Budget 2025 is fiscally irresponsible. We are using potentially transitory corporation tax receipts to fuel a pre-election giveaway. This decision risks pushing higher taxes onto younger and future workers and it simultaneously undermines our capacity to improve public services in the future. It is a return to reckless pre-crash budgetary strategies.
The 80c increase in the minimum wage is welcome and the Government must stick to its commitment to raise the minimum wage to 60 per cent of hourly median wages by January 2026. In any event, what workers ultimately need is collective bargaining as promoted by the EU Adequate Minimum Wages Directive. That, along with expanded public services, is what will really help workers in the long run.
In addition, Budget 2025 does nothing to solve the range of structural flaws in our economic model. There is no obvious long-term vision to fix the long-standing crises in areas such as housing, childcare, or infrastructure delivery. It seems hard decisions will be left to the next administration. The government’s emphasis on stimulating housing demand with its range of housing tax breaks seems particularly perverse as it will simply push house prices even higher.
The swathe of regressive tax cuts is deeply unwelcome and highly questionable. The Government’s budget will hollow out the tax base just as we are facing into the challenges of slowing growth, climate change, an ageing population, digitalisation, and a reversal of globalisation. These challenges will all put pressure on the public finances. In addition, throwing money from tax cuts into an economy at full capacity will simply raise prices and ultimately erode the gains from the tax cuts.
The biggest winners from the tax changes will be the very wealthiest families benefiting from inheritance tax cuts as well as those on higher incomes that stand to benefit from all of the changes to personal taxes. The relative losers are those without wealth and workers on lower incomes.
The continued reliance on temporary universal cost-of-living measures flies in the face of the evidence that such measures will not protect vulnerable households from material deprivation in a context of permanent structural price increases. These measures at best postpone the loss of real income from rising prices.
Government could have provided the €700 million needed for a second tier of child benefit to protect the most vulnerable children and lift tens of thousands of children out of poverty. Instead, it disgracefully chose to prioritise the wealthiest and most powerful with cuts to inheritance tax. These are real choices that have real consequences and show a disregard for social cohesion and intergenerational equity.
Using additional money to help address our infrastructural deficits is certainly welcome. However, it is not clear whether the government has a strategy to encourage the supply of needed construction workers. There will need to be much greater emphasis on funding for apprenticeships as well as better terms and conditions in the sector if we are to solve the housing crisis.
The measures designed to reduce the cost of using public services such as public transport and education are welcome. In the long-run these measures should be greatly expanded. Free or subsidised universal public services available to all are fundamental to any coherent long-term strategy for reducing cost of living pressures.
ICTU General Secretary Owen said that Budget 2025 will be remembered as a lost opportunity when we failed to properly grapple the crises in childcare, housing and numerous other areas.
Social Policy and Legislative Officer Ger Gibbons noted that Budget 2025 pointed out that the continued focus on once-off measures was only postponing the full impact of cost of living pressures on lower income households.
Finally, Dr Laura Bambrick stated that Government needed to stick to its own commitment to raise the minimum wage to 60 per cent of hourly median wages by January 2026. Ireland has a problem with in-work poverty and deprivation and the Government needs to keep its promise to vulnerable workers.
