CASH PLAN
Major boost as thousands of Irish to benefit from extra €8.3bn in Budget 2025 amid tax cut & public spending plot
Planned spending has gone above the five per cent rule
THE Government will make an additional €8.3 billion in resources available for use in Budget 2025, it has been confirmed.
The overall package is composed of additional public spending amounting to €6.9 billion and €1.4 billion towards tax cuts.
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Minister for Finance, Jack Chambers and the Minister for Public Expenditure, Paschal Donohoe today published the Government’s Summer Economic Statement 2024 following agreement at Cabinet this morning.
The document sets out the broad fiscal parameters ahead of the budget.
Some €90.9 billion is being provided for current expenditure, while €14.5 billion is being provided for capital expenditure under the Government’s National Development Plan.
The plans means that total spending in 2025 will rise by a whopping 6.9 per cent.
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This breaches the Government's own National Spending Rule, which is supposed to limit overall annual spending increases to five per cent.
A Government statement explained that spending strategy has been adjusted "to accommodate higher capital spending and to provide additional public services against the backdrop of a larger population and higher price levels."
Last week it emerged that the Department of Health is already €1.1bn over budget for this year.
An additional €1.5 billion in funding has been allocated across the health service this year.
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This is to take the "additional demands and complexity within our health services, particularly in the acute sector," into account.
Little known social welfare benefits thousands are entitled to
Speaking today, the Minister for Finance said: "The Government’s forceful and timely policy responses have helped ensure the continued resilience of the economy in the face of a succession of major external shocks."
Chambers, who is leading the budget for the first time since taking over the post two weeks ago, said inflation is now back at rates "consistent with price stability" and the economy is continuing to "operate at full employment".
He added: "However, while the economy is in reasonably good shape at present the external outlook remains highly uncertain with elevated geopolitical tensions’.
“In terms of the public finances, at the headline level, our public finances are performing well and budgetary surpluses are in prospect over the coming years."
Chambers explained in the provision of additional public services, additional financial resources must go "hand-in-hand" with mechanisms that improve public service delivery.
He said: "Value-for-money considerations must be to the fore and an increased focus on efficiency and productivity is needed.
“On the taxation side, a package of €1.4 billion has been allocated which will ensure that Government has the scope to once again adjust tax credits and bands to ensure workers do not find themselves paying a higher rate of tax because of higher wages.
“I strongly believe that the strategy that we have announced represents an approach that takes into account the economic realities of today while still ensuring the sustainability of the public finances into the future.
"There are many challenges on the horizon but there are also opportunities.
" It is crucial that we use the current window of opportunity presented by the relative health of our economy and public finances to seize them."
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