Leo Varadkar Warns of Reduced Measures to Offset Rising Prices in Upcoming Budget
Irish Taoiseach Leo Varadkar has cautioned the public that they should not expect the same level of one-off measures to counter rising prices in the upcoming Budget as were announced last year. Despite the ongoing cost of living crisis, Varadkar emphasized that inflation had moderated over the past year, with wage increases across the economy helping to alleviate some of the effects of rising prices.
Speaking at a Fine Gael enterprise conference in Waterford, Varadkar acknowledged the increase in prices in essential areas such as groceries, fuel, home loans, and health insurance, as well as the considerably higher energy prices compared to two years ago. However, he noted that inflation was currently at roughly half the rate of last year and highlighted the 7.8% increase in the minimum wage since the last budget. He did acknowledge that not everyone has benefited from such wage increases.
Varadkar stated that there will still be a need for one-off measures, but they will not be as extensive as those seen last year. He mentioned that in addition to the one-off measures in the Budget that will put money directly into people’s pockets before Christmas, a set of new measures will be announced for implementation in January. These measures will include pension increases, welfare increases, a further boost to the minimum wage, and income tax reductions, primarily aimed at helping working individuals manage their expenses.
Moreover, the Minister for Public Expenditure, Paschal Donohoe, emphasized that the one-off measures in the Budget would still make a significant impact and stressed that assisting people in dealing with the cost of living crisis remains a crucial aspect of the upcoming Budget.
Regarding support for the rental sector and mortgage relief, Donohoe acknowledged the need for further action and ensuring that any assistance provided is targeted effectively. He explained that while the challenges faced by many are recognized, the government is also working to address various other issues.
Furthermore, Varadkar urged caution regarding corporate tax receipts and warned that as a small open economy, Ireland could be profoundly affected if global economic circumstances change suddenly. He mentioned that there will be a surplus of approximately €10 billion this year and that a surplus of a similar amount is expected for the following year. He proposed the creation of two funds – one to address higher pension costs due to an aging population, and another to cover future infrastructure expenses.
In addition to tackling the cost of living crisis, Minister for the Environment Simon Coveney stated that the Budget will include measures to support businesses. The government aims to target and aid businesses by providing one-off measures before the end of the year and incorporating further support in next year’s Budget to address increased business costs despite economic growth.
Separately, regarding the Temple Street Children’s Hospital spinal surgery controversy, Varadkar assured that the expert review would be independent and comprehensive. He acknowledged the requests made by parents, including the option of obtaining second opinions for the children involved. He emphasized the importance of stabilizing the service to ensure children with deteriorating conditions receive proper care while investigations and reviews take place.
In conclusion, while Varadkar warned of reduced measures in the upcoming Budget compared to last year, he emphasized that inflation had moderated and wage increases across the economy had offered some relief. The government plans to announce new measures in the Budget, including pension and welfare increases, a boost to the minimum wage, and income tax reductions. The Budget will also address support for businesses and the need for assistance in the rental sector. The Taoiseach also highlighted the importance of careful management of corporate tax receipts and the establishment of funds to address future pension costs and infrastructure development.
