Regional independents urge health, utilities and homes to be prioritized as pre-budget talks get under way

Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath began pre-budget meetings with TDs today.

First to open the door were the regional independents, who came out with confirmation from the two finance ministers that there would be a substantial cost-of-living package in the budget at the end of next month.

In particular, Mr. Donohoe and Mr. McGrath are looking for unique revenue streams that will enable giveaways that won’t be repeated in years to come.

The general parameters are that there will be a package of 6.4 billion euros, of which 2.4 billion euros are already “prepared” from previous movements, a year-round application or demographic changes. There will also be a tax package of one billion euros for 2023. But the hunt is on to find measures, and their financing, which will make it possible to relieve families over the rest of 2022.

Regional independents pointed out that there had been windfall revenues in the current year from corporation tax, which would allow for moves before Christmas.

Above all, they want public transport to be free for all students, both because of the pressure on families and the crisis in third-level housing which will force thousands of people to go to university.

Denis Naughten, leader of the eight-member independent group, said that while they wanted to see increases in social protection for all due to the current year’s inflation, they also wanted more recognition for workers, arguing that it should always pay to be at work. .

There were anomalies that penalized people, especially with regard to overtime and overtime.

He said medical and dental spending was another area where the government should help, pointing out that he had previously cut tax relief from the marginal rate to the standard rate by just 20%.

At the very least, the budget should increase that figure to 30%, argues the independent group.

“We need a whole-of-government approach to address the rising cost of living, lack of affordable housing, climate challenges and accessible local health services,” the group said.

“People, health, well-being, public services, housing and infrastructure must come first.”

A comprehensive review of tax credits and the welfare system must be completed to ensure that work is always financially better for citizens and families, their brief says.

In the meantime, Social Protection’s “Labour Benefits Estimator” should be upgraded to make the interface more user-friendly and provide citizens with a comprehensive assessment of their individual benefits and benefits as well as education and health options. training.

The current capital gains tax (CGT) rate is high by international standards at 33% and the €1,270 annual exemption threshold is “relatively insignificant”, the group said.

“The succession and transmission of the family heritage will encourage the next generation to take over the operation of businesses and farms. Not only does this rejuvenate the business, but it allows for a long-term climate and sustainable investments that help reduce our national carbon footprint.

“It also allows people to move, live and thrive in regional Ireland.”

Meanwhile, Green Party leader Eamon Ryan announced a one-off tax on energy companies.

He announced a cornerstone of the 2023 budget on Twitter – before deleting his “revelation” of an impending windfall tax on utilities.

However, a Green Party spokeswoman later told ‘What he meant was that we will review and explore the option of a windfall tax.

“But it’s not in our gift. It is a government decision. »

The full text of Mr Ryan’s short-lived afternoon tweet read: ‘We have the capacity to meet demand over the coming winter. The real challenge comes from the price, which is why we will put in place an exceptional levy on electricity companies to help pay for the aid we will provide to households and businesses.

The tweet was deleted within minutes.

A windfall tax could provide hundreds of millions of euros to households to help them through the energy crisis this winter.

But the Greens said it was meant to mirror a radio interview in which Mr Ryan said the government should ‘consider issues such as exceptional charges’.

Steps needed to be taken to get households and businesses through “an unprecedented period” of high inflation caused by Russia’s invasion of Ukraine, he said. The government will ensure that people can afford to keep the lights on, he added.

Reaction from the Department of Finance has been sought in relation to Mr. Ryan’s final tweet and its implications. A response was received that did not directly address what had happened.

Instead, he said: ‘The European Commission has confirmed that EU Member States may consider imposing temporary tax measures on windfall profits of energy suppliers and use the revenue generated to provide relief to consumers. high prices.

However, he warned: “Changing tax rates or imposing additional levies in certain sectors could have unintended consequences. There is a risk that these taxes will lead to increased costs for the consumer and negative impacts on investments in the energy sector, in particular in the field of renewable energies.

The windfall tax proposals “must consider broader energy policy”, he added, referring to Mr Ryan’s Department of Environment, Climate and Communications.

Some energy companies operating in Ireland, such as ESB, are state-owned. “A change in dividend policy might be more effective in altering the amount these companies recoup,” the finance ministry said.

Just before the Dáil rose in July, the Taoiseach told the House: “We are considering the question of a windfall tax. We will keep it under review. There are advantages and disadvantages. ESB is a Crown corporation and we derive a dividend from it.

The Irish Independent later revealed that officials were secretly working on the model of a windfall tax which could be announced in Finance Minister Paschal Donohoe’s budget speech on September 27 next.

The UK government has already announced a one-off tax on energy companies for its 2023 budget – with UN Secretary-General Antonio Guiterres calling on all countries to do so, a call he repeated yesterday.

Jennifer Whitmore, of the Social Democrats, said her party had supported a windfall tax “for some time now”, with a view to using the revenue collected to reduce energy costs for families.

The Green Party, after Mr Ryan’s tweet was taken down, said it was intended to say there would be a review and exploration of such a tax, but Ms Whitmore pointed out that such phraseology had already been used by the Taoiseach and the Tánaiste, “who previously said they would consider it.

She added, however, “It must be done immediately.” The Labor Party also backs a windfall tax, while Fine Gael leader Leo Varadkar said the state could take action where “super-normal” profits were generated.

People Before Profit TD Paul Murphy said the Dáil would not sit again until Wednesday September 14 after an eight-week suspension in which people’s incomes were “eroded, day by day, by inflation of almost 10 %”.