Cost-of-living package in Budget won’t be as big as previous years, Finance Minister confirms

bite of the apple

Senior members of Government are in Leinster House this morning for a Cabinet meeting as the Dáil returns from its summer recess.

MINISTER FOR FINANCE Jack Chambers has poured cold water on speculation of a giveaway-Budget, telling reporters this afternoon that the cost-of-living package won’t be as big as it was in recent years. 

Speaking outside Government Buildings today, Chambers said that because price inflation has moderated to just over 1% in recent months (1.7% in August down from 2.2% in May), he does not expect the package to be as large as it was in the previous two years.

The minister was responding to analysis from the Nevin Economic Research Institute which stated that there is no policy rationale for one-off payments in this year’s Budget. 

Chambers said prices in the economy, particularly the cost of energy, are still high and as such cost-of-living measures are required but at a reduced scale in his view. 

“It is important to support workers and families through the winter period, and we’ll calibrate the final amount and nature of the cost of living package in the next two weeks,” Chambers said.

The upcoming Budget is front and centre as politicians return to Leinster House today after the summer recess, only a week after a European court ordered Apple to cough up €13 billion in unpaid taxes – with interest bringing the amount owed to €14.1 billion.

Speaking to media on his way into Cabinet earlier today, Taoiseach Simon Harris said the revenue coming from Apple’s court-ordered tax payment to Ireland should be invested into the “future needs” of the country.

The government has still not confirmed how or when it intends to use the money, however, with Harris saying today that the money should not be put into “day-to-day spending”.

“I think it’s really important that this government puts in place clear principles around what could happen with the proceeds from Apple’s tax,” Harris said.

“It’s important we bring clarity to what the various options are.

“I think it’s important that we have an honest conversation about what that can be spent on and what it cannot be spent on,” he said.

“Clearly, when you receive money that is one off, you can’t put it into day to day spending, but there are real and exciting opportunities in terms of how you can invest that in the future needs of our country.

“I expect the government to be in a position to outline some of those principles in the weeks ahead.”

Asked later about housing, he said the government is spending a “serious amount”, which he said is “right and proper, to catch up for the decade of loss due to the financial crash”.

“When I’ve been talking this summer about what we can do around infrastructure, what we can do about the sale from bank shares, and indeed, what we can do with the Apple revenue, I think there’s real possibilities here in relation to housing,” the Taoiseach said.

Around 52,000 new homes will be needed every year until 2050 to meet Ireland’s housing demand, according to a report released today by the Central Bank.

The figures marks a significant increase on the 32,695 new homes completed last year and on the estimate in the government’s Housing for All strategy, which said Ireland would need an average of 33,000 new homes each year until 2030.

Speaking about the report, the Central Bank’s Director of Economic and Statistics Robert Kelly said the Irish housing market has been “subject to a decade of under-supply, during which house price and rental growth have outstripped income growth and stretched affordability”.

Sinn Féin’s housing spokesperson Eoin O Broin also claimed the regulator’s report showed a “growing gap” between what is needed to fix the housing crisis and what the Government is doing, and called for a “radical reset” of housing policy. 

“Unfortunately, there is little evidence that the current Government is up for that reset or willing to accept the key recommendations of either the Housing Commission report or those contained in the Central Bank commentary today,” he added.

With additional reporting from Jane Matthews