Coalition pledges to ‘put money back in people’s pockets’ as Ministers feel push-back in budget meetings

The Coalition has promised to “put money back in people’s pockets” in Budget 2023 amid intense discussions between Government departments in advance of the package being unveiled on September 27th.

Sources in a number of departments said they were encountering pushback from the financial departments to extra-large spending demands in light of pressures posed by the cost-of-living and energy crises.

Minister for Finance Paschal Donohoe declined to say exactly how much of the country’s bumper corporation tax take would be put aside for the cost-of-living package. He said the Coalition has “made clear that in addition to the measures that will be happening for 2023, we will have measures that will be happening this year”.

Minister for Justice Helen McEntee said that while she would “not speculate” on reports of a €3 billion cost-of-living package alone, the Government will unveil a package of at least €6.7 billion on new spending while a separate multibillion euro cost-of-living package will sit alongside this.

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“In Government, we are all really aware that people are struggling, it’s a difficult time, it has potential to get even more difficult in the months ahead, and so what we want to make sure is that we are putting money back in people’s pockets,” she said.

It comes as unions revealed their pre-budget demands including targeted measures to reduce early years, health, transport and education costs.

Irish Congress of Trade Unions (Ictu) general secretary Patricia King said there is a “worsening energy crisis” that risks “plunging hundreds of thousands of more households into energy poverty and threatens the livelihoods and jobs of tens of thousands of workers”.

Ictu’s pre-budget document calls for a series of social wage measures. They include increasing the value of the National Childcare Scheme universal subsidy rate which currently stands at 50c per hour and an increase in the threshold so more families will qualify for higher levels of support.

The unions also want to cap total out-of-pocket fees for families with multiple children using childcare services.

On education, Ictu is calling for a 20 per cent increase in capitation grants for primary and secondary schoolchildren; measures to target the cost of schoolbooks; “crest only” uniforms, and ensuring there is no compulsion in relation to “voluntary contributions” to schools from parents.

Ictu is also seeking better access to the grant system for third-level students and a significant reduction in registration fees over time as part of a shift to a higher education model that is fully publicly-funded.

On housing, it wants the return of a ban on evictions, a rent freeze and a moratorium for people in mortgage difficulty — the kind of measures brought in during the Covid-19 pandemic.

Accelerated progress on the introduction of free GP care for all children and the abolition of hospital inpatient and outpatient fees are among measures Ictu is seeking to reduce healthcare costs.

In terms of transport, the unions want to see fuel-related tax revenues ring-fenced to “move to a new and expanded low cost or wholly free model of public transport”. Ictu says a €10 monthly travel ticket should apply for at least the duration of the cost-of-living crisis.

It is also seeking a cap on electricity prices for low-income households

The unions want the minimum wage of €10.50 per hour increased to the recommended “living wage” of €12.90 per hour. They say welfare increases should be greater than inflation and be at least €20 per week.

Ictu’s budget submission comes at a time when members of public service unions under its umbrella are considering whether or not to approve the proposed new public sector pay deal. Those unions have said they will take five weeks to consider the Government’s pay offer before taking a collective decision on October 7th on whether to accept the package which amounts to increases of 6.5 per cent for most public sector workers. While some unions have already recommended that their members back the deal, there have also been warnings that a failure to bring in additional cost-of-living measures in the September budget would impact on how workers vote in ballots in early October.

Union members will be closely watching the so-called “social wage” measures in the budget that help with the cost of living but do not directly involve pay increases or tax relief.