As it happened: Budget 2024 brings mortgage relief and USC cuts

That brings our live coverage of Budget 2024 to a close.

Thank you for sticking with us today and be sure to come back tomorrow for our live Q&A session on the budget’s announcements with our Deputy Business Editor Dominic Coyle and Máiread Harbron from PwC from 7am Wednesday morning.

You can submit your questions for them here.

Budget 2024 has been published. Here are the key details.

• Three energy credits of €150, paid to households this winter

• Tax relief for mortgage holders on the increased mortgage interest paid in 2023, compared to 2022

• Help-to-buy scheme extended until the end of 2025

• Rent relief will increase from €500 to €750 per year

• Temporary tax relief for small landlords

• Threshold for higher income tax rate rises to €42,000

• The minimum wage increases to €12.70 per hour

• The 9% VAT rate for gas and electricity extended for 12 months

• Weekly welfare and pension payments rise by €12

• A 25% reduction in childcare from September 2024

• A double child benefit payment before Christmas

• Cost of a packet of 20 cigarettes rises 75 cents to €16.75

• A tax on e-cigarettes and vapes will be introduced next year

• Ceiling for the lower 2% USC rate goes up by €2,840, and will apply on earnings up to €25,760

• Higher USC rate applied to earnings up €70,044 will come down 0.5% to 4%

• Third-level fees cut by €1,000 for most students

• Revised bank levy planned for 2024 will raise €200 million

• ‘Future Ireland Fund’ will be created using windfall corporate tax receipts. Mr McGrath said this could grow to €100 billion by 2035

• The 2023 cost-of living package was worth €4.1 billion. The 2024 version is worth an estimated €2.7 billion

• Donohoe says Ireland’s public finances are gradually moving from “deficit to balance to surplus”

• Sinn Féin’s Pearse Doherty says tax credit for landlords will cost twice as much as measures to support tenants, while Labour leader Ivana Bacik says the proposals to fix the housing crisis are “only cosmetic”

For all budget measures, see our budget Main Points.

Best reads on Budget 2024

Budget families. What does it mean for different families

Analysis: Budget show tension between politics and economics

Analysis: New climate fund is arguably the single most important element

What’s in the budget for Ireland’s under-35s?

Analysis: Budget shows Irish politics is floating on corporate tax receipts

Pat Leahy recounts the day’s announcements:

The Government today unveiled a €14 billion spend-and-save budget that boosted permanent spending and promised large cash giveaways in the coming months.

Budget 2024 has also channeled billions in windfall tax revenues into long-term national savings and investment funds, tapped from the boom in corporate tax receipts.

With a general election due within 18 months, budget ministers, Minister for Finance Michael McGrath and Minister for Public Expenditure and Reform Paschal Donohoe, responded to intense political pressure to increase spending on both permanent allocations and on one-off giveaways.

Read the full story here.

The Garda Representative Association (GRA), who represent rank and file gardaí, gave the budget a “guarded welcome”.

Ronan Slevin, GRA general secretary, said he welcomed plans for more frontline gardaí, but expressed concern over whether targets would be met.

“In Budget 2021 we were promised 800 new recruits in 2022 and just under 300 came through Templemore and we were then promised 1,000 recruits for 2023 but we will see just over 600 which barely covers the losses through retirements and resignations,” he said.

There is still more reaction coming in, this from overseas development charity Trócaire.

Caoimhe de Barra, Trócaire chief executive, said the amount pledged to help developing countries respond to climate change did not go far enough.

“It is the world’s most marginalised people who are suffering the most due to the failure of global political leadership to act with urgency on the climate crisis and also due to decades of broken promises on overseas aid and international climate finance,” she said.

Ms de Barra said the Government needed to “urgently” do more to meet its commitment to provide €225 million a year in climate finance to developing countries.

We have more detailed analysis digging into the details of the budget from a range of Irish Times correspondents coming in.

Kevin O’Sullivan, Environment Editor, has a piece here examining the climate crisis measures, arguing plans to build up a €14 billion infrastructure, climate and nature fund could be the single most important element in Budget 2024.

Fiona Reddan runs the rule over what the tax and spending changes would mean for a range of families, from high earners, to pensioners and single parents here.

Political Correspondent Jennifer Bray details what is in the budget for people under 35 here.

Jack Horgan-Jones reports:

Minister for Finance Michael McGrath has indicated that multibillion euro packages of once off supports in the budget would play “less and less a role into the future”.

“We are in an environment where inflation has been exceptionally high, we’ve had 40 year high levels of inflation over the last year or so and that required an exceptional response from Government. You don’t get that kind of response in more normal times,” he said.

He said the budget seeks to strike the right balance between “helping people now with a whole range of cost of living measures, investment in public services and infrastructure and supporting enterprise while at the same time having a clear eye on the challenges that are coming our way”.

Minister for Public Expenditure Paschal Donohoe has said pre budget negotiations over health spending were “intense”.

“We were focusing on really large sums of money and we were trying to identify what are the risks regarding the health budget at the moment and for next year,” he said

Mr Donohoe indicated a strong belief there would be another budget before a general election, saying he anticipated he would “definitely” be back negotiating over spending for another cycle.

“There’s going to be another budget, we’re going to be back here having that negotiation and I very much hope we’ll be in a far better position with all the work we’re going to do in regard to our health budget.”

That’s it from me (Laura Slattery), but there’s more reaction and analysis of Budget 2024 to come, with Jack Power updating our live blog throughout the evening.

Reaction has also come in from the education sector, and safe to say it’s not a glowing report card.

Teacher recruitment and retention problems will worsen after a “bitterly disappointing” budget, according to the Teachers’ Union of Ireland (TUI), which says its sense so far is that the Government is “in no way serious” about tackling the crisis – an approach it says is “as baffling as it is worrying”.

The union had identified and called for an enhanced teaching allocation at second level and a restoration of posts of responsibility as key measures to tackle the crisis.

“We are still awaiting full detail, but it is bitterly disappointing that today’s budget appears to be silent on measures that would tackle the teacher recruitment and retention crisis, and as a result it is inevitable that the already dire situation in many schools will worsen,” says TUI general secretary Michael Gillespie.

“The announcement that those in the early years of second level will receive free schoolbooks is a step in the right direction, but this should have been extended to senior cycle and that those schools that utilise electronic devices should not lose out in terms of this additional funding.”

Meanwhile, INTO’s general secretary John Boyle warns that financial insolvency looms for schools.

“While today’s budget announces some extra money for schools, they will still be expected to fundraise to meet basic expenses, and parents will still be relied upon to keep schools afloat,” he says.

It also appears there will be no end to “supersized” primary school classes, INTO concludes.

The budget doesn’t go far enough to tackle homelessness, according to the Simon Communities of Ireland. It describes it as “a budget of incrementalism” when what was needed was “strident action” to address the crisis.

“The homelessness crisis is unlikely to be slowed by this Budget. The depth of the homeless and housing crisis required bold action and there’s not enough of that in this budget,” says executive director Wayne Stanley.

“The vacant housing tax increase is welcome but a dearth of ambition is simply not high enough and there seems to be too many exemptions,” he says.

“Although the tax exemptions for landlords, amounting to €50-€80 per month, serve as a gesture of appreciation for their role, it is improbable that these incentives will sway landlords who have already opted to leave the private rental market to reverse their decision. Consequently, these measures are unlikely to have a significant impact on homelessness.”

Budget 2024 provides “cold comfort” for the hundreds of thousands of people who have been frozen out of the State’s economic recovery and will leave the most vulnerable people “trailing further behind”, according to Social Justice Ireland.

The €12 increase in core social welfare rates fails to make up for the impact that inflation continues to have on poorer households, it notes – a €25 boost was the minimum required for the Government to benchmark rates to 27.5 per cent of average weekly earnings, the “modest” target set in 2007.

“This Budget fails the poorest again. They are being left behind without any hope of enjoying the fruits of Ireland’s current prosperity. There’s no attempt whatever to reduce poverty in line with the government’s own targets in the Roadmap for Social Inclusion 2021-2025.”

Although one-off measures are welcome, they are “no solution to the challenge of poverty and income adequacy”, the organisation adds.

For more details of what was announced today, Kitty Holland has a round-up of the social protection measures.

Several organisations have reacted to the childcare measures in Budget 2024.

Childhood Services Ireland, the Ibec trade association for childcare providers, has given the budget a cautious welcome, but says there is “a long way to go”.

“Significantly increasing childcare subsidies is a good start and something we called for in our pre-budget submission, but there is a long way to go for the childcare sector. Childcare is still unaffordable for many families which is impacting their opportunities to enter employment,” says Darragh Whelan, director of the Ibec-affiliated group.

“With a freeze on childcare fees in place, services are unable to offset any inflationary cost pressures, and many are really struggling in the current climate. The best way to cover costs is by improving core funding but if funding from the Budget does not go far enough, childcare services may have to pass cost on to parents which is wholly undesirable.”

Chartered Accountants Ireland has regretted that the measures do not address the significant capacity constraints within the market. Childcare must be treated as a critical infrastructure issue, says Cróna Clohissy, its tax and public policy lead.

“While a commitment was made today to address supply issues through core funding, we are asking government to recognise that childcare provision is part of the critical infrastructure necessary for a functioning economy. The crisis needs to be addressed with a long-term strategy with children at the forefront, that adequately funds the sector, increases capacity, and supports working parents,” she says.

Labour Women, meanwhile, have expressed “deep disappointment” at what it says is the Government’s continued failure to invest in early years education and care, saying political spin is being used to “distract from a paltry attempt to use subsidies to paper over the cracks”.

Simi, the Society of the Irish Motor Industry, has welcomed Budget 2024′s extension of support for electric vehicles. The VRT relief on electric vehicles, or EVs, was due to expire at the end of this year, but will now run for at least a further two years until the end of 2025.

This means EVs with a value of €40,000 will continue to pay no VRT, while the tapering relief between €40,000 and €50,000 also remains in place.

“The EV supports underline the Government’s commitment towards the electrification of the national fleet, which is of critical important as we strive to meet our emissions’ reduction goals,” says Simi director general Brian Cooke.

“We still await clarification of the ongoing investment in both the charging infrastructure and the SEAI purchase grants, which are also vital to the ongoing success of the EV project.”

Our journalists have been busy this afternoon writing reports and analysis of Budget 2024. Here are some of the stories The Irish Times has published so far:

• Jack Horgan-Jones has an updated summary of the main points
• Paul Cullen reports on the health measures, noting that the €800 million in additional core funding for the health service is the smallest increase in some time
• Kevin O’Sullivan writes that the new climate fund is a historic first
• Shauna Bowers reports on the measures for mortgage borrowers, landlords and tenants
• And Cliff Taylor’s analysis addresses the “Pandora’s box” of the mortgage interest relief scheme

Labour leader and housing spokesperson Ivana Bacik has criticised the housing measures announced by the Government, describing them as “nothing short of pathetic”.

“The paltry housing package announced by this conservative Coalition is nothing short of pathetic, and the fixes proposed are only cosmetic. Fine Gael and Fianna Fáil have caved in to the demands made by the landlords, at a time when renters are too afraid to speak out for fear of losing the roof over their head,” she says.

“This is the first Fianna Fáil Budget in over a decade, but some things never change. At a time when rents are skyrocketing, Minister McGrath announces tax breaks worth €160 million per year for landlords – without any evidence this will help to improve conditions for renters.”

Emmet Malone, work correspondent, has an update on trade union SIPTU’s reaction:

Budget 2024 will hollow out the tax base while squeezing public services, according to SIPTU, with general secretary Joe Cunningham suggesting that the Government is in danger of repeating the same mistakes made before the financial crash by hollowing out the tax base while squeezing public services.

“Through tax cuts, [the budget] is hollowing out our revenue base just as we are facing the challenges of slowing growth, climate action and technological disruption from automation and AI. This is in addition to our current infrastructural deficits such as housing,” says Mr Cunningham.

“These tax cuts are being funded by squeezing public services. By 2026, spending on public services for every man, woman and child is projected by the Government to be cut in real terms. This is despite the challenges of our ageing demographics and rising population. Rather than cutting public service expenditure, we need to increase spending.”

The traditional “people watching the budget speeches in pubs” photographs have arrived, with this one taken close to the Dáil action in Doheny & Nesbitt. Alcohol taxes were left untouched in this budget, which will be good news – presumably – for most drinkers.

The Restaurants Association of Ireland (RAI) has, however, joined those labelling Budget 2024 a “missed opportunity”, saying it has failed to deliver enough measures to support small and medium-sized food-led and hospitality businesses in the State.

“The Government needed to return food-led businesses to a 9 per cent VAT rate as our industry continues to struggle with sky high costs and razor tight margins. In failing to do so, and by letting Ireland remain at the European Union’s second-highest level VAT rate for hospitality, many restaurants, cafes and gastropubs across the country will now be forced over the edge and have to close over the coming period,” it warns.

Today is World Mental Health Day, as Paschal Donohoe mentioned in his speech when he indicated he was “ensuring increased supports across our community services through additional funding for mental health services”.

The College of Psychiatrists of Ireland was less than impressed, however, dismissing Budget 2024 as a “backward step” for the provision of mental health treatment in Ireland, and adding that the current level of funding and resourcing would lead to increased doctor burnout and negative impacts on patients.

“Regrettably, on World Mental Health Day, the Government has not delivered in this budget, and ultimately this will be seen as a backward step for the provision of mental health treatment in this country,” says Dr Lorcan Martin, president of the College.

“The College is disappointed to note that mental health funding has not increased in line with our recommendations, and meaningful connections between psychiatry and primary services have not been established.”

The Green Party has put out a statement highlighting, among other things, climate-related measures in the budget.

The new €3.1 billion Infrastructure, Climate and Nature fund, which will use windfall corporate tax profits to fund future commitments to the environment, is the “centrepiece” of the Green measures in Budget 2024, it says.

It also points to cheap transport fares through the extension of the Young Adult Leap Card for 24-year-olds and 25-year-olds, relief on VRT for electric cars and a €400 income tax benefit for householders with solar panels who sell power back to the grid.

Record funding of €380 million has been allocated for SEAI residential and community energy upgrades, including the Solar PV (photovoltaic) Scheme – this is a €24 million increase on last year. It will be supplemented by additional funding from the European Regional Development Fund (ERDF) to support next year’s programme of energy upgrades for households at risk of energy poverty.

The party also says it has secured a commitment for €3.15 billion to be made available between 2026 and 2030 in order to support climate action and nature restoration projects that are not already funded by the National Development Plan.

The National Women’s Council has responded that the cuts to childcare costs are “very welcome”, though it would have liked to see the 25 per cent reduction introduced from January rather than September 2024.

“A 50 per cent reduction in childcare fees over two budgets will make a significant difference to women and families and is very welcome and urgently needed. We must now build on this investment and move towards the delivery of a public childcare model, similar to our primary school system,” says NWC director Orla O’Connor.

One-off payments will not be enough to protect women from poverty in the long term, the council also warns, saying it is “very disappointed” overall with the package of social protection measures.

“We are particularly concerned for lone parents, the majority of whom are women,” she says.

The €12 increase in base social protection and pension rates is “simply not enough” to either protect people from the cost of living crisis or to address structural poverty and inequality.

But the council did welcome the €12 million in extra funding allocated to tackle the issue of violence against women, including funding for the new Domestic, Sexual and Gender-Based Violence Agency due to be established in January 2024.

Business group Ibec has sent in its reaction to Budget 2024, suggesting it strikes the “right balance”. The organisation welcomes the Government’s “investment ambition”, but says the success of the measures will be judged by the effectiveness of their implementation.

It also says it is awaiting the specific details of the €250 million support package for SMEs, which it describes as “critical to helping businesses navigate significant labour cost increases imposed by Government”.

It is crucial that this scheme becomes operational as quickly as possible, remains easily accessible and “serves as the starting point for a broader conversation about the transition to a Living Wage, pensions auto-enrolment and other significant labour market changes over the coming years”, according to Ibec.

Ibec chief executive Danny McCoy adds that Ibec is disappointed that the National Training Fund (NTF), which is in surplus to the tune of €1.5 billion, could not be unlocked in this budget.

“Ireland cannot afford to be complacent when it comes to education, skills, innovation and productivity,” he says.

Paul Cullen, health editor, has this interesting update for us:

The Department of Public Expenditure and Reform has been forced to delete an inaccurate Budget 2024 tweet announcing funding for new hospital beds and staff.

The tweet claimed Minister Paschal Donohoe had announced funding for over 2,500 additional beds and an increase of 22,000 staff in his Budget speech.

In fact, Mr Donohoe was referring to increases in bed numbers and health staff delivered over recent years. He made no mention of any new investment in these areas and Sinn Féin health spokesman David Cullinane said the Department has confirmed there won’t be any.

Mr Cullinane described the post, which was later deleted, as “very disingenuous and misleading”.

Screen Ireland / Fís Éireann, the development agency for the Irish screen industry, has welcomed the increase in the cap for qualifying expenditure under the Section 481 tax credit from €70 million to €125 million.

“In a landscape where global film and TV production budgets have reached an all-time high, the increase in the eligible expenditure cap will allow Ireland to attract a wider range of high-quality, larger scale production. It will also create opportunities in the growing area of VFX and post-production, whilst maintaining our well-regarded global reputation,” says Susan Bergin, who chairs Screen Ireland.

Screen Producers Ireland was also quick off the mark earlier welcoming the increase in the cap, describing it as a “real sign of confidence, and support for, the Irish film and television production sector”.

The tax credit is essential to Ireland’s production landscape, the producers’ organisation notes, and this higher expenditure cap will allow production companies to better compete internationally to bring higher budget international productions to the State.

“This will have the positive effect of increasing the potential amount of investment into the sector, growing high-value employment in the sector, improve overall economic benefit to the economy and supports Government’s ambition to double employment in the screen sector by 2028,” says Susan Kirby, chief executive of Screen Producers Ireland.

Reaction to the contents of Budget 2024 is now starting to pour in from various business sectors. Let’s start with this one from Marian Finnegan of property agents Sherry Fitzgerald.

While some measures such as the extension of the “crucial” help-to-buy scheme until the end of 2025 is welcome, the budget is a “missed opportunity” to address the emergency in the rental market, she says.

“The failure to introduce any serious policies to combat the systematic problems in the rental sector is a missed opportunity and very disheartening. The number of properties available to rent has fallen significantly in recent years with private investors abandoning the buy-to-let market. For much of the past decade, for every single investor buying into the market, two are exiting, which will result in a loss of 15,000 tenancies this year alone,” Ms Finnegan says.

“The introduction of a tax credit to landlords which sounds very positive, only equates to a saving of between €600 to €1,000, which will do little to encourage small landlords to stay in the market.”

She adds that the increase in the tax credit for renters to €750, representing as it does just over 4 per cent of the average annual rent in Ireland, will have a limited impact on affordability and fails to address the crux of the problem: lack of supply.

Jennifer Bray, political correspondent, writes:

Holding neither of the finance portfolios, the Greens can often feel a little left out of the hype around the budget. But have they managed to exert their influence on the budget?

To a certain extent, yes.

The creation of a €3 billion State fund to invest in climate and nature projects has been described by Green Party ministers and TDs as “one of the most important and far-sighted decisions of any Irish Government ever”.

The Government has agreed to use windfall corporation tax profits to establish a fund that will allow the State to continue building vital infrastructure in the event of another downturn. As part of this fund €3.15 billion will be made available between 2026 and 2030 specifically to pay for climate action measures, which is a major chunk of change.

Another policy win is the further expansion of the 20 per cent reduction in public transport fees until the end of 2024.

Minister for Public Expenditure Paschal Donohoe sat down and commended the budget to the house at 14.40pm, with Sinn Féin finance spokesman Pearse Doherty getting to his feet a minute later to lead the Opposition reaction.

Fine Gael and Fianna Fáil caused the housing crisis and they are not the ones to fix it, he begins. We needed a budget for renters, he says, but instead we got one for landlords.

More of the political reaction from our political correspondents later.

Jack Power writes:

In an effort to stem the flow of foster carers leaving the system, which has put pressure on Tusla and the care system, the foster carer allowance has been increased for the first time since 2009.

The Government is to increase the weekly rate paid to foster carers by €75 for children up to 12 years of age, and €73 for children over 12.

The increase – which Minister for Children Roderic O’Gorman had committed to try to secure – follows a sustained campaign by foster carers, who had complained that the allowance had not kept pace with cost of living increases.

Jennifer Bray, political correspondent, writes:

So what is in Budget 2024 for young people?

As mentioned, student grants will increase by €300 from January.

More young people will also qualify for cheaper public transport fares under Budget changes. The change will see 24-year-olds and 25-year-olds becoming eligible for the Young Adult Card for the first time. The card allows half-price fares on public transport and with participating commercial operators.

Jennifer Bray writes:

It’s good news for parents in Budget 2024 – although cuts to childcare costs will only kick in much later in the year.

• There will be a double payment of child benefit before the end of the year
• There will be a €4 increase in the weekly welfare rate for a qualified child
• Child benefit will also be extended to 18-year-olds who are still in full-time education
• On the tax side, there will be a €100 increase in the single person child carer credit
• In schools, the free school book scheme will be extended to secondary schools, for those on the junior cycle. Fees will be waived for school State exams next year
• On childcare, there will another 25 per cent cut on costs – but not until next September, when the hourly subsidy will be increased from €1.40 to €2.14
• There will be increases to the Student Universal Support Ireland (SUSI) grants which would benefit over 50,000 students from January
• Payments will increase by over €300, meaning the highest student grant will rise from €6,971 to €7,313. Postgraduate students are also in line for grant support of up to €2,300

Jennifer Bray writes:

So, what are the one-off supports?

There is, as expected, a multibillion euro package of one-off cost-of-living supports. This is made up of the following:

• Three €150 energy credits. One will be delivered before Christmas, the other two in early 2024
• A €300 lump sum payment for 370,000 people in receipt of the fuel allowance. This will be given before Christmas
• A €200 lump sum payment for those in receipt of the living-alone allowance, delivered this winter
• A double payment for those in receipt of child benefit, delivered this winter
• A Christmas bonus for welfare recipients and also another double week in January
• A double payment for those on the foster-carer allowance, to be given this winter
• Those in receipt of the carer’s support grant, the disability allowance, the blind pension, the invalidity pension and domiciliary care allowance will also receipt a €400 lump sum this winter

Beyond this, in the normal social protection package, the Government will spend more than €1.3 billion.

There will be, as has been widely flagged, a €12 increase in weekly payments for pensions and those in receipt of weekly welfare payments.

The mortgage interest-relief scheme is set to benefit people who are paying more in interest this year than last – in other words borrowers on variable and tracker mortgages who didn’t fix their rate ahead of the European Central Bank’s anticipated cycle of rate hikes.

But this raises questions of fairness, as Cliff Taylor explains.

He writes:

“There will surely be controversy about who does and does not qualify for the mortgage interest-relief scheme. As things stand, it benefits those whose interest bill is higher in 2023 than in 2022. But what happens if you are, say, coming off a fixed rate in early 2024?”

Conor Gallagher writes:

There was a strong Garda presence but no sign of any protests around Leinster House as the budget announcement got under way in the Dáil on Tuesday afternoon.

Fears of a repeat of the intimidatory far-right demonstration that took place on the opening day of the Dáil term last month have so far proven to be unfounded.

Gardaí have established what one-senior officer called a “mini-sterile zone” around the building with access to the surrounding streets limited to Leinster House staff and politicians.

Kildare Street has been closed to traffic and pedestrians on both ends, as has Merrion Street on the other side of Leinster House. Most of Molesworth Street, which leads up to Leinster House, has also been closed off by two lines of barriers.

Gardaí have erected 6ft metal barriers around the entrance to the building and various command-and-control and public-order vehicles were present.

Earlier in the day, Commissioner Drew Harris toured the fortifications with Leinster House security staff.

Gardaí in specialist units had been monitoring far-right social media channels for any indication of a large-scale gathering being organised for Tuesday.

Around 200 gardaí have been assigned to guard the building, including uniformed units, plain-clothes personnel. public-order gardaí, roads policing units and the Garda Dog Unit.

A number of military police are also on duty within the complex as is normal.

“There is a constitutional right to the freedom of assembly and freedom of speech, subject to statutory provisions,” a Garda spokesman said.

He said the freedom to protest extends to some level of disruption or obstruction to footpaths and roads “provided it is reasonable and proportionate, and limited in its extent and duration.

“An Garda Síochána is obliged to respect the right for all citizens to exercise their constitutional rights.”

He said the Garda response to protests will be based on “a graduated policing response taking into account relevant legislation and public safety”.

The road closures are due to last until 2am on Wednesday. Gardaí warned additional road closures may take place if required.

Jennifer Bray, political correspondent, writes:

For months, Opposition parties have been calling for reform of the bank levy as bank profits soar, at a time when homeowners have been hit by a raft of interest rate hikes.

The Government has announced the bank levy will be extended and revised. They say they will take in €200 million from the banks.

The Minister has commended his budget to the house. Now it’s time for Paschal Donohoe, giving his first budget day speech as Minister for Public Expenditure, National Development Plan Delivery and Reform.

More from Jennifer Bray:

The cost-of-living package is a major focus of the Budget 2024. Starting with electricity and gas bills, there are two main elements.

The 9 per cent reduced VAT rate for gas and electricity will be extended for another 12 months. This is a €90 saving in terms of electricity costs, or €62 on gas across the 12 months. The Irish Times has already reported there will be three electricity credits off people’s bills. They will be worth €450 and will come in three tranches of €150.

For motorists, the following is relevant. The final tranche of fuel excise increases, due to go ahead on October 31st, will be deferred until next April.

Other details confirmed so far:

• The minimum wage will increase to €12.70 per hour. This is an increase of €1.40 per hour
• The 9 per cent VAT rate for gas and electricity will be extended for 12 months
• The rent relief will increase from €500 to €750 per year and will be backed by an information campaign
• The help-to-buy scheme is being extended to 2025 and Government will consider next year if any changes are needed to that
• A temporary tax relief to benefit small landlords will be introduced to help keep rental properties in the market. Relief can be claimed from 2024 to 2028, but a landlord’s property must remain in the market until 2028
• The research and development tax credit rate will increase from 25 per cent to 30 per cent
• The project cap for the Section 481 film and television tax credit has been increased from €70 million to €125 million
• Audiobooks will be zero-rated for VAT from January 1st, 2024

Jennifer Bray writes:

Finally we have some detail on how the new scheme for mortgage holders will work, which will apply to those hit by interest hikes.

Minister for Finance Michael McGrath said the mortgage interest tax-relief scheme will last for only a year. It will apply to homeowners with an outstanding mortgage balance on their house of between €80,000 and €500,000 as of December 31st, 2022.

The relief will be made available on the increased interest paid on the mortgage in the calendar year of 2023 compared with that paid in 2022. It will be capped at €1,250. The Government estimates around 165,000 mortgage holders will benefit and that it will cost €125 million.

On the face of it, it looks like a more expansive scheme than had previously been flagged.

Jennifer Bray writes:

The income tax package is slightly larger than had been expected, with €1.3 billion now being put aside. As expected, the rate at which people pay the higher rate of tax is going up. The standard rate income tax cut off point is increasing by €2,000 so people will now only pay the higher rate of tax at €42,000.

The 4.5 per cent universal social charge (USC) rate is also being cut to 4 per cent, the first reduction in USC rates in five years. As of January 1st, the national minimum wage will increase by €1.40 per hour to €12.70 per hour.

A big outstanding question was around what the Government would do with the rent tax credit, which was worth €500. This will now increase to €750. Parents who pay for their student children with tenancies will now also be allowed to claim the credit.

Jennifer Bray writes:

Minister for Finance Michael McGrath has been sounding a note of warning as he set out the parameters of Budget 2024. He noted the budget is framed against the backdrop of global uncertainty. The outlook has deteriorated, he said.

Mr McGrath said his department is forecasting that tax revenue will reach €88.3 billion this year. “For the first time in a number of years, this is a downward revision for 2023 compared to earlier expectations.”

That is largely because of lower-than-expected corporation tax receipts, which fell during the summer.

The Dáil chamber is filling up and the two Ministers have taken their seats, with the Ceann Comhairle kicking off proceedings with the formalities.

Mr McGrath begins: “By any measure, Ireland is a modern, successful country, but we know we can do better, and we will.”

He confirms the establishment of a Future Ireland Fund, with potential to grow to more than €100 billion by the middle of the next decade, and a €14 billion Infrastructure, Climate and Nature Fund.

Paul Cullen, our health editor, informs us that Minister for Public Expenditure Paschal Donohoe is set to announce the creation of a “health resilience fund” in his Budget 2024 speech shortly. Apparently, this is to help the health service manage inflation and rising demand, but it will not be used to cover this year’s massive deficit. A “substantial” increase in overall health funding is promised.

Paul has written about out-of-control health spending, which has generated a substantial portion of pre-budget tensions here.

“If health spending were an organism, it would be a flesh-eating bug, consuming all before it and threatening to gobble up any spare resources available to Government,” he writes.

One pre-budget survey has suggested the Government has already done such a good job of managing expectations that a significant proportion of the population, as of last week, didn’t really have any.

A survey by market intelligence company iReach Insights found only 19 per cent of adults expect Budget 2024 to have a positive effect, 25 per cent anticipate it will have a negative effect and 17 per cent don’t think it will have any impact at all. The rest were sensibly waiting for the announcement to decide.

Rather dismally, few people expect to see any improvements in the housing and homelessness crises in 2024, the same survey also found.

On housing, only 9 per cent believe the crisis will ease in 2024, with 49 per cent expecting it to get worse. On homelessness, only 8 per cent expect an improvement next year, with 55 per cent of people surveyed saying they think it will get worse.

Hello, I’m Laura Slattery, taking over the live blog from Conor Pope for the next few hours. This year, one of the key words during pre-budget season has been “balance”. The Government wants to alleviate the financial pressures on households – and get the credit for doing so – without over-stimulating the economy to the extent that prices keep rising.

This same concern also surfaced last year, of course, when Paschal Donohoe announced what was his sixth budget: “In drafting Budget 2023, Government has a responsibility to strike a delicate balance between helping with the cost-of-living pressures but, on the other hand, not making them worse by adding fuel to the inflationary fire.”

If he wanted to, Michael McGrath could probably just copy and paste that sentence out of Donohoe’s speech, updating “2023″ to “2024″.

Save the corporation tax windfall or spend it? The Minister for Finance said last month he was confident he and Donohoe would “get this balance right”, taking advantage of the excess receipts to address infrastructural bottlenecks, without using temporary bonanzas to fund permanent spending.

Ahead of the speeches, Jack Horgan-Jones has a rundown of the main points we can expect to see this afternoon.

They include:

• A tax package worth around €800 to individual workers. Personal, PAYE and earned income tax credits will increase by €100 to €1,875, while the standard rate band – the level at which earners begin to pay the higher rate of income tax – will go up by €2,000 to €42,000.
• Three energy credits of €150 each, paid to households this winter.
• An across-the-board permanent increase to weekly welfare and pension payments of €12 as well as a range of lump sum payments.
• A further 25 per cent reduction in the cost of childcare from September 2024. There will also be a double child benefit payment of €280 per child that will be paid before Christmas.
• Our political team has also confirmed the previously flagged move to pay child benefit to parents of 18-year-olds still in full time education.
• No increase in the duty on beer or wine, but a packet of cigarettes will go up by 75 cent rather than the anticipated 50 cent.
• About 160,000 households stand to benefit from a once-off mortgage-interest-relief measure. The scheme will give 20 per cent tax relief on the increased amount of interest paid in 2022 compared to the calendar year 2023, capped at €1,250 per property.
• The rental tax credit is to be increased from €500 to €750. Landlords will benefit from a tax break worth between €600 and €1,000, rising every year they stay in the market up to 2027.

Best budget reads

• Package to see big spending increases and tax cuts for middle-income earners
• Gardaí prepare ‘mini sterile zone’ around Leinster House for budget day
• Major new investment funds to be announced in budget
• A renter, a landlord and a teacher set out their budget wish list: ‘We are the squeezed middle’
• Our golden era in public finances is ending, but what will we have to show for it?
• The table, the couch and the art of pulling a budget together
• How to cut through the spin and spot the real changes
• Ask the Experts: Do you have a budget query for our in-house experts? Submit it here and check back on Wednesday when Dominic Coyle (Irish Times) and Máiread Harbron (PwC) will be answering your queries live from 7am

Actually – and channelling my inner Columbo (ask your parents, kids) – I have just one more thing and its from our Political Correspondent Cormac McQuinn. He’s just sent this in.

Opposition politicians took to the Leinster House plinth in the last while to criticise the expected measures in the budget.

Richard Boyd Barrett argued the Government is trying to “dazzle” people with a series of once-off measures: “to make it look as if they’re taking seriously the need to address the cost-of-living and housing crisis”.

He said his party will be saying that once-off measures “are utterly inadequate to deal with the extraordinarily high levels of hardship, poverty and deprivation that people are suffering as a result of the cost-of-living crisis”.

Mr Boyd Barrett said: “once-off measures simply don’t address it because the increases that they’re giving in social welfare, pensions, for carers ... are far less than the actual level of inflation.”

He said the Government should be targeting “profiteering” by energy companies and banks that have benefited from cost-of-living hikes.

Social Democrats TD Róisín Shortall said there are three areas her party is “particularly concerned” about on the basis of what is known about the expected budget package.

She said the first is support for people with disabilities. “We are proposing a disability payment of €30 a week and I haven’t heard Government talking about that,” she said.

The second is the level of welfare payment increases and pensions in particular.

Ms Shortall said: “Pensions are falling very far short of inflation and we are very concerned to hear that the Government is talking about a figure something in the region of €12 per week.

“In order to keep pace with inflation, the weekly increase needs to be at least €25-per-week.”

The third area is the question of child poverty.

Ms Shortall noted Taoiseach Leo Varadkar had set up a unit aimed at tackling child poverty in his department and it is time to hear what it is going to do.

Her party colleague Jennifer Whitmore welcomed the anticipated 25 per cent cut in childcare costs but said it must be provided “immediately”.

The indications are that unlike this year’s 25 per cent cut, which began from January, next year’s cut will not kick in until the later part of 2024.

Ms Whitmore criticised this, saying: “It cannot be the case that that 25 per cent cut doesn’t hit parents’ pockets until September or November next year.”

I am off now to get ready for the speeches but the day is long, and we are only getting started and all your Live Story needs for the next few hours will be taken care of by Laura Slattery.

And this has just landed from our Economics Correspondent Eoin Burke-Kennedy.

Some eye-watering figures coming out of the Department of Finance in terms of how much money we’ll have in a relatively short period of time from the two funds being planned for the windfall corporate tax receipts.

The headline numbers are under embargo until Michael McGrath announces them during his budget speech, but department officials have given a background briefing to journalists this morning.

The first, and by far the largest, fund will be used to deal with the costs associated with an ageing population – health and pensions basically. The second – the Infrastructure, Climate and Nature Fund – will be used to buttress capital spending and help with the climate transition and will be capped at €14 billion.

As my colleague Cliff Taylor reported this morning, both funds will be put on a statutory footing, meaning governments will be compelled by law to divert funds into them.

Another fresh line from Jack Horgan-Jones.

A reduced Capital Gains Tax (CGT) rate of 10 per cent on gains arising from the disposal of qualifying assets was introduced in 2015 – eligibility for this is expected to be broadened so that angel investors, typically high-net-worth individuals, can benefit from reduced CGT.

Free contraception is being made available to women aged 31 next year as part of health reforms in Budget 2024, according to Health Editor Paul Cullen.

The amount of funding available in the budget for new developments in health is extremely limited due to heavy overspending in the sector this year, and the sector is expected to require a supplementary budget this year of at least €1.1 billion.

However, free contraception, currently available to 17- to 30-year-olds, is being extended to 31-year-olds.

Six new surgical hubs will be opened and staffed, and child and adolescent mental health teams are being expanded, The Irish Times understands.

There will also be more funding for digital health initiatives to tackle waiting lists. Core funding is being increased and a new health resilience fund is being created.

Just a quick note re timings for the rest of the day. Minister for Finance Michael McGrath will begin his budget speech in the Dáil at 1pm followed by Minister for Public Expenditure Paschal Donohoe at 1.45pm. Opposition replies will run from 2.30pm. And throughout the afternoon there will be department-specific briefings from Ministers as well as reaction from lobby groups and other interested parties.

Some serious-looking barriers up outside Government Buildings this morning

The timing of budgets in recent years has been all over the shop. In the 1970s and 1980s budget day was in February when there was a grand stretch in the evenings. Then during the Celtic Tiger era it moved to December. That was grand when every budget was a giveaway – then the crash came bringing austerity with it. Not wanting to be the villain in a Dickens story, the Government moved the budgets to October. And then back to September last year. And now we are back in October again.

‘We should have another budget before the election’

There should be one more budget before the next general election, Green Party leader Eamon Ryan has said.

Mr Ryan denied today’s budget will be the start of the next election campaign, saying polling day should not take place until March 2025.

The leader of the smallest party in the Coalition said the package to be unveiled later today is a “green budget”.

He said preparations were “difficult” as a balance has to be struck in terms of protecting the economy and not triggering more inflation while protecting people at a time of high inflation and investing in the future.

Asked by reporters if the budget would be more green than previous years he said: “I think you have to be careful about ‘oh we have this, that or the other in the budget’ but it is a green budget.

“This is a green Government and particularly looking to the future, to put aside some of the money we have now in corporate tax profits and to invest it in the future for all our needs, I think that’s a really strong signal of the strength of the Green Party in this Government.”

On the timing of the next general election he said: “I think we should have another budget before the election, and the election could and should be in March 2025. I think we need to be doing our work and delivering for the Irish people.

“We’ll have a local and European election in June. That’s the first most important election and then general election after that, as I said, I hope in March ‘25.”

Asked if his party will be pleased with the green measures in the budget he said: “I think it’s more important that we’re happy with the overall budget.

“And you have to compromise – you don’t get everything your own way.

“You have to agree to measures that you wouldn’t prefer but the balance is what’s important and I’m confident that our party will be supportive of the budget.”

Martin promises to ‘invest strongly’ in childcare and education

Tánaiste Micheál Martin said the “world is not in a good place” and the budget will reflect the global situation.

The Minister for Foreign Affairs said this makes economic forecasting and planning difficult so it makes sense the Government will be putting resources aside for investment funds for the future.

He said: “apart from that I think the cost of living is something that has impacted on people so we’re anxious to try and help people deal with that as best we can”.

Mr Martin made particular reference to housing measures in his pre-Cabinet remarks to reporters, saying the Government wants to “maintain momentum” in the area.

Fianna Fáil holds the housing brief in the Coalition, and its Minister, Darragh O’Brien, is tasked with ramping up supply to ease the current crisis.

Mr Martin said the budget will “primarily” help people with the cost of living.

“In addition to that, we’re anxious to maintain momentum on housing, to keep supply going and also to keep ... more houses in the rental market but also to give a break for renters.”

He said there will be capital funding for housing “across the board and the finances available ... will keep the momentum going. We are exceeding targets. Last year’s targets were exceeded.

“We’re going well this year in terms of commencements, but of course we need to get house-building up even more significantly for the future both on social housing and on affordable housing.”

Mr Martin also highlighted plans to “invest strongly” in education and childcare as well as to set up investment funds for the future.

Good morning and welcome to our Budget 2024 coverage. I’m Conor Pope. We will be running this live story throughout the day so you can consider it your one-stop budget shop. But first, here are some of our top budget reads from today.

So, what do we know now? Quite a bit as it happens, thanks mainly to our hard-working political reporters who have been assiduously mining various seams of news to extract nuggets of information for many weeks.

Here are some of the things you can expect to be announced later today.

• There will be a mortgage tax break worth up to €1,250 for homeowners. It will be on the table to those with a home loan of between €80,000 and €500,000 at the end of last year. Those who qualify will get 20 per cent relief on the increased amount of interest paid on their mortgage between 2022 and 2023.
• As it stands people start paying tax at the top 40 per cent rate once they earn €40,000. The ceiling is to be raised to €42,000.
• There is likely to be three energy credits of €150 each – one before Christmas and two after it.
• There will be a double payment of child benefit before Christmas, and a double welfare payment after Christmas.
• All social welfare payments are to rise by €12 a week.
• The budget will also include the establishment of new savings funds where excess corporation tax revenues will be lodged.
• The tax credit for renters is likely to climb from the current €500 to maybe €800.
• The free schoolbooks scheme is to be extended to students in the first three years of secondary school.
• Government sources say there is agreement to reduce childcare fees by another 25 per cent but that it would occur “later” in 2024.
• There was a time when the old reliables were made up of booze, fags and petrol. In recent years, however, the old reliables have become the old reliable, with tobacco the only one of the cash-cow trio hit by higher taxes. It looks like it will be the same again this year with 50 cent likely to be added to the price of a packet of 20 cigarettes.

Before we get into the meat of the story, we thought you might like a history lesson that you can lean on to impress your friends as the day drags on.

The word budget as we use it today was most likely coined in a satirical cartoon of the-then British prime minister and chancellor of the exchequer Robert Walpole in 1733. After he published details of Britain’s finances, a cartoon in a satirical magazine featured him opening a bag of snake oils under the not entirely hilarious caption: “The Budget Opened”.

And what was a budget? We’re glad you asked. In middle English and old French a budge was a small suitcase – it is part of the reason ministers still carry a briefcase into the Dáil on budget day.

More from Government Buildings where the Cabinet is meeting to sign off on the budget.

According to Cormac McQuinn, the Taoiseach Leo Varadkar has told reporters it will have a “significant” income tax package, measures to help with the cost of living and a focus on reducing child poverty.

According to the Fine Gael leader, there will be “mainly good news” announced later this afternoon, in what he says will be probably the second-biggest budget package he has been involved in during 13 years in government.

“There’ll be a significant income tax and USC package reducing the amount of income tax people have to pay, help with the cost of living in the run-up to Christmas and also afterwards particularly with a focus on energy bills.

“There’ll be help for small business and farmers and also a social welfare package put together by minister [Heather] Humphreys and that will involve help for pensioners, help for people in receipt of social welfare payments but also a particular focus on children and families and making it easier to raise a family and crucially helping to reduce child poverty as well.”

Mr Varadkar said the budget will be “a little bit different to last year because inflation is moderating.

“But notwithstanding that prices are still high and rising and that’s why there’s a particular focus on the cost of living and making sure that you have more money in your pocket and that what money you have goes farther.”

Mr Varadkar rejected a suggestion the planned tax cuts will benefit people on higher incomes most.

“That’s not the case ... the income tax package which minister [Michael] McGrath will announce the detail of later involves increases in tax credits, reductions in the USC and also reductions in income tax so that will benefit pretty much all workers.”

He also said: “The nature of the tax system is that middle-income and higher-income people pay the most income tax so therefore any income tax package is going to benefit middle-income people and more affluent people more.

“But that’s why you have to see the budget in the round, and there will be other measures – for example, around the cost of living, around social welfare and around the cost of childcare and the cost of school and college. They will benefit everyone. People who aren’t working for example will benefit a lot from them.”

By historical standards a ‘big budget’

And we have news just in from Political Correspondent Cormac McQuinn.

Minister for Public Expenditure Paschal Donohoe was not giving much away when asked by reporters this morning if there will be any surprises announced this afternoon, but he did promise a “big budget” by historical standards.

On his way into Cabinet he said: “Every budget announcement will always contain some elements to it that might not be expected. But I think by this point all the key features now have been well flagged.

“It’s a budget that will be bringing forward further support to help with the cost of living.

“In addition to that we will be continuing to invest more in really important public services, but crucially we’re going to be doing all that while making really important decisions with regard to our public finances.”

Asked if it would be more conservative than previous budgets he replied: “Any budget that contains this degree of spending could hardly be described as conservative. But it is a different budget to what we delivered a year ago.

“The amount of growth in day-to-day public spending is at a lower pace than the budget that was brought forward last year,” he said. n

“And also the one-off measures that we have brought forward have been changed to reflect the fact that while inflation is still present in all of our lives it is growing at a slower pace than it did a year ago.

“So the budget is of a different scale but it is still by historical standards a big budget.”

He also said Minister for Finance Michael McGrath is bringing forward “a very, very well-balanced set of proposals with regard to taxation”.

Mr Donohoe added: “The biggest benefit that will be delivered due to the change in Universal Social Charge (USC) will be on those who are on low to middle incomes.”

The Green Party has secured Government agreement to create “a €3 billion war chest” to invest in climate and nature restoration projects over the remainder of the decade, writes Environment and Science Editor Kevin O’Sullivan.

The strategic fund is one of the first of its kind in the world and means investment in crucial environmental projects will be prioritised in years to come. The total €3.15bn allocation is in addition to funding already earmarked for climate and nature in the National Development Plan.

Although the exact projects that will be funded have not yet been decided, it is expected the focus will be on projects that help cut Ireland’s use of fossil fuels; make public and private buildings stock more energy efficient; restore natural habitats; and improve water quality in rivers and lakes.

It is understood it will also be used for a large number of projects in the Government’s climate plan, notably retrofitting; district heating; supports for farmers who undertake nature protection; and supports for decarbonisation of businesses.

The investment, the Government believes, makes sense from an economic and business point of view as it will position Ireland at the forefront of the new green economy.

A failure to invest sufficiently in climate action and nature restoration could also leave Ireland open to billions of euro in EU fines over coming years. This, in effect, would see the Republic subsidising other EU countries to carry out the same work and reap the rewards themselves.

It’s not just leaks of course. There are also kites. The flying of kites is now as much a pre-budget ritual as the waving of a suitcase on the steps of Leinster House. And before you ask, no we have no idea what is going to be in Michael McGrath’s briefcase today – but we do have an interesting fact about the case that we will hold back for now.

Kites work like this. A Minister or his people will have a quiet word with a reporter about a plan they might have – trebling the price of a pint say (don’t worry, that is NOT on the table).

Then the reporter will splash with the news that the Government is planning to triple the price of a pint. The public will either react with fury – in which case the kite will be quickly lowered – or with a shrug of the collective shoulders and the kite will stay in the air, possibly becoming a policy.

So, how do we know so much about what is going to be in the budget this year? And was it always like this? The answer to the second part of your question – actually, it’s not your question, it’s our question but anyways – is a resolute no.

The annual budget used to be one of the most closely guarded secrets in Irish – and indeed in world – politics. In the late 1940s, then British chancellor of the exchequer Hugh Dalton was forced to resign after making a casual remark about his budget plans to a journalist that then found its way into the evening papers minutes before he delivered his speech to the House of Commons.

Can you imagine if the same rules applied today? There’d not be a Minister left in Dáil Éireann today.

In an Irish context, for donkey’s years, the budget plans of the minister for finance was as tightly guarded a secret as the Third Secret of Fatima. Leaks were a sackable offence. Then Fianna Fáil started releasing – slightly secretly – the top lines of the budget to the evening newspapers on the day of publication. It slowly became a free-for-all and these days almost every line in the budget is flagged well in advance.

This is how our Budget coverage is shaping up both online and in print.

Jack Horgan Jones has some more detail on the social welfare changes we can expect.

There will be a double lump sum Child Benefit: €280

Social welfare recipients can expect a Christmas Bonus and a January Bonus.

And here are some more figures.

• €200 on Living Alone Allowance
• €400 Carers Support Grant
• €400 Disability Support Grant
• €400 working family payment
• €300 Fuel Allowance payment
• €100 Qualified Child Bonus

Mortgage payers whose repayments have soared with European Central Bank rate rises will receive tax relief of up to €1,250 as part of Tuesday’s multibillion euro giveaway budget, writes Political Editor Pat Leahy.

There will also be a €12 a week increase in basic welfare rates – far less than that sought by campaigners; tax cuts targeted at middle-income earners; big spending increases across all Government departments; a package of once-off payments including a double month of child benefit before Christmas, a double welfare payment in the new year and three energy credits worth €450; help for small businesses; and further cuts to the cost of childcare next year.

New funds for climate action, infrastructure and long-term savings will also be part of a huge spend-and-save budget to be unveiled by the Government. A proposal was also being considered that would see landlords get tax breaks worth €600, rising to €1,000 over time if they stay in the market.

All told, the Coalition will announce a pre-election budget with spending increases and tax cuts worth more than €9 billion that gives almost €2.5 billion in cash back to voters in the coming months.

Elsewhere, Government leaders were closing in on a package that would see a €100 increase in personal, PAYE and earned income tax credits; an increase in the ceiling for the 2 per cent USC rate to €25,760; and the 4.5 per USC rate cut to 4 per cent. The threshold for paying the higher rate of tax is set to be raised by €2,000 to €42,000.

In terms of our coverage over the day we will of course be covering the speeches from Minister for Finance Michael McGrath and Minister for Public Expenditure Paschal Donohoe in the early afternoon and also the speeches from the Opposition in response. These start at 1pm.

We’ll also gather all the changes into a comprehensive main points, political reaction and reaction from other interested parties. In short, we will aim to have the story covered from all the angles that you could possibly imagine – and maybe some you haven’t even thought of yet.

Stay with us, it’s going to be a long enough day but – fingers crossed – we might all be a bit better off by the time the curtain comes down on our coverage this evening.