Government is planning another wad of once-off household supports while struggling to keep permanent spending under control
The Coalition, it seems, can’t help themselves. There will, Taoiseach Simon Harris confirmed this week, be a cost-of-living package in the budget. What this means is that some of the laughably-titled “once-off” payments made since 2022 to compensate people for the surge in energy prices and the cost-of-living crisis will be repeated.
But no. The Government will go again in the October budget. We don’t know precisely how. But while there may be a case to repeat supports to less well-off households – though permanent measures would be preferable at this stage – there is no valid argument for a re-run of the much more costly universal measures, such as energy credits on which a whopping €2.5 billion has already been spent giving cash to all households by cutting bills. Many simply do not need the help.
The new Minister for Finance, Jack Chambers, will be persuaded to go along with this on the basis that the payments by their nature do not add to the permanent base of Government spending. The Department of Finance will be unhappy, but officials will have to live with it and console themselves that these are not additional permanent commitments.
The Fiscal Council is worried about the underlying trends, pointing in a series of tweets this week to the latest exchequer returns showing spending so far this year to be a full €2 billion above expectations, with overruns not only in health but “across the board.” Spending Minister Paschal Donohoe and Health Minister Stephen Donnelly have committed to getting health spending back closer to budget, but experience would suggest we should be sceptical.
Fortunately, there is €6 billion in cash being taken off the table for the next budget and put into two funds to support future spending. But such is the buoyancy of revenues that there is still more cash to spend. In my view it would be better to spend a few hundred million extra on improving vital supports in areas like childcare and education and help families this way – especially those in most need – rather than lash out more once-off payments to everyone.
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