Budget 2025 should close income gaps and build resilient public services

Posted on Wednesday, 3 July 2024
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Government should use its final Budget to close the income gaps which have opened as a result of temporary measures in last year’s budget.  These measures, concentrated among welfare dependent households and low income workers, have seen income gaps widen which will have long term impacts.  Budget 2025 should adopt recurring taxation and expenditure measures which prioritise the protection of the most vulnerable groups in our society and close these income gaps.


Prioritising vulnerable groups
Adequate levels of social welfare are essential to addressing poverty. A minimum social floor means maintaining adequate levels of social welfare. Social Justice Ireland is calling on Government to increase core social welfare rates by a minimum of €25 per week in Budget 2025 and to commit to bench marking social welfare rates to average weekly earnings”. 

Budget 2025 proposals for children, people with a disability, older people and carers:

A €50 increase in the monthly Child Benefit payment alongside increases in the Qualified Child allowances are required to address Ireland’s levels of child poverty.  Children are one of the most vulnerable groups in any society. Child benefit remains a key route to tackling child poverty and is of particular value to those families on the lowest incomes.

The rates of poverty and deprivation for people unable to work due to long-standing health problems remain stubbornly high.  There is a very strong case to be made for the implementation of a cost of disability payment, we are calling on Government to introduce a cost of disability payment of €20 per week in Budget 2025. 

Government should increase the Living Alone Allowance by €5 per week, reinstate the Bereavement grant and Pilot a Universal Basic Services and a Universal Basic Income Scheme for Carers in line with the Programme for Government Commitment to a Carers Guarantee.  Vulnerable groups on fixed incomes must be prioritised in this Government’s last Budget.


Managing transitions and building resilient public services 

Budget 2025 should also help Ireland to manage the many transitions it faces – demographic, digital, economic and environmental.  It should focus on investing in policies for the common good, in our social infrastructure, the public sphere that provides the services that we all rely on.    Resilient and adequately resourced public services and infrastructure will help us to manage the many changes that are coming and support people and communities during these transitions. 

While Budget 2024 made some progress with the establishment of two dedicated funds where much, but not all, of the windfall corporate tax revenues are to be placed there is no detailed plan as to how these funds will be used over the next 10-20 years.

Budget 2025 needs to deliver this plan, one where these resources should be invested only in one-off projects to address deficits in our social and physical infrastructure. Government should allocate any additional windfall revenues to a Domestic Infrastructure Fund which should immediately begin to tackle deficits in our housing, energy, water and transport infrastructure.  This funding should be in addition to the commitment made in last year’s Budget for the Future Ireland Fund and the Infrastructure, Climate and Nature Fund.


Summary of Key Packages:

Housing:  €31m net package including an increase in stamp duty for transfers of property exceeding €1m, an end to the Help to Buy Scheme, an increase in the derelict site levy and investment in homelessness prevention.  

A further €1.75bn to be invested from the windfall surplus for the construction of social housing.

Just Transition: €370m net package including investment in renewable energy, biodiversity, Just Transition and the Circular Economy, an aviation tax on commercial flights, and investment in climate research.

A further €1bn to be invested in off-shore wind infrastructure from the windfall surplus. 

Healthcare, carers and disability: €942m investment prioritising social and community care, disability, and mental health.

A further €600m for Sláintecare infrastructure from the windfall surplus.

Children and Families: €1,545m investment including an increase to Child Benefit and qualified child payments, early childhood care and education, child protection and supports for victims of Domestic, Sexual and Gender based violence.

Rural, Regional and Community Development: €593m investment prioritising the regional development and transition, rural transport, integration, and community schemes.

Education: €543m investment in areas such as reducing class sizes, additional school places for pupils with Special Needs, adult literacy, skills development, community education, digital education and higher education.

Pensions and Older People: €1,144m prioritising a universal pension, investment in social care and Home Care Packages and increased funding for nursing homes.

International Protection: €600m to be invested from windfall surplus to implement the accommodation recommendations of the White Paper on ending Direct Provision.

Overseas Development and World Hunger: An investment package of €2bn to move towards the UN target of 0.7per cent of national income, properly resource our Climate Finance obligations, and make provision for the Loss and Damage Fund.

Taxation Reform: Increase all PRSI rates by 0.5% to yield €900m, this is necessary to address the anticipated future shortfalls in the social insurance fund.  Introduce a Financial Transactions Tax to yield €350m and a Minimum Effective Corporation Tax to yield a stable and recurring additional taxation income of €150m in 2025 with graduated increases to 15 % by 2030 to yield €1.5bn.


Budget Choices 2025 is available to download.