Harris insists he still wants beneficial tax changes in next budget

Tánaiste and Fine Gael Minister for Finance Simon Harris. Photo: Leah Farrell/© RollingNews.ie

Tánaiste Simon Harris has insisted that he still wants to see tax changes in Budget 2027 but warned that the budget will have to contain “balance”.

The Spring Economic Forecast will be discussed at Cabinet on Tuesday and will outline the parameters of Budget 2027, which will be announced on October 6.

It will be published by Mr Harris, the finance minister, and public expenditure minister Jack Chambers in the afternoon.

The Tánaiste asked his economics team in the Department of Finance to consider the macro-economic impact of various scenarios arising from the war in Iran and the impact on energy supply globally.

The plan will set out three different scenarios, all of which detail the potential impact of the conflict on the Irish economy.

The scenarios will detail the effect of the disruption to global energy supplies and the turbulence that this has caused internationally, and how each scenario will impact growth in the economy.

Speaking in Drogheda on Monday morning, Mr Harris said the Irish economy is still expected to grow next year, and he expects that Budget 2027 will contain a personal tax package for workers.

The finance minister said the scenarios will examine what will happen if the war ends soon, and a “stark” scenario where it “continues, and continues, and continues”.

He said Ireland is facing any economic issues that may occur from a “position of strength”.

“At a broad level, the fact that the Irish economy has built up fiscal buffers does provide a degree of protection, provided we take this step by step,” Mr Harris said.

“Of course, the budget will want to make progress on programme for government commitments.

“I do think one of the ways you help people during a cost-of-living crisis is to allow them keep some of their own money. There's clear commitments around income tax, and I'm determined that we make progress on them. We didn't last year.

“There has to be a personal income tax package, in my view, in the budget this year, and I'd like to see progress in that in each of the four budgets the Government will deliver.” Mr Harris said that budgets are “always a balance” and must be “seen in the round”.

He noted that while Fine Gael, Fianna Fáil, and independents who formed the Government all had “areas where they wanted to make structural changes”, they wanted to “move beyond just conversations about one-off” measures.

He continued: “Childcare is one example where rather than having a conversation, and I don't in any way say this dismissively, with about €5 or €10, you'd actually have a conversation about how you could build a childcare system that works for people, that works for parents, that works for the economy, and that ultimately reduces cost as well.” 

The Tánaiste also said it would be “foolish” to rule anything out ahead of October’s budget, including energy credits.

He warned that having an energy crisis in the winter is “a very different and even more difficult proposition”.

This, he argued, is why he wanted scenario planning included in the spring economic forecast.

Elsewhere, Mr Harris distanced himself from comments made by former taoiseach Leo Varadkar on the Path to Power podcast.

Mr Varadkar said a conversation had to be had regarding suggestions that rural workers were the “real workers” when they were being “subsidised” by urban workers.

Mr Harris said he did not “believe in dividing people into where they live or what job they do”.

He added: “People are absolutely entitled to their views, and that's always very healthy in a democracy.

“But I find hard-working people who put their shoulder to the wheel in every part of Ireland.”