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THIS YEAR’S BUDGET will be held on Tuesday 6 October and people will be hoping they get a bit more in their pocket than last year.

The first budget after the general election saw Irish workers worse off. This was because there was no change to the tax bands and factoring in inflation meant that if your pay hasn’t been on the rise, you’re losing money.

Government parties got a fair hammering over it, with political leaders conceding over the last 12 months that perhaps they made a mistake.

Finance Minister Simon Harris has, ad nauseam, repeated that there will be a tax package in this year’s budget.

It is also the Tánaiste’s first budget since he took over the finance brief, so there’s a lot riding on it.

So, what do we know so far?

One thing that is a certainty for this year’s budget is tax cuts.

Harris said he is “crystal clear” that there must be a personal income tax package. “There wasn’t last year. If there isn’t, it means people end up effectively paying more tax next year,” said Harris in June.

The thresholds, the point at which you pay the higher rate of tax, are something he has his sights on.

“We still pay the higher rate of tax in this country at too low a level. Now, it was about €33,000 back in 2015, it’s now €44,000. I would like to see progress on that in the budgets ahead,” he said.

Workers who work overtime, get a promotion, or see their wages rise should be able to keep their money, said Harris.

While there has been lots of talk about putting more money back in the pockets of workers, Harris struck a cautious note this week following the publication of July’s Exchequer returns.

He said Budget 2027 will strike a “careful balance”, with a package that will “help workers keep more of their earnings, while continuing to invest in our public services and critical infrastructure”.

The figures in the Summer Economic Statement, which sets out the money the government has to play with in the budget, show there is less cash available for new spending measures, with day-to-day spending and new infrastructure growing by €7 billion next year to over €125 billion.

Appearing on The Candidate podcast in June, the Tánaiste said childcare will be a major focus for this year’s budget.

Harris indicated there will be further fee reductions announced as part of October’s budget, adding that over the next four budgets, he wants childcare fee reforms to be a “real signature project delivered by this government”.

“In my view, we have to do something on fees in the budget,” he said.

Secondly, this year’s budget will also seek to address the issue of access to childcare, which has been a growing issue for families. He said he has people who would like to open a crèche but the initial costs for a start-up are too high.

“I think that’s a role that state can help with,” he added, adding that over the next four budgets, he wants each budget to have a signature childcare announcement.

Last year, Micheál Martin and Harris both said they had an issue with the current inheritance system, dubbing it unfair. There was also significant pressure from backbenchers for change.

Last year’s tax strategy papers, which help advise the government about possible changes, pointed out there was a way to make changes for people who do not have children but wish to nominate a beneficiary upon their death.

But this year, Department of Finance officials have warned that proposals to overhaul inheritance tax rules for people without children would come at a “significant” cost to the Exchequer and leave far fewer people liable to pay the tax.

Last month, Martin said he was “very conscious” of the position of people without children who have “worked hard all their lives” and want to leave an inheritance to nieces, nephews or other family members. Harris has indicated he wants the threshold for children to move towards €500,000.

We’ll have to watch this space to see if the coalition decides to make a change this year.

The government launched its new housing plan this year as well as new rental rules. But there hasn’t been any substantive policy change in recent months.

The Taoiseach has mentioned that a review of the Help-to-Buy scheme could yield some changes, with some criticising that the €30,000 for a deposit should increase, but others say such a move would only inflate house prices.

Speaking to The Candidate podcast, Harris ruled out any change to stamp duty for first-time buyers, despite the Taoiseach saying in April it was worthy of consideration. 

Stamp duty applies to buyers when they purchase a home at a rate of 1% on the first €1 million of the home’s purchase price, rising to 2% from €1 million to €1.5 million, and 6% on any amount thereafter.

First-time buyers were entirely exempt from stamp duty before 8 December 2010, when specific exemptions were abolished to make way for a new and more simple system.

“There’ll be no changes to stamp duty, and the reason I say that is actually be helpful, because if people like me suggest that there might, then all of a sudden it causes a very significant impact on the housing market, and so that’s not a lever I intend to pull,” he said.

One thing you can bank on is the rollout of a new savings scheme.

Harris has said he wants to see the government’s new State-backed personal investment scheme up and running next year.

The plan is to have no entry or exit tax charged on investments made via the government account and instead there will be a “flat rate of annual tax” on an amount “above a certain threshold”.

He did not say what that threshold will be. The details are expected to be ironed out as part of Budget 2027.

The Tánaiste said there is a “lack of an investment culture” in Ireland due to a lack of available products and a tax system that “has not worked” in people’s favour.

Harris has signalled that the government will roll out supports to households to help them transition away from fossil fuels, which could be in the form of grants for the likes of solar panels.

Harris said governments must now incentivise people to make the changes needed to reduce reliance on imported fuels, to reduce their energy bills.

Energy Minister Darragh O’Brien has previously indicated that those in energy arrears could be targeted to get additional supports to move renewable energy.

Harris indicated there are looking at additional practical supports and once-off measures to help people transition at their own pace.

“Households and small businesses cannot be expected to carry the burden alone. Governments must help,” Harris said.

“This means targeted grants, accessible financing, and continued investment in infrastructure – from retrofitting homes to expanding renewable energy and improving our electricity grid,” he added.

The Irish Times reported this week that an increase in the tax on vapes might be on the cards.

Harris said the tax is collected on a self-assessment basis and since its introduction last November, more than €22 million has been collected.

Political leaders have been strong in their condemnation of vapes and have introduced legislation recently to curtail the market. This could be an easy win and money generator for the government.

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