget, with Government sources saying that lower-paid workers should benefit by “hundreds of euro” a year.

Middle-income earners

An increase in the higher tax threshold will also see middle-income earners benefit.

In housing, it is understood the renters’ tax credit will increase to around €750, but a jump to €1,000 is seen as potentially too costly.

A similar tax credit for landlords is expected, as is a targeted mortgage interest- relief scheme.

Childcare costs are likely to come down, but not by as much as had previously been hoped.

The back-to-school allowance will be increased and a free school books scheme for second level is being discussed.

The price of cigarettes is due to rise again, but a senior Government source said that a hike in alcohol duty would be unlikely.

Heather Humphreys  confirmed there will be an increase in the standard jobseekers’ payment. Picture: Maxwells

Social Protection Minister Heather Humphreys has confirmed that there will be an increase in the standard jobseekers’ payment in next week’s budget, but would not be drawn on the extent of the hike.

Speaking at the Tidy Towns awards ceremony at Croke Park, the minister said that while budget negotiations continue “what I can tell you is there will be an increase in the basic social welfare rate”, adding that there “will be some one-off measures as well”.

“I’m working my way through it at the minute, and I’ll be happy to make the announcement on Tuesday,” said Ms Humphreys. “What we want to do in this budget is put more money back into people’s pockets.”

Speaking in Macroom yesterday, Tánaiste Micheál Martin said “a significant” amount had been agreed and he hoped that decisions on expenditure can be largely wrapped up before the weekend.

“As I speak, ministers are still meeting with Paschal Donohoe in respect of the departmental estimates, which are challenging this year,” Mr Martin said.