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Ireland’s government has unveiled €2.2bn in pre-Christmas cost-of-living help for families — including energy credits and child benefit bonuses — ahead of a general election widely expected within weeks.
Detailing its budget 2025 plans on Tuesday, the government also promised to add €6.9bn to its forecast €101bn state spending next year and to cut taxes by a net €1.4bn.
“Budget 2025 puts the country on a firm footing for the future,” finance minister Jack Chambers told the Dáil, Ireland’s parliament.
Opposition politicians dismissed the announcements as pre-election bribery. Róisín Shortall of the small Social Democrats party said the government was planning to “spray money around and hope it’s enough to win the election”.
Taoiseach Simon Harris told reporters he made “no apology whatsoever for giving people a bit of their own money back between now and Christmas”, saying the measures would help until moderating inflation fed through fully into prices. Annual consumer price inflation has fallen to less than 2 per cent for the first time in three years.
Harris, whose Fine Gael party is rising in opinion polls, must call an election by March, but many politicians are preparing for a vote next month. Polls show voters favour keeping the centre-right Fine Gael and centrist Fianna Fáil, which together lead a coalition with the Green Party, in office.
Chambers said the government planned to spend a further €3bn on Ireland’s water system, housing and the ageing electricity grid, paid for by the sale of shares in AIB, one of the banks the state bailed out after a financial crisis more than a decade ago. He did not say when the money would be spent.
Ireland has grown rich from investment by multinational tech and pharma companies, attracted in part by its low-tax regime. Those taxes have delivered extraordinary surpluses and public finances are set be boosted still further by a €14bn windfall in back taxes from Apple that the EU’s top court last month ordered Ireland to accept.
The Apple cash has not yet been received and will not be deployed in the 2025 budget, but Chambers said it had the potential to be “transformational” as the government sought to “nurture” foreign investment by prioritising public infrastructure spending.
“It is the government’s view that we should utilise these [Apple] revenues to address the known challenges that we face in housing, energy, water and transport infrastructure,” Chambers said.
Despite the eye-catching spending pledges, Paul Lynam, deputy director-general at the British-Irish Chamber of Commerce, criticised the budget as a “missed opportunity” to make Ireland more competitive by promoting innovation and making regulation more business-friendly.
“In 10 years, no one will look back at this budget as one that set the economic agenda for the country for the coming decade,” Lynam said.
Chambers forecast that growth in modified domestic demand — which strips out the distorting impact of the multinational sector and is the government’s preferred economic measure — would be 2.5 per cent this year and close to 3 per cent in 2025.
However, despite forecasting surpluses of €23.7bn this year and a €9.7bn next year, Chambers highlighted what he said were “real vulnerabilities” in Ireland’s public finances.
Without exceptional windfall corporation tax receipts, Ireland would be looking at a deficit of €6.3bn this year and a €5.7bn deficit in 2025, he said.
“This was a carefully balanced budget that befits a coalition government keen to get re-elected and with a fiscal surplus that is the envy of Europe,” said Vivian Nathan, chief operating officer at Baker Tilly Ireland, a consultancy.
Additional reporting by Emma Agyemang in Copenhagen
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