McGrath warns bumper budgets cannot become the norm

ireland
Mcgrath Warns Bumper Budgets Cannot Become The Norm Mcgrath Warns Bumper Budgets Cannot Become The Norm
A €4 billion package to aid households and businesses in dealing with the cost-of-living crisis was unveiled on Tuesday. Photo: PA Images
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Additional reporting by Vivienne Clarke.

Minister for Public Expenditure Michael McGrath has said there is a risk that people will become accustomed to large 'giveaway' budgets which cannot become the norm.

Speaking after Budget 2023 was unveiled on Tuesday, Mr McGrath said the last two years' budgets were impacted by the Covid-19 pandemic, during which huge spending measures, such as business supports and the Pandemic Unemployment Payment, were needed to keep the economy afloat.

The cost-of-living crisis was the major challenge facing the latest budget, with many of the headline measures aimed at reducing costs for households and businesses.

Tuesday's €4 billion cost-of-living package contained a suite of once-off measures, including provision for a double social welfare payment, a reduction in the student contribution for those attending college, and a €600 energy credit for all households.

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However, McGrath stressed that such spending was necessitated by the extraordinary times currently facing the State and will not become a feature of the annual budget.

"Is there a risk that it builds expectation that that type of budgetary management can become the norm? Of course there's that risk," Mr McGrath said.

"We are very much alert to that, but that is why we have structured the budget the way we have.

"Certain payments are once-off in nature and will be made in the form of a lump sum and there is no commitment that they will be repeated."

Progressive

Despite the warnings, Minister for Children, Equality, Disability, Integration and Youth Roderic O’Gorman has said the budget was "in the round" progressive.

Speaking on Newstalk Breakfast, Mr O'Gorman said Budget 2023 will go "as far as it can" to insulate families from inflation, however, he said it was not possible to do so completely.

He added the budget recognised the real pressures that people are facing because of the "spiralling" cost of living due to the war in Ukraine and increased energy prices.

The analysis completed by the Government indicated groups with the lowest disposable income were the ones who would benefit most from Budget 2023, the Minister said.

Next year, spending on childcare would be €1 billion, he added, with the main focus being to cut fees for parents by 25 per cent.

Mr O'Gorman said childcare providers could not pass on any costs to parents as participating in the National Childcare Scheme (NCS) meant there was a fee freeze.

However, he did acknowledge that childcare costs vary across the country and the Government could "only speak in averages".

At present, the Government pays 50 cent per hour for every child in childcare, which is now set to increase to €1.40 under the measures announced on Tuesday.

Core funding has also delivered increased capacity of 15 per cent, especially for children under the age of three years, Mr O'Gorman said.

The Minister added that next year it is hoped childminders will be included in the NCS in order to benefit more families.

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