Budget measures to be reviewed in January, says Varadkar

Most of the payments in the Budget will be front-loaded to get help to people 'upfront', the Tánaiste said
Budget measures to be reviewed in January, says Varadkar

Tanaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar, at a press conference in Dublin following the unveiling of the Government's Budget for 2023. Picture: Damien Storan/PA Wire

A review of the measures introduced in the Budget will be held in January, the Tánaiste has said.

In January “we will see how the economy is doing” and examine the Book of Finances, Leo Varadkar said.

 However, he said he did not envisage a mini-Budget in the new year.

Most of the payments in the Budget will be front-loaded to get help to people “upfront”, he said. Gas prices could fall as the world heads into a downturn.

One-off payments will be made before Christmas with new payments from the new year.

The Government had responded “dynamically” to the impact of the war in Ukraine and rising energy costs and the unpredictable situation, added the Tánaiste.

He said: “Ultimately this Budget is about helping people with the cost of living, reducing the amount of tax you pay, increasing welfare payments and pensions, more money in people’s pockets and reducing some costs that are very high in Ireland, like childcare or public transport or the cost of putting children through college,” Mr Varadkar told RTÉ’s Morning Ireland.

“It’s also very much about helping businesses with energy costs too.

“The way it works is that the one-off payments fall between now and Christmas. The energy discounts are before and after Christmas and the increases in the weekly rates happen in the new year.

“So essentially we’re frontloading the Budget so that people are getting more upfront. You then see permanent increases in payments, pensions, welfare and permanent decreases in income tax in the new year.

“But we will have to see where we are in January, February.”

Mr Varadkar also defended the decision by the Government not to put a price cap on energy prices.

That was something the Government was very nervous about doing, he said. In the UK they set a cap and the government would pay anything above that no matter what it was.

The Tánaiste said he was always afraid to rule anything out as “you never know what’s coming down the line.” A price cap sounded like a bank guarantee, he said. It was impossible to cost. “You're setting yourself up.” 

Mr Varadkar said one could not give people certainty if one didn’t know what certain measures would cost or if they could be afforded.

What the UK had was fake certainty, he said.

Minister for Social Protection Heather Humphreys said the Government had been careful in putting away €2bn in the Budget for the Rainy Day Fund. Picture: Gareth Chaney/Collins
Minister for Social Protection Heather Humphreys said the Government had been careful in putting away €2bn in the Budget for the Rainy Day Fund. Picture: Gareth Chaney/Collins

He said energy prices might fall by February but this was uncertain.

“If prices continue to rise, we will have to look at it again in the new year and that’s why we’ve put money in the tank. We’ve set aside 2 billion voted into the Reserve Fund late last night. And we have other contingency funds as well.

“So yes, we will have to look at the situation come January, February, see where we are in terms of the public finances, what the economy is looking like, and particularly what prices are looking like.

“We do have some financial firepower to intervene again to help people in the new year if we have to. And we might not have to. It is a prudent approach for helping people most now when they need us."

Mr Varadkar defended the €12 increase in social welfare saying the payments were front-loaded but when added to other increases it was more than €20 per person per week.

When asked if he had pushed for a €15 increase, the Tánaiste said that all Ministers go into negotiations with their own priorities, but there was only so much money to go around and the figures had to add up in the end.

It was not fair that people earning under €50,000 had to pay the top tax rate, but getting it to €40,000 in the Budget was a big step, he said.

In response to criticism from Sinn Féin, Mr Varadkar said it was possible to “zero in” on any aspect of the Budget and say it was not fair, but the best help the Government could give was by reducing the cost of living.

“You have to take the Budget in the round and see it as a progressive Budget.”

'Only right and proper'

Minister for Social Protection Heather Humphreys said the Government had been careful in putting away €2bn in the Budget for the Rainy Day Fund.

"That was being prudent", she told Newstalk Breakfast.

The country had come through difficult times with the pandemic and the war in Ukraine and thanks to previous Fine Gael governments there was money available to help people, she said. The cost of living was going up and people needed help, it was important to do that now.

The least well-off were getting the most help, she added. “That’s only right and proper.” The targeted payments were aimed at helping those who needed it most.

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