Finance minister: 'No giveaway budget' arising from windfall taxes

Building windfall taxes into recurring spending 'would be a mistake' in spite of expected €10bn surplus

Michael McGrath: 'The autumn budget will have a tax package. Picture: Sasko Lazarov/RollingNews.ie

Massive windfall taxes from corporations cannot be used to fund a giveaway budget, the finance minister has said.

Michael McGrath was responding to Government forecasts of a €10bn surplus this year, followed by a more than €16bn surplus next year, on the back of soaring corporation tax receipts.

He said that the autumn budget will have a tax package, but told RTÉ Radio 1’s Morning Ireland programme that building windfall taxes into recurring spending would be a "mistake".

He said that such a move could come "with a high cost down the line".

“The one mistake that we simply have to avoid is making permanent expenditure or taxation commitments that reoccur every single year on the back of corporation tax receipts that could prove to be temporary," Mr McGrath said.

Because if the receipts start to fall as at some point they may well do, then we are left with a hole in the public finances.”

Mr McGrath said that the Government was running a surplus despite putting €30bn into exceptional payments during the pandemic and to ease the cost-of-living crisis and did not rule out additional spending on supports.

“We can all see inflation in our daily lives. When we do the grocery shopping, when we pay our gas and electricity bills. We can all see it and not everyone has the capacity to handle it equally, and I acknowledge that.

"We have helped a lot so far and depending on the circumstances that prevail in the months ahead there is a willingness to do more.”

Mr McGrath said that there will be a tax package in the budget and that this may include tax measures for landlords.

"It is a fact that we have seen a very significant departure of landlords from the market.

"We need a private rental sector, notwithstanding the enormous investment that we will continue to make in relation to public housing, we need the availability of private rental accommodation.

"I am giving a commitment that there will be measures in the budget both to attract and retain investment in the rental sector," he added.