Even though the Summer Economic Statement seemed politically charged, it posed two significant queries. Firstly, are we on track for a all-out budget? Secondly, how does Jack Chambers perform as the Finance Minister?
Repeatedly, Chambers and Paschal Donohoe, Minister for Public Expenditure, emphasized that the budget released on the 1st of October wouldn’t serve as a political tool for the upcoming elections.
Nevertheless, the preliminary figures proposed seem to contradict their claim. The comprehensive budgetary package, which includes generous tax reductions and spending, amounts to a lavish €8.3 billion. By 2025, the state’s total expenditure will cross the €100 billion mark – a massive leap of €6.9 billion from 2024.
A closer look at these sums, however, shows that a significant portion of the new budget represents cost-maintenance expenses. Additional spending of €5.1 billion next year is required to cover existing costs and obligations, including the public sector wage agreement (€1.2 billion) and an extra €1.5 billion allocated to the HSE in 2024, with an increased amount of €1.2 billion marked for 2025.
Regardless, there is still some wiggle room for the standing Government, with elections looming ahead. Chambers’ tax initiative amounts to €1.4 billion. Concurrently, Donohoe has some liberty concerning the €6.9 billion reserved for immediate and capital spending. Instead of introducing a third tax bracket, changes will be made to tax thresholds to avoid fiscal burden for earners in the lower and middle-income bracket.
Chambers stated that the primary goal was to avoid imposing an increased income tax percentage as workers’ earning increase.
Preliminary indications for the budget are largely positive. An impressive 2.8 million people are employed, with the unemployment rate sitting at 4.5%. In June, inflation saw a decrease to 1.5%, marking the lowest in over four years. Despite recurring warnings about its unreliable nature, corporation tax continues to thrive.
Additionally, a striking €4.5 billion has been set aside in 2025 for contingencies, primarily housing for Ukrainian refugees and applicants for international protection. This issue has taken centre stage in the recent summer elections.
When it comes to Jack Chambers, if there are any inadequacies in his ability to handle such a top-ranking role, he didn’t let it show during the hour-long media briefing. He appeared somewhat anxious on occasion, but unmistakably came prepared. He even managed to utilise the jargon, mentioning at one point the need to allocate funds for “countercyclical interventions”.
In response to questions about his confidence in his ability to manage the budget, he affirmed that his four years of Cabinet experience would prove beneficial. The truth of that claim will be tested on the 1st of October.