Budget 2025: Harris and Martin defend budget ‘bonanza’ in face of fierce criticism

Provisions to ensure secondary school students do not have access to their mobile phones during the day will benefit them both academically and socially the Minister for Education has said at her department’s Budget briefing this morning.
Emmet Malone reports that on Tuesday it was announced the department would provide €9 million to schools to fund the purchase of secure pouches or other storage systems with the schools themselves making the final decision on how best to implement the initiative.
“I’m very conscious that mobile phones in schools are an issue of huge concern to parents,” said Norma Foley. “I believe this will be an important and supportive, positive, well-being initiative among pupils throughout our schools because it will help them learn in the classroom, make friends in school without the distractions that arise from the use of mobile phones.”
She said all of the available research suggested the students would benefit from the move and that it had been agreed upon after consultation with schools and parents’ organisations.
She rejected criticism of the amount of money to be spent on the plan saying it was a “health and well-being measure,, it’s to improve student learning outcomes, to improve socialibility and to improve mental health and student experiences within the schools.”
The number of houses being built needs to increase to 60,000 a year and the provision of infrastructural investment in the Budget will contribute to this, the Tanaiste, Micheal Martin has said.
“We need to build as many houses as we can as fast as we can,” he told reporters including our own Colm Keena.
There were no updated target for housing in the Budget but it should be remembered that targets are not a limit and that the targets for housing had been exceeded last year and would be exceeded again this year.
When the Government was formed approximately 20,000 houses a year were being built, that is now at 40,000, and we need to get to 60,000.
Investment in water infrastructure, he said, is an “enabler” that can unleash housing development, he said. Government investment in infrastructure will “accelerate the provision of housing”.
The Government has been warned to promptly clarify how the land hoarding tax will operate because of the potential cost to local authorities of the tax,” writes Marie O’Halloran.
Independent Senator Victor Boyhan said that all local authorities would be subject to the Residential Zone Land Tax (RZLT) and that many had unused land banks.
RZLT imposes a charge of 3 per cent of the market value each year on land that has been zoned for residential development and has services in place to develop housing.
“No one has quite done the sums on the exposure and tax for local authorities,” he said, insisting that all local authorities will be subject to the provision which comes into effect in February next year.
Speaking in the Seanad he stressed that “there is no exemption for local authorities to exempt them from that tax.”
Minister for Agriculture Charlie McConalogue has said the 9 per cent increase in his budget is more than the 6 per cent increase in the overall budget, reports Ronan McGreevy.
Announcing a raft of increases in farm payments, Mr McConalogue said he understood the importance of underpinning farm incomes given current volatilities in both costs and prices.
There are increased payments for dairy, beef, sheep and tillage farmers, but many farming organisations were disappointed that the Government did not announce a scheme to deal with income volatility in farming.
Last year was a disaster for farmers with incomes down by 57 per cent due to poor prices for milk and cereal and lower productions volumes due to bad weather. The previous year, 2022, was a record one for Irish farmers in terms of prices.
When pressed at a press conference on the issue, Mr McConalogue noted the Minister for Finance, Jack Chambers, will consider an income-volatility measure in next year’s budget. Mr McConalogue explained that income-volatility measures required a lot of work across different departments and pieces of law would have to be changed.
“There had not been agreement in the Department of Finance until this point. We have engaged in great detail about this, but it is quite complex. It simply wasn’t possible to have that delivered in terms of this budget,” he said.
“It is a very significant step forward and an advance when the Minister for Finance says this is something we are committed to introducing in next year’s budget.”
The Q&A with Minister for Finance Jack Chambers and Minister for Public Enterprise Paschal Donohoe on RTÉ has finished and there were few if any fireworks.
Michael, a fishing industry representative, called in from his boat to complain that “never have we been in a worse situation, while the exchequer has never been in a better situation”, writes Vivienne Clarke.
He said it was “beyond belief” there had not been more supports in Budget 2025 for the fishery sector.
“There is never, ever anything for the fishing industry. We are a primary food producer. The last four years have been the worst ever – Brexit, Covid, the war in Ukraine. I am down €30,000 in the last two years” (he has a small fleet of four boats).
In response Paschal Donohoe said that there had been €177 million support in the budget for the fishing industry. Three schemes – inshore fisheries scheme; sustainable fisheries scheme and Young Fishers scheme – to encourage more to enter the sector.
The Minister for Enterprise, Trade and Employment said he does not accept the “charge” that he has failed the hospitality sector. He was speaking after failing to deliver a reduction in the VAT rate for food-led businesses, having pushed for it ahead of Budget 2025., reports Ian Curran
Hospitality sector lobbyists – including the Restaurants Association of Ireland and vintners’ groups – had campaigned for 13.5 per cent of VAT to be reduced to 9 per cent to relieve costs pressures in the sector.
Industry groups have widely criticised Minister for Enterprise Peter Burke, describing the package set aside for the sector in the budget as “chicken feed”.
Speaking to reporters in Government Buildings on Wednesday morning, Mr Burke said it was not unusual for an enterprise Minister to speak on behalf of businesses at the Cabinet table.
He said he was confident the “suite of measures” outlined in Budget 2025 – centred around a €4,000 energy grant for retail and hospitality businesses – would make a difference for struggling pubs, restaurants and cafes in the coming year.
Simon Harris has said he is examining issues raised by the Comptroller and General’s annual report over modular homes built for Ukrainian refugees costing an average of €442,000, despite them being only half the size of a council home, reports Harry McGee.
“I’m hearing a few different things, and I want to get to the bottom of this,” he said.
“My understanding is that the estimated cost was offered in advance of sites being secured and at a time of emergency. That’s not [to] defend the overall cost but we do seem to have a situation that a figure was put out before the full facts were actually established. Now I do understand there’s some mitigating factors here in terms of it being an emergency, people trying to respond in real time,” he said.
He also attacked Sinn Féin’s revised police on emergency accommodation saying it would not name any location in which it would locate a centre for international protection applicants, other than references to Stillorgan, Malahide and Montenotte by party leader Mary Lou McDonald in a radio interview.
Minister for Finance Jack Chambers has said there would not be any changes to VAT for the hospitality sector.
He was speaking on RTÉ radio’s Today with Claire Bynre show and responding to a question from Barry Murphy, the owner of a takeaway and diner in Durrow. The Minister said changes could not be made now as the budget had been agreed.
Minister for Social Expenditure Paschal Donohoe also rejected a suggestion about different VAT rates for different parts of the hospitality sector. “We can’t do different figures for VAT.”
Simon Harris was also asked about the general election timing and did not rule out a November date.
While out and about in Dublin – but not canvassing, no siree Bob – he said he was “not going to provide a running commentary on it. I think it’s disrespectful for me to do that, the Constitution doesn’t ask that I provide hourly updates to the media on my thinking.”
He said it was his “constitutional prerogative to call the election but I have been very clear in relation to wanting to do this in a respectful way at the right time. I think this Government operates very well, I have great respect for the two Coalition leaders that I served with, and I won’t be providing them with running commentaries or surprises.”
He concluded by saying he wants “the Government to finish its work … the budget has not been enacted into law or at least very few parts of it have”.
The Taoiseach has defended the spendy nature of the budget while out and about in Dublin this morning..
“No matter what was in yesterday’s budget, I reckon the headlines were written, I reckon the Opposition speeches were written and I reckon the narrative was going to be this was a giveaway budget,” he told reporters.
“I reckon no matter what we did yesterday, people were going to say it’s a pre-election budget [but] it is just a statement of fact, it is a pre-election budget in the sense that it is the last budget before the general election.”
He went on to say that “it does a number of things to help people in the here and now and I make no apology for that. Not only do I make no apology for it, I’ve been actively advocating and campaigning for it in Government, trying to support parents pensioners, people with a disability, but it does more than that”.
“We put aside billions of euros in future funds to make sure my children and their children never live through the austerity that we did and the financial mismanagement of this country in the past,” Mr Harris said.
“And we’ve also invested three billion more in infrastructure and housing and water and electricity. So this is a balanced approach at the time the country’s going well, giving people a little bit of their own money back and planning for the future of our country and also setting money aside for the future.”
Interesting take on an ‘extraordinary’ budget from the University of Limerick here.
In its annual post-budget analysis Social Justice Ireland has noted that “huge resources were distributed [but] much of that enduring distribution will be upwards”, reports Kitty Holland.
It said the “Government’s decision to repeat those measures from the past two budgets which widened income gaps means that the Coalition’s last budget has condemned Ireland’s more vulnerable households to prolonged hardship”.
The analysis welcomes “recognition that the cost-of-living pressures remain a real strain on low- and middle-income families” but adds: “instead of again relying on temporary one-off payments, sustained income adequacy should have been a key focus of Budget 2025.
“Beneath the cost-of-living pressures is an ongoing crisis of poverty. This long-standing problem requires sustained support for income adequacy, and appropriate increases in core social welfare rates, something the swathe of once-off lump sum payments fails to really tackle.”
The Government’s increase in stamp duty on the bulk purchase of houses from 10 per cent to 15 per cent was last night condemned by the Opposition as “utterly useless” and “pathetic”.
Minister for Environment Eamon Ryan introduced the measure in the Dáil to increase stamp duty from 10 per cent to 15 per cent on purchases of 10 or more homes.
He also introduced the move to increase to 6 per cent the stamp duty on properties selling for more than €1.5 million. The Dáil accepted the proposals by 87 votes to 52.
TDs also voted to accept the €1 increase in the price of a packet of 20 cigarettes; to cut the VAT rate on gas and electricity supplies for consumers from 23 per cent to 9 per cent; and to increase the inheritance tax threshold from €320,000 to €400,000 before capital acquisitions tax is applied for children who inherit a parent’s assets.
Mr Ryan said the 5 per cent increase in stamp duty aimed to further disincentivise the purchase of multiple homes. The Government in 2021 introduced a 10 per cent stamp duty on bulk buying of 10 or more houses, and the Minister said the increase to 15 per cent aims to “further disincentivise” bulk buying.
But the Opposition condemned the increase as completely inadequate. Independent TD Mattie McGrath said it was “utterly useless” and “toothless” and the rate should be 100 per cent, an opinion share by most Opposition parties and TDs. He said four in every 10 houses were being bought by conglomerates from abroad.
Extending the Help to Buy scheme may drive up property prices, the Parliamentary Budget Office (PBO) has warned.
In its review of Budget 2025, the independent fiscal oversight body it said “the measure primarily targets demand rather than supply” and noted the Government’s decision to extend the scheme, which provides tax rebates to first-time buyers, until 2029 comes despite a number of criticisms, including from the International Monetary Fund and the European Commission.
“The scheme has been described as a demand side intervention to address a supply side deficit, and a Department of Finance-commissioned review of the scheme found it to be poorly targeted and recommended it be phased out and restructured to more appropriately target recipients and reduce the deadweight,” it said.
Revenue data shows that 49,684 Help to Buy claims have been approved since its introduction in 2016 with an estimated cost of €1.07 billion.
In its review of the budget, the PBO said measures, which included changes to the income tax bands and a reduction in universal social charge, would increase take-home pay for workers.
However, it cautioned that “with the economy at full capacity these tax measures may add to inflationary pressures”.
Responding to a question about public perception of wasteful Government spending, Tánaiste Micheál Martin said: “We can’t afford waste, the bike shed shouldn’t have happened.”
There were many projects that had been delivered on time – schools, hospitals, the Dunkettle interchange, he said. Some checks and balances had taken “ages” to be done, but there were lots of good examples of projects being completed on time and on budget, Mr Martin added.
When asked about the date of the next election, Mr Martin said it was his view that February would be “an ideal time for an election.” There were measures in Budget 2025 that he wanted to see delivered. He did not understand “this speculative frenzy”.
“I’ve been very consistent [about the date], nothing has changed my perspective.
“I don’t understand the frenzy. February allows us to get important Bills through. I would like them to be completed.”
The hospitality sector continues to be very unhappy.
The Tánaiste, Micheál Martin, said he took issue with the comments of the Fiscal Advisory Council about Budget 2025.
Investment in infrastructure was “quite significant”, all of which was necessary to enable more new homes to be built, Mr Martin said.
He denied the budget would result in an inflationary cycle. The forecasts by the Department of Finance would indicate otherwise and the Fiscal Advisory Council had not questioned those forecasts, he said.
Taoiseach Simon Harris told Newstalk Breakfast he was “not just running an economy”, he was “running a society”.
Defending Budget 2025, Mr Harris said there had been a lot of targeting in it, so he would not apologise for the universal payments, reports Vivienne Clarke.
“People who pay taxes are entitled to a little bit of their money back.” Responding to criticism from the Fiscal Advisory Council, the Taoiseach said the council was there “to keep politicians in line”; it had been set up by government, “but my bosses are the people of Ireland.”
“Billions” had been put aside, “building that buffer for the future”, he said.
Mr Harris said he was confident that inflation was on a downward trajectory – and that was the balance “that we tried to introduce yesterday”.
The budget was an attempt to “help people in the here and now”.
Very early days in this very unscientific poll but …
What do people make of the budget? While phrases, words and headlines such as giveaway, bumper, bonanza, bribe, Jack Pot and Jack and his beans talk (our favourite) have dominated the news agenda since details of the budget were confirmed yesterday afternoon, it is really interesting to read what people have made of it … and based on this piece in today’s paper, they are not happy.
The next big question is about the general election. For weeks now Taoiseach Simon Harris has been insisting that the Government will serve its full term and playing down speculation that he will go to the country in November.
It might look a lot like canvassing but it is probably just a coincidence that he is going on a Dublin city centre walkabout later today with many of those who will be running for Fine Gael in the election, whenever it happens.
What we do know is that the Finance Bill is to be published on October 10th and it could be voted through by both Houses of the Oireachtas in a matter of days. That would allow scope for an election by the middle of November. Time will tell.
At the end of his speech yesterday Jack Chambers was full of hope. Closing his speech he quoted Micheál O’Muircheartaigh when he urged people to keep hoping. “As elected representatives, I believe it is our responsibility and duty to foster a real sense of hope for the future,” he said.
We resisted sharing it yesterday but as he spoke another quote about hope came to mind. “Hope, in reality, is the worst of all evils because it prolongs the torments of man,” said the not always entirely jolly Friedrich Nietzsche more than a century earlier.
For what it’s worth we’re in the O’Muircheartaigh camp.
If you have any budget-related questions we have you covered. Our own Dominic Coyle and Beryl Power from PwC will be online later this morning answering readers’ questions. You can ask one here.
You might be asking who or what is the Irish Fiscal Advisory Council at this point.
It is, to use its own words, “an independent statutory body that acts as Ireland’s budgetary watchdog. Its purpose is to provide an independent assessment of various aspects of Irish budgetary policy. It comprises a five-member part-time ouncil and a full-time staff or “Secretariat” that supports its work”.
Today’s lead story is not, perhaps, the happy one the Government may have been hoping for. While it outlines what is surely one of the most spendy budgets in the history of the State, one which will leave many households more than €2,000 better off than they might otherwise have been, the top lines come from the State’s independent budgetary watchdog, which has sharply criticised it and warned that it “repeats Ireland’s past mistakes of pumping billions into the economy when it is a full employment”.
In an initial “flash” response, the Irish Fiscal Advisory Council warned: “Ireland needs a more serious vision that delivers on the economy’s needs without repeating the boom-to-bust pattern of its past.”
It said the large spending increases would drive inflation, adding an estimated €1,000 to the cost of a typical household’s yearly outgoings.
“Large budget packages in recent years have put money back in people’s pockets,” said the advisory council. “But they have taken it away by pushing up prices.”
So, what can we expect today. Well there is a whole lot of budget still to digest for starters. The two main authors – Minister for Finance Jack Chambers and Minister for Public Expenditure Paschal Donohoe – will follow the very traditional route from Leinster House to Montrose for a grilling by listeners of the Claire Byrne Show on RTÉ from 10am while various departments and Ministers will hold briefings outlining what the budget means in their area.
The hunt will also be on for the banana skins – the surprise elements that sometimes catch Governments on the hop as the dust settles on their big day. And there is the small matter of general election speculation that is not going to go away for a long, long time – or at least until the date is set.
Good morning and welcome to our continued live coverage of Budget 2025. The day after budget day is when departments give more detailed briefings, finance Ministers answer your questions and some of the finer points are parsed in more detail.
There is a bit of a morning after the night before vibe today. While there were few surprises, given so much had been flagged in advance, the scale of the budget spending was still remarkable.
And it is that scale which is the focus for the State’s independent budgetary watchdog, which has sharply criticised Tuesday’s bonanza budget, warning that it “repeats Ireland’s past mistakes of pumping billions into the economy when it is at full employment”.
The Irish Fiscal Advisory Council warned “Ireland needs a more serious vision that delivers on the economy’s needs without repeating the boom-to-bust pattern of its past.”
It said the large spending increases would drive inflation, adding an estimated €1,000 to the cost of a typical household’s yearly outgoings.
“Large budget packages in recent years have put money back in people’s pockets,” said the advisory council. “But they have taken it away by pushing up prices.”
The advisory council was also critical of the one-off benefits that have now been repeated for the third year in a row. “The same supports could have been provided to those most in need at a much lower cost,” it said.