Summer Economic Statement to outline size of Budget 2025

July 10, 2024

The Government will outline the size of the financial package for October’s budget later today, when it publishes the Summer Economic Statement.

The document sets out the Government’s medium-term budgetary strategy and the fiscal parameters around which Budget 2025 discussions between ministers will take place.

It will give details of the size of any overall increase in spending and the total cost of the tax package to be unveiled on 1 October.

The budget will be the first to be led by new Minister for Finance Jack Chambers who took over the brief just two weeks ago following the nomination of Michael McGrath to the European Commission.

A strong performance by the exchequer in the first six months of the year is likely to raise expectations of a pre-election giveaway budget.

However, last week Mr Chambers sought to downplay the prospect of this, saying the Government had made it very clear that it wants to have a very sensible and careful budgetary policy.

The Taoiseach has said the upcoming Budget will try to “balance” the need to support people during a cost of living crisis and the need for prudent fiscal spending.

Speaking on his way into Cabinet, Simon Harris rejected opposition suggestions that today’s Summer Economic Statement will be the first stage of a giveaway budget.

He said “I always wonder what that phrase means” and that “every budget” gives money away, but that he hopes autumn’s budget will “provide real and practical assistance in terms of income” for people.

The Taoiseach would not say when asked what the overall budget package will be in the Summer Economic Statement, or the tax versus spend breakdown, saying this must be agreed by Cabinet today.

The Irish Fiscal Advisory Council (IFAC), Central Bank of Ireland and Economic and Social Research Institute have all urged the Government to show restraint in the budget, so as to not risk overheating the economy.

Exchequer returns for the January to June period last week showed that the State is on course to record a surplus of €8 billion this year due to bumper tax receipts, driven in the main by windfall corporation tax returns.

However, a €1.5bn overspend already this year, driven in the main by the Department of Health being €1.1bn over budget, threatens to derail the budgetary plans.

Minister for Public Expenditure Paschal Donohoe has met a number of times with Minister for Health Stephen Donnelly to agree a plan to reign in health spending for the remainder of the year.

Economic analysts will be keen to see whether or by how much the Government plans to breach its own rule of not increasing spending by more than 5% each year.

IFAC recently highlighted that the rule is set to be repeatedly breached because of what it described as Government “fiscal gimmickry”.

It found that since the rule was introduced in 2021, breaches have added up to €8.5bn.

Article Source – Summer Economic Statement to outline size of Budget 2025 – RTE

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