More than €1bn in tax cuts and €5.6bn in new government spending as the 2023 budget is brought forward to September 27th

More than €1 billion in tax cuts and €5.6 billion in new government spending will be announced in the Sept. 27 budget

The government will also unveil a separate set of cost-of-living measures on Budget Day, which will be implemented immediately.

This could include the extension of €200 electricity credit and a double benefit for people receiving benefits such as unemployment benefit, state pension or disability benefit.

The budget takes place on September 27, two weeks earlier than usual.

The government has been pressured by the opposition to set up an emergency budget to address the cost of living crisis sparked by the war in Ukraine.

However, the Taoiseach had resisted calls to introduce new measures to ease the financial burden of rising fuel, energy and food prices.

But the top government has now agreed two weeks earlier than expected.

The budget was originally scheduled to take place on Tuesday 11th October but it will now be announced by Treasury Secretary Paschal Donohoe on 27th September.

Mr Donohoe and Public Expenditure Secretary Michael McGrath will today outline their budget spending capacity.

Better-than-expected tax returns mean this year’s budget will be in surplus and the proceeds will be used to fund immediate living expenses.

However, the government will also ease the purse strings for next year’s budget to ease inflationary pressures on the most vulnerable and the crowded middle.

The summer economic statement earmarks 6.7 billion euros for tax cuts and new spending for next year’s budget.

That includes a record €1.05 billion tax package focused on raising the entry point where workers pay the highest tax rate. The remaining €5.65 billion will be used to fund new spending proposals, including a collective agreement for the public sector.

However, there are concerns at the Treasury over the country’s reliance on corporate tax revenue.

The Treasury Department’s economic statement describes the economy as “resilient” but warns that “evidence is mounting that economic momentum is slowing”.

It said that the strong recovery in the economy following the Covid-19 pandemic “has paid off in the labor market, where employment levels are now at their highest ever”.

“By maintaining the link between workers and employers during the pandemic, the employment wage subsidy program is one of the key factors in labor market resilience,” it added.

However, it adds that the exit from the pandemic was “not entirely” smooth.

“The rapid recovery in demand has met supply (capacity) constraints and pushed prices higher. The jump in energy prices due to the Russian invasion of Ukraine has worsened the inflation situation,” she adds. More than €1bn in tax cuts and €5.6bn in new government spending as the 2023 budget is brought forward to September 27th

Fry Electronics Team

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