Next budget will be 'tighter' than previous years, says Chambers

Cate McCurry, PA

Budget 2025 will be “tighter” than previous years, the Minister for Finance has said.

Jack Chambers said he is keen to get back to a more “regular” budgetary environment than what was previously rolled out during the Covid-19 pandemic and high levels of inflation.

He said he wants to strengthen living standards and support for householders and families who are still under pressure from the rise in inflation in recent years.

“On wider cost-of-living challenges, the current economic backdrop is that inflation has levelled at around 2 per cent, and we expect modified domestic demand to strengthen, which means the wage increases that households are experiencing should see real effect in economic terms through the year,” Mr Chambers added.

“The budget is really framed in a careful way. We’ll obviously set that out next week as part of the summer economic statement.

“But we’re clear that for many there are still pressures on households and on families and we want to make sure we strengthen living standards and support people through the winter period.

“What that mix might be is something we’re going to have to be careful about.

“It’s going to be a tighter budget than what we’ve had through Covid and through very high levels of inflation.

“I think we have to get back to a more regular budgetary environment, but through that and through sound economic management we still have the capacity to support people and improve living standards.

“That’s what we’ll be seeking to do in a progressive way in the budgetary process.”

Minister for Housing Darragh O’Brien and Mr Chambers backed a further increase to the renters’ tax credit.

The tax credit, which is currently €750 for a single person, could rise to €1,000 next year.

Mr O’Brien said: “That’s something that we will absolutely discuss and Minister Chambers and I have already said that we would like to see a further expansion of the renters’ tax credit.

“Really importantly for renters, lots of renters want to buy.

“That’s why we’ve scaled up the First Home scheme. We’ve invested an additional €80 million this year, €40 million from us, €40 million from the banks, because lots of renters are now buying their homes by using the First Home scheme.”

Mr Chambers said: “I think, on the renters’ tax credit, it was a really important measure to help support renters where rents were rising and are rising and gives them some support from the state.

“Obviously, every budget I think has to make progress when it comes to affordability and housing and supporting renters.

“We’re not at the point yet of deciding what rental policy measures might be.

“But we want to make sure that each budget we make successive and continued progress for renters and also on affordability of housing.”

Separately, Mr O’Brien said he will publish the revised housing targets in October, hinting that they could reach up to 50,000 per year.

Mr O’Brien added: “Jack and his department did a really good piece of work recently, that if we were, for example, to go to 50,000 (houses), that you’re looking at the requisite investment for that on or around €20 billion.

“To put that in context, this year we will deliver mid to high 30s, hopefully, we’re investing €5.1 billion as a State.

“There will be about eight to €9 billion in addition to that by private finance to deliver that scale of homes.

“We’re looking at a significant ramping up.”

He added: “I intend to publish, with the approval of Government and colleagues such as Minister Chambers, will publish the new targets in October of this year.

“They are going to be ambitious. Every target we’ve set so far we’ve exceeded, so targets have never been the ceiling, they’ve been the floor.”