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Cost of childcare, education and health to be tackled in cost of living crisis budget

Increases of at least €10 to the weekly old age pension and other primary welfare benefits are to feature in the upcoming budget Michael McGrath said he and his cabinet colleagues are under pressure to deliver an early budget in the wake of the cost of living crisis. File photo: iStock

FRI, 01 JUL, 2022 - 09:00


Increases of at least €10 to the weekly old age pension and other primary welfare benefits are to feature in the upcoming budget, senior Government sources have revealed. This morning, the Public Expenditure Minister has said it's possible the Government will bring the date forward. However, Michael McGrath said that there is "limited scope" to where the budget can be moved to. Speaking on RTÉ's Morning Ireland, Mr McGrath said that the process of putting together a budget is lengthy and could only be done so far in advance of the second Tuesday in October. Mr McGrath and his cabinet colleagues are under pressure to deliver an early budget in the wake of the cost of living crisis. sources have indicated such a move is under consideration. "We're very conscious of the genuine cost of living pressures that people are under and we have said that there will be a need in the autumn for a set of one-off measures to help people the best way that we can," he said. "And so if it is possible, to bring it forward by a short period of time, within the limits that are there in relation to the construction of a budget, then we are examining that issue at the moment. But no decision has been made. And any change would be modest in nature in terms of date, because the process to put together a budget is quite complex." Minister for Public Expenditure and Reform Michael McGrath TDPhoto:Gareth Chaney/CollinsMr McGrath said that he would not speculate on what type of measures we will see in the Budget, but said that the Government has three key priorities. "One is the most vulnerable, they will need the most help at this time. But people who are working and working families will also need help because they too are feeling real pressure at this time," he said. "And they will want to see us as a government move to reduce costs in areas like childcare, transport and health and reduce the tax burden that they face as well. "I think the third key priority is public services. The relationship between the State and the citizen works on the basis that all citizens pay some tax to government and then expect the State to offer them good services - access to housing, access to health care, good disability services, home care services." Mr McGrath said the Government is targeting "timely, targeted" one-off measures as well as a long-term budget. He said that the scope for this will be laid out in the Summer Economic Statement, which will go to Cabinet on Monday. However, Mr McGrath warned that the global economy is slowing and the war in Ukraine will "not be over any time soon". Budget increases needed Tánaiste Leo Varadkar: 'We are facing a global inflation crisis, and it won't end because of any budget'. Picture: MaxwellsWhile Tánaiste Leo Varadkar has said this year’s welfare package will have to exceed last year’s record spending increases, sources familiar with the budget process have, for the first time, signalled the kind of increases that are needed. It comes as Mr Varadkar warned that the cost-of-living crisis could last years. "The cost-of-living crisis is happening right here, right now," he said. It'll happen all the way through to the budget, and it will continue after the budget. That is the truth of it. "We are facing a global inflation crisis, and it won't end because of any budget, whether it is an emergency budget before the autumn or whether it is one in autumn." The Irish Examiner understands that the three Coalition party leaders — Micheál Martin, Mr Varadkar, and Green Party leader Eamon Ryan — as well as other senior ministers, favour bringing the budget forward to September. "The longer we wait, the harder it becomes,” said one minister. Mr Ryan said he would not object if the budget was moved to "the September period" instead of October. He said it was a matter for the Cabinet to decide when it meets on Monday, but said he would not go for what the Opposition is calling for, "and do it today". The budget is usually held on the second Tuesday of October, but it is thought that this year's iteration could be brought forward by “two or three weeks”. Among the other measures now under serious consideration for inclusion in the final budget are:

  • A significant childcare package which could see monthly fees decrease by at least €100 for parents;

  • Changes to income-tax-band thresholds to ensure low- and middle-income earners are not penalised by entering the higher rate if they receive a pay increase;

  • A reduction in annual student fees and a widening of the eligibility criteria for third-level grants;

  • Retention of reduced public transport fees;

  • Expansion of the GP visit card scheme to make healthcare free at the point of entry for more people.

Fianna Fáil is to hold a special budget meeting today where members will demand a significant cost-of-living package, including increased social welfare payments as well as measures on taxation and childcare costs. Welfare package While Fine Gael has placed an emphasis on healthcare, childcare, and taxation, the Green Party wants to see a considerable increase in the Working Family Payment, to help those who are on low wages and struggling because of inflation. Social Protection Minister Heather Humphreys is under mounting pressure to deliver a €1bn+ welfare package which will target not only the most vulnerable, but also include universal measures which benefit all. Social Protection Minister Heather Humphreys. Picture: Julien BehalOn Wednesday, Fianna Fáil TDs received a briefing from Age Action Ireland, which said that increases of €23 per week in the pension are now needed “just to stand still”. The group had been invited in by Mayo TD Dara Calleary, and while senior sources have said such an increase is not possible, increases of at least €10 will have to be delivered. “There is little or no chance of the Government going anywhere near €23, but €10 is the bare minimum of what is required,” a senior Government source told the Irish Examiner. Meanwhile, the Government’s Summer Economic Statement (SES) is to be brought to a special Cabinet meeting on Monday afternoon ahead of its publication, which will set out the scope of spending for the budget. Speaking to the Irish Examiner, former Fianna Fáil minister and social protection spokesman Willie O’Dea said: “The pension is €245 and inflation is running at 8%, so do the maths — that is an increase of €19.60 needed. I’ll be in favour of the highest possible increase. "There are other benefits which can be improved like the living alone allowance.”

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