Reductions in personal tax, further energy supports and a major package aimed at reducing child poverty are to be included in October’s budget, Taoiseach Leo Varadkar has said.
Speaking to journalists at Government Buildings after the final Cabinet meeting before the summer break, the Fine Gael leader put a strong emphasis on providing supports for businesses.
He said small businesses in particular were facing an array of rising costs including increases to the minimum wage, high energy bills, additional sick day provision and the auto-enrolment of workers in pension schemes.
“And I think they’re going to need some help with that,” he said.
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The Taoiseach also outlined plans for a range of other giveaways in the budget. He said there would be more support for people with their energy bills, adding that it was “pretty obvious that people will need help” with them during the winter.
“The basic principle is that there will be help for households and businesses with energy costs, it will be announced in the budget. It’s being done because we don’t believe energy prices will have fallen fast enough by then,” he said.
He also said reducing the cost of childcare and alleviating child poverty would be “a very strong theme in the budget”.
Mr Varadkar defended Fine Gael’s determination to secure tax cuts in the budget, but acknowledged that any package would be in line with what was agreed in the Coalition’s programme for government.
“What’s in the programme for government is that we will index tax bands and tax credits so that more people don’t end up paying the higher rate of tax,” he added. “And we have to work out the details of how we’re going to do that in this budget. I’ve some ideas about how that can be done, but we’ll work that out and have it agreed on budget day.”
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The Taoiseach sought to highlight Fine Gael’s role in reducing tax over the past decade in government.
“I would say this: a Fine Gael government started reducing income tax and USC in 2014,” Mr Varadkar said. “So somebody earning €40,000 gross today pays almost €3,000 less in income tax and USC than they did in 2014 – that’s the difference of having Fine Gael in government,” he said, adding that people on such an income were better off than they would be “had there been a left-wing government in office”.
The summer economic statement published by the Government earlier this month suggested there would be an additional €6.4 billion in spending in the budget, with €1.1 billion of that to go on adjusting tax bands and credits to reduce the amount of tax people would otherwise pay.
But Ministers freely acknowledge there will be an additional multibillion package of “one-off” spending measures which will assist people with the cost of living. These are expected to include a repeat of last year’s energy credits and one-off welfare payments.
Mr Varadkar described a repeat of the energy credit as an “easy option” in helping people at a time of high bills. “You can just take it off the bill, it applies to everyone,” he said. “But as we did previously, there is a targeted element as well, recognising that [the] poorer might need help more.”
Opposition TDs last year claimed the Government had ample time to create a targeted rather than universal measure to exclude those on higher incomes and those with holiday homes from receiving the energy supports.
