The Cabinet is to give the green light to holding the Budget on 27 September – two weeks earlier than initially planned.
It comes as the Government is set 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 likely 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% and 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.
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The Taoiseach has said that the Government is going to get the balance right on Budget 2023.
Micheál Martin said that the Summer Economic Statement lays out the parameters of what is possible, but Ireland is in a very unique set of circumstances coming out of Covid-19, supply chain difficulties and balance between supply and demand which created its own cycle of inflation .
He said that in Ukraine has been very dramatic in its impact on inflation prices, which has fallen into the broader economy.
“We do have to go through a combination of budgetary and temporary measures to alleviate the pressures on people,” he said.
“That is the objectives need a detailed comprehensive approach to alleviate pressures, and we have to think of 2023 and beyond and make sure we have sustainability in our public finances and see what we can do for the remainder of 2022 as we are conscious of people under a lot of pressure now.”
He added that the Government needed to think about what it can do in the budget and have sustainability in pay, taxation measures and public expenditure.
Meanwhile, the Tánaiste has said there will be a decent amount of space in the budget to tackle the rising cost of living, pointing to increases in pension and welfare rates.
Leo Varadkar also said there would be increases in the back-to-school allowance and a rise in the SUSI grant.
He said the Summer Economic Statement will set out the parameters for the next six months and said the economy is performing strongly with record levels of employment, rising incomes and record corporation tax take.
Asked about the date of the Budget, Mr Varadkar said that ministers Pascal Donohoe and Michael McGrath were working on it and are likely to be in a position to conform the date this afternoon.
But he said it was important to point out that no early, late or mini budget will get on top of inflation and he said what was required was a set of measures from an international, EU and domestic level.
Arriving ahead of today’s Cabinet meeting at Dublin Castle, the Minister for the Environment said it was a difficult time politically and economically.
Eamon Ryan said the Government needed to target measures to support people who are in particular risk of fuel poverty and also reduce the cost of living for people.
He said gas prices are still high and that will impact people in the autumn and said the Government was right to target measures in that period.
He also said that as there was a reduction of public transport fares, there needed to be an expansion to the fleet.
Asked about the Tánaiste’s earlier comments where he signaled a rise in welfare and pension rates, the SUSI grant and back to school allowance and if there was anything left to be said about the budget the minister laughed and said “no comment” before adding that it makes a lot of sense what he said.
Minister for Public Expenditure and Reform Michael McGrath said it is their intention to announce the date of the Budget today.
When asked if it would be held in late September, he said he would let the Cabinet decide that.
The minister said it was a significant day in the budgetary calendar, and that the Summer Economic would provide clarity on what funds statement are available for Budget 2023.
He said it is being framed against a challenging backdrop, having enough resources available to help people while at the same time not chasing inflation or making the situation worse.
The Minister of State at the Department of Enterprise said the Summer Economic Statements that public finances are in a healthy position.
Robert Troy said Budget 2023 will be “progressive” and will help “those with the greatest needs”.
Speaking on RTÉ’s Today with Claire Byrne, he said there will also be once-off supports that will help to mitigate against the most extreme elements of the cost-of-living increases.
As part of the budget, there will be a comprehensive package of measures to help the people who need the help the most, the people who are finding it extraordinary, energy costs, the costs of living, and that will be done in parallel to this Budget later this year,” Mr Troy said.
The Fianna Fáil TD for Longford–Westmeath said Minister for Public Expenditure Michael McGrath sought the views of colleagues in terms of what measures would help address the cost of living for the people that TDs represent.
Speaking on the same programme, Labor TD Ged Nash said the Government should not wait for the Budget and some measures to support those who are struggling with the cost of living could be introduced now.
“It’s now that people need the support,” he said. “And in fact, you could argue that you could actually introduce some of the measures that we’ve been talking about, like for example, the €3 million social welfare bonus and target the people that need it most.”
Deputy Nash said tax cuts would not target those who need help the most, and that they would “disproportionately benefit” the top 20% of income earners in this country.
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 centers 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.
Additional reporting: Conor Hunt and Micheál Lehane