Changes to personal taxation to be ‘central’ part of Budget – McGrath

October 4, 2023

The Minister for Finance has said that changes to personal taxation will be a “central element” of a just over €1.1 billion tax package that will form part of next week’s Budget.

“While there are a number of different priorities I want to address as part of that, the central element of the tax package will be changes to personal taxation and that can involve a combination of issues around our income tax system and Universal Social Charge,” Michael McGrath said.

He was speaking on his way into Cabinet today.

“No final decision has been made yet, but the key thing is to ensure a fair distribution and spread of the benefit of the reductions in personal taxation so that low and middle-income workers get a fair deal when we distribute those reductions in income tax,” he added.

He also outlined what he described as four “key priority areas” within the Budget.

Mr McGrath said that “helping people with the cost of living” was the Government’s “top priority”, and that other priority areas included increasing the supply of homes “of all types across Ireland”, and ensuring the enterprise sector remains competitive.

He said: “We know that day-to-day costs remain really high for households all over Ireland, so we will do the very best we can with the resources we have available to help.

“That is a key priority alongside providing homes for people.

“So doing all that we can to continue to increase the supply of homes of all types across Ireland.

“And another priority for me and for the Government will be the enterprise sector to make sure that we remain competitive into the future, that we are an attractive location for start-up businesses and businesses that want to scale up because the resources we get from the enterprise sector enable us to invest in society and in services.

“And finally, the providing for the future because we have a window of opportunity now with the strong corporation tax receipts that we have been collecting but it is a window that is closing and we do have to make provision for the increased costs that are coming our way really quickly over the coming years.”

Mr McGrath also said that “intense discussions are under way in relation to the health budget at the moment”, adding that “alongside social protection it is the largest budget across Government and so any significant overrun in health can have an impact in other areas”.

Mr McGrath said he recognised that there were “growing demands on our health service” and that there “are reasons why health spending has been high”.

However, he said: “It is important that it is managed with discipline and that we minimise any impact across all other parts of Government”.

Opposition parties this morning voiced concern though that increases to weekly welfare payments and the State Pension will not go far enough.

Labour’s Ged Nash said there must be “inflation busting” social welfare increases, while People Before Profit TD Richard Boyd Barrett said welfare and pension payments must rise to €300 a week.

Honest conversation needed about health spending – Donnelly

Also speaking on his way into Cabinet this morning, Minister for Health Stephen Donnelly said that “an honest conversation” was needed around healthcare spending, and indeed health overspending.

In relation to overspending, Mr Donnelly said that this was due to three factors.

He said: “One part is a level of spending in the hospitals that needs to be much better controlled.”

“The second part is inflation … and the third part is demand.

“We have more people coming into our hospitals and coming into our services than before, so an honest appraisal would say that more people being treated by our health service requires more funding.

“So we need to provision for the reality of healthcare, we need to provision for how much healthcare actually costs, we need to provision for the number of people who use our healthcare services whilst being deadly serious about better controls around hospital spending where there is a level of spending that is happening that should not be happening.”

Mr Donnelly said that he and the HSE Chief Executive were “at one on the need for better controls within the hospitals”.

The minister said he was meeting the Chair of the HSE Board Ciarán Devane later today “to have exactly this conversation”.

In terms of the overall health budget, Mr Donnelly said that he made “no apologies and this Government makes no apologies for a significant investment in health care over the past three years”, which he said followed years of underinvestment.

Work to begin on public sector pay next week – Varadkar

Taoiseach Leo Varadkar has said that work on a new public sector wage deal will begin immediately after the Budget is announced next Tuesday.

Speaking at a Government news conference this afternoon, the Taoiseach said that Ireland had comparatively few strike days in comparison to the UK, France and the US.

“One of the first things Minister Donohoe will do once the Budget is announced on Tuesday will be to get working on the next public sector pay deal because the current one expires with the recent set of pay increases in October.”

Mr Varadkar said public servants, gardaí, nurses and Defence Forces members required further pay increases due to the high cost of living.

He added that Minister for Enterprise Simon Coveney will be seeking an increase in minimum wage which will be “particularly important” for those in the private sector.

Changes to personal taxation to be ‘central’ part of Budget – McGrath

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