Budget 2024: Leo Varadkar rules out ‘broad-based’ mortgage interest relief

Taoiseach Leo Varadkar has ruled out any “broad-based” mortgage interest relief in the budget on the grounds it would be prohibitively expensive.

His remarks were in response to the announcement of a further hike in interest rates by the ECB, bringing the base rate to 4 per cent for the first time since its establishment.

“A lot of people are experiencing a lot of financial distress because mortgage interest rates have gone up so much so quickly. But anything that wouldn’t be broad based, would be prohibitively expensive,” said Mr Varadkar.

Sinn Féin’s finance spokesman, Pearse Doherty, has been calling for some months for the Government to agree to giving mortgage interest relief for a defined period.

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Mr Varadkar said the Government would not go down that route. “I think if we are going to do something to help people on mortgage interest, it really should focus on those who are paying the highest rates and those who might be at risk of losing their homes.”

The Taoiseach said the detail is being worked on by Minister for Finance Michael McGrath and by Minister for Social Protection Heather Humphreys at the moment.

Mr Varadkar was speaking in Limerick ahead of Fine Gael’s parliamentary party two-day think-in. Laying out his party’s other priorities he said the focus for it was “making sure that middle-income people pay less income tax and USC and that they get to keep more of the money that they earn”.

He also hinted of a possible intervention if fuel prices at the pumps creep back close to the €2 per litre mark. “

“What we’ll do between now and budget day is really monitor prices at the pumps and then make that decision.”

Mr Varadkar also confirmed the once-off payments in the budget would not be on the scale of last year’s budget when some €4 billion was allotted to discretionary non-repeating expenditure.

[ Interest rates: Pain for homeowners and first-time buyers as rises push up mortgage payments ]

As happened at the Fianna Fáil meeting on Monday, the Irish Farmers Association (IFA) organised a protest outside the Strand Hotel where the meeting was taking place. It is protesting against the recent decision by the European Commission to lower the maximum allowable quantity of nitrates from 250kg per hectare to 220kg per hectare under the Irish derogation from the Nitrates Directive.

The commission cited the ongoing high levels of pollutions in Irish rivers and lakes from agriculture run-off.

Mr Varadkar confirmed he would meet an IFA delegation, led by its president Tim Cullinane. “The derogation is what it is unfortunately because water quality did not improve adequately,” said Mr Varadkar.

Mr Varadkar also said he welcomed the comment by Social Democrats leader Holly Cairns that she would be willing to talk to all parties abut forming a coalition after the next election. He said her position differed from the former co-leaders who “wouldn’t really talk to us” in 2016 and 2020.

Mr Varadkar also said he would lead his party into the next general election.

“I think we can gain seats in the next election both because I believe our first-preference vote can go up. We can also get a better profile of transfers from our Coalition parties and others so that can be achieved. If we gain seats we will be in a position to put together a government if we can find sufficient partners.”

Meanwhile, Mr Varadkar said he takes home €96,000 annually, after deductions, but denied suggestions he is out of touch with the impact of the cost-of-living-crisis and housing crisis for people on low to medium wages.

The Taoiseach, who is entitled to an annual salary of over €200,000, said he has taken a voluntary reduction in his wages for the past 16 years.

When asked what his present annual salary is, Mr Varadkar replied: “It’s €96,000 after taxes and pension levies.”

The Taoiseach hit back at comments yesterday by Ms Cairns in which she said the Taoiseach, Tánaiste and Cabinet members do not understand the impact of the cost-of-living and housing crisis on ordinary people because their high salaries cushion them from the type of financial crisis faced by people on low to medium wages.

“I heard what Holly Cairns said, and I think actually she was referring not just to Ministers but all TDs, so, if I understood what she said correctly, then she’s saying that she feels she’s out of touch,” said Mr Varadkar.

Ms Cairns, who is entitled to a salary of more than €107,000 a year, plus expenses, has not taken recent automatic pay rises granted to Dáil deputies.

“Most politicians that I know are very much in touch with their constituency, with their communities – we wouldn’t get elected, we certainly wouldn’t get re-elected so many times in our constituencies if we didn’t understand the problems and the challenges that our constituents face,” said Mr Varadkar.

The Taoiseach said he has “been taking a voluntary pay cut since 2007″.

When asked if he could elaborate on the amount he has cut from his wages, he said it was “not a secret”, but “I can’t remember the exact amounts”. Later, he said he was voluntarily “handing back about 10 per cent of my salary”.

Mr Varadkar said he was aware other politicians publish reductions in their wages online, but he added: “I’ve never done that, I think that’s a bit trashy, quite frankly.”

In other policy initiatives signalled at Friday’s think-in, Minister for Social Protection Heather Humphreys said children who reached the age of 18 and were still in full-time education would not have their child benefit cut off in future under plans being drawn up for the Budget.

Minister for Higher Education Simon Harris disclosed his plans to offer financial support - including grants and fee reductions - to lone parents and people with disabilities who are in part-time education. It would be the first time that any part-time students will be able to access the same supports as full-time students in higher education.

Ms Humphreys said the free school meal scheme would be extended in the Budget this year, and again in succeeding years, to make it available to all children.

“Children are facing food poverty, and the hot school meals scheme has been very successful in addressing that,” she said,

Both Ministers said child poverty and child wellbeing were priority issues for their party.

Ms Humphreys defended the current system of universal payment of child benefit. “It has been in existence for a considerable length of time now. I think if you start bringing in means test into that specific payment, you’re going to have winners and losers. And that’s when the trouble really starts.”