Wednesday, October 4, 2023
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Ireland aims to ease cost of living pressures with 'two budgets in one'


DUBLIN (Reuters) – Ireland will deliver what ministers say on Tuesday are two budgets, with usual spending increases and tax cuts, While helping businesses and consumers pay soaring energy bills, they hope it will be a one-time intervention.

As one of the few EU countries to achieve a budget surplus this year – in the case of Ireland, due to a surge in corporate tax revenue – ministers will be able to increase next year while maintaining public revenue expenditure.

The government had announced in July that it would increase the 2023 budget package to 6.7 billion euros ($6.5 billion) to increase recurring spending and tax that people can earn tax-free amount to help offset some of the impact of inflation reaching near 40 yearly highs 10%.

It also pledged to provide a one-time package, including grants for companies and cash to pay energy bills for households. That would amount to about 3 billion euros, according to two sources with knowledge of the talks nearing an end.

As most of the one-off payments will be made within weeks, 2021 the budget surplus will be lower than the Treasury forecast of 0.9% of GDP, while of 2.2% of the provisional forecast does not include budget measures.

In May, the European Commission predicted that Denmark would be the only country in the EU to achieve a surplus this year, with Sweden, Ireland and Luxembourg also joining 2023.

Without corporate taxation, mainly from its large multinational sector, Ireland would still spend less. Treasurer Paschal Donohoe is expected to announce that he will put some of his excess earnings into the state’s now-empty “pre-emptive” reserve.

The rest will help fund permanent increases in social welfare rates, childcare cuts and a public sector pay deal, as well as one-time measures in Additional child benefits and allowances designed to protect people from fuel poverty.

( $1=1.0350 EUR)



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