High degree of uncertainty across Budget 2024 cost estimates, says PBO

The independent body has called for greater transparency in how the Government calculates the cost of budget measures

The Parliamentary Budget Office (PBO) has called for greater transparency in how the Government calculates its budget costings, as it has identified a high degree of uncertainty in cost calculations for a number of policy measures in Budget 2024.

The independent fiscal oversight body has published its second annual report on the uncertainty of budgetary costings, examining 60 different policy measures in Budget 2024.

The report examines the uncertainty of costing for each policy measure across three categories: data, behavioural and modelling uncertainty.

Of the 60 policy measures examined, seven had a high degree of uncertainty in at least one category.


Costings for three budget measures had high levels of uncertainty in two categories – a new capital gains tax relief for angel investors, changes to capital gains tax retirement relief and an increase to the vacant homes tax.

An increase in the vacant homes tax to five times a property’s local property tax (LPT) charge was estimated by the Government to have a net yield of €1 million in 2024. The PBO said that this costing is highly uncertain as there is an absence of tax return data since the vacant homes tax was first introduced.

The PBO said that the self-assessed nature of the charge introduces significant modelling uncertainty, and behavioural uncertainty is linked to the potential repurposing or sale of previously vacant properties.

Regarding a €55 million measure to provide angel investor capital gains tax relief, the PBO noted that the costings estimate was linked to incomplete data on angel investors, and that there is uncertainty around how the scheme will impact investor behaviour and the extent of qualifying investments.

The Government estimated that an increase in the age limit on capital gains tax retirement relief to 70, and the introduction of a €10 million limit on the relief available for disposals, would cost €21 million. PBO said that the new limit might prompt business owners to reconsider succession planning, and that there is modelling uncertainty around the assumptions and projections concerning gains and future considerations.

The report draws on the information requested from Government departments about the data and methodologies used to prepare budgetary costings, and the PBO noted that information provided “varied significantly, ranging from very general to detailed and relevant information”.

The oversight body reiterated calls for greater transparency and detailed information on budgetary costings, noting that “the information on budgetary costings remains limited and fragmented”.

It highlighted the absence of a “systematic and transparent” framework for budgetary costings.

“The PBO recognises the importance of establishing such a framework. This process could be enhanced through a retrospective assessment by the Government, focusing on the accuracy of budgetary costings, especially for measures that are more significant or costly,” it said.

Ellen O'Regan

Ellen O’Regan

Ellen O’Regan is an Irish Times journalist.