€6.7bn Budget package expected as Summer Economic Statement due
The Government is to publish its Summer Economic Statement later today, which will set out the parameters of the Budget.
Last year’s Summer Economic Statement published the parameters of the Coalition’s Budget plans for the next five years.
It included a spending rule which would limit increases in public spending to 5% a year to bring the public finances back into line after the significant sums borrowed to tackle Covid-19.
That looks to be set aside – at least temporarily – in the face of surging inflation and leeway from better-than-expected tax returns.
It is understood that the Budget package will be €6.7 billion, which is €2.2 billion greater than planned.
Around €1 billion of this will be in tax changes, which is twice the amount originally set out.
Overall expenditure is expected to increase by between 5% to 10%.
There is speculation that expenditure could be focused on additional social welfare payments and fuel related subsidies either directly or through a continuation of some tax reliefs.
Social Justice Ireland has welcomed the reported budget increase, but said a concerted effort by Government is needed to help those on low incomes.
Economic and Social Analyst at SJI Colette Bennett said the “windfall in the Government’s coffers” from VAT and corporation tax cannot be expected every year and the best use of it is “to invest it in things like hospitals, primary healthcare centres and things like schools, broadband, public transport and obviously affordable and social housing.”
Speaking on RTÉ’s Morning Ireland, she said Social Justice Ireland believes one off payments are not going to solve the cost-of-living crisis and that instead there needs to be an increase to core social welfare rates by €20 a week.
“We need a sustained package for people who are on low incomes, so once off payments will help with that one bill, but what happens two months later when the next bill comes?
“What people need is to live a life with dignity and to be able to do that with a sufficient income”, she said.
Ms Bennett added that Social Justice Ireland would welcome the Government acting as fast as it can in relation to what needs to be done.