Paul Hosford: If tough decisions have to be made, remove the secrecy
One aspect of the Labour Party's alternative budget that caught the eye was around child benefit. It was not just the proposal, but the reasoning which came with it. File photo
In the week before the budget, part of the choreography of the week will be the alternative budgets laid out by opposition parties.
While costed, these documents are always more ambitious than the Government's versions, Paschal Donohoe's prudence not needed if the measures are not going to be implemented.
It's one of the true joys of opposition; a chance to hit the Government for not going far enough while not having to actually implement anything you say you would do.
Across last week, parties lined up to explain their own differences from the Government's then-mooted plans, but one aspect of the Labour Party's which caught the eye was not just a proposal, but the reasoning which came with it.
The party not only proposed a second tier of child benefit, but specifically said what it was willing to forgo in order to achieve it. The party's document reads:
"A children’s budget to end child poverty with an allocation of €770m for a targeted second tier of child benefit, supported by not reducing Vat in the hospitality sector."
There is a politics at play here, yes — Labour wanted to put itself ahead of the Government announcement on Vat and play to working families — but it was refreshing to see a budget measure described in such a clear cause-and-effect manner.
Tuesday's budget announced that the Vat rate for hairdressers, restaurants and restaurants in hotels will drop from 13.5% to 9% from July 1 next year onwards. It will cost €232m for half a year and over €600m for a full year.
Mr Donohoe and public expenditure minister Jack Chambers have defended the move, saying it will protect thousands of jobs. Labour's proposal, it says, reduces child poverty by a quarter and the child poverty gap by half.
With a €1.5bn tax package available to the Government heading into Tuesday — €150m was pulled for targeted supports on the day — Labour was underlining something that isn't always clear with the so-called "budgetary process", that is Newton's third law of motion. For every action, there is an equal and opposite reaction.
During the financial crash the media, and the public generally, got very comfortable comparing the nation's finances with that of their own households.
It made the issue of our national financial collapse tangible, but removed the complexity of revenue raising and demographic growth and underfunded service demand among a million other things.
But the core of it made things like that choice understandable — if you have money to go on holiday, you may not have money to upgrade a car.
In this case, the Government has opted to try at least to protect an industry it feels is vulnerable which has suffered in recent years (while also receiving a lot of State support, it should be added) in a bid to ensure jobs are secure.
More than 200 Irish restaurants have closed in 2025, with the Restaurants Association of Ireland previously warning of further closures and job losses if the Government failed to urgently act.
At the same time, a recent study by the Economic and Social Research Institute shows that child poverty levels are currently on a par with the years following the 2008 financial crash when the skyrocketing cost of housing is factored in.
It shows that more than 225,000 children are currently living in poverty here, placing Ireland 16th out of the 27 EU nations when measured by the same housing costs metric.
Now, it is not as crude as giving to one and not another. There are no restauranteurs coining it next July through a modest Vat cut that will cause the structural issues which lead to child poverty.
The Government will hope that addressing costs ensures hospitality businesses stay open, generating tax and employing staff who are in theory lifted out of poverty and ensuring that child benefit can be addressed in a later budget, so it's not necessarily binary.
But the two serve as an example of choices. Those made and those not.
In his speech, Mr Donohoe talked about this, as he reasoned why the Government would choose to leave tax bands for workers as is.
He said:
"The one-off measures of recent years must be replaced by more targeted and permanent supports, giving greater certainty to people.
"Any budget that attempts to achieve everything in a single go weakens our ability to be safe in a turbulent world. This is why we make the case for running budget surpluses and for setting up funds for the future.
"Not for some abstract reasons, but because this approach gave us the ability to help in the toughest of moments in recent years, and it will do so again.
"That is why we have to strike the right balance between increasing investment and moderating the growth in day-to-day spending. That is why our tax changes must be of a certain value, and no more."
In his speech, Mr Chambers spoke of how the budget "shifts the focus from isolated departmental or sectoral needs to our country’s broader strategic priorities, considering the trade-offs and choices we will face along the way".
Those choices are imprinted all over this budget, but one area in particular is childcare. I am very open in these pages that childcare is my key proximate issue.
My wife and I, like many, pay a second mortgage for our two boys to be cared for so that we can work. The budget could have worked towards the Programme for Government commitment of €200 a month childcare. It could have eased the burden of working parents.
But at the same time, there were about 40,000 children in Ireland on a waiting list for a creche place at the end of the summer break. In Cork alone, 652 children under the age of one were vying for just 15 places available.
Weighing this up, children's minister Norma Foley opted to direct funding towards a goal of 35,000 additional places. Whether that comes to fruition remains to be seen, but is a choice that you can criticise?
If you didn't get a fee cut, sure. If it means you get a place finally? Probably not.
Of course, these choices underline how much of this budget is eaten up simply playing catch-up on years of combined underinvestment and demand growth.
But much of the frustration people feel is in how these choices are communicated.
In the childcare example, the simplest thing in the world is to tell people that a simple choice was made and then lay out how the €200 a month figure will be arrived at if that's your plan.
Trust people to understand that the Government aims to do things over a number of years and that you are not blind to their concerns. Stop framing the Budget to media as a giveaway (and the media should do the same, to be clear).
To be fair to Mr Donohoe and Mr Chambers, they have somewhat attempted that in their language around this budget, focusing on structural needs, but the documents themselves still speak about a rolling 12-month cycle.
If tough decisions have to be made, clue the public in before Budget Day and remove the shroud of secrecy around the process. Trust people to understand that choices have to be made and better explain which ones are.
Working people, retired people, the poorest in society understand making choices, they've been making tougher ones for years now.
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