Budget 2025 delivers €10bn package

Today’s Budget for 2025 largely stuck to the script. The Government still plans the €8.3bn of spending rises and tax cuts it flagged in the Summer Economic Statement, but also implemented a fresh €2bn ‘cost-of-living‘ package that will hit households in Q4 2024. Income tax cuts worth €1.6bn will also boost disposable incomes at the average wage level by 2% in early 2025. Attention will inevitably focus on the Minister for Finance’s decision to put off deciding how to utilise the estimated €13bn of unexpected windfall receipts from the Apple tax case. Perhaps more striking is that the Department of Finance now expect underlying corporate taxes to grow to €29.5bn in 2024, from €23.8bn in 2023. Hence, despite today’s Budget package the Department of Finance is still forecasting a Government surplus of €10bn (3% of GNI*) in 2025.

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Bank of Ireland Economics Weekly 1st October 2024