Budget 2023: €11 billion package falls short of the mark for many

This year’s Budget 2023 has been presented in the Dáil, having been brought forward by two weeks due to the ongoing cost of living crisis, but appears to have missed the mark for many.

The Budget overall totalled €11 billion, with the once-off measures coming to €4.1 billion. These once-off measures have been criticised as short-sighted and there are fears that they will not fix problems long-term. 

A conservative Budget

However, Mary Cosgrave, a lecturer in Tax and Accounting and Programme Director of the Bachelor of Commerce(Accounting) at the University of Galway, stated: “Despite being an €11bn “giveaway” budget, Budget 2023 was in many ways quite a conservative one.”

“The Government was reluctant to commit to long-term increases in welfare payment or tax cuts, preferring to give once-off cash payments or reductions in costs where possible. We see this in the planned €600 in payments to households to offset rising energy costs and the one-off reduction in the student contribution fee of €1,000,” continued Ms Cosgrave.

Ms Cosgrave also stated that those who earn individual incomes of €40,000 or more would benefit the most from income tax measures. In regards to renter tax credits she said: “It is unclear whether the credit will apply only to cases where the taxpayer pays rent for themselves or if it will be extended to cases where, for example, a parent pays rent for their college-going child.”

She also stated that the vacant home’s tax “sounded more promising than it turned out to be”. And went on to say it would “do little to encourage the sale of second-homes or properties used for Airbnb lettings”.

Ms Cosgrave pointed out that tax was only one side and that those who wouldn’t benefit directly would benefit in other ways, such as reduced childcare costs or the extension of the GP-only card.

“This was not a transformative budget, but rather a placeholder to get the State to a position next year where hopefully the war in Ukraine will have ended, prices will have stabilised, and the expected loss of corporation tax receipts will be able to be calculated with more certainty,” concluded Miss Cosgrave.

“Not a step in the right direction” – Students’ reactions

Students are also set to benefit greatly with a 1,000 euro reduction in the student contribution, double payment of the SUSI grant, and an increase to the postgraduate fee contribution grant.

However, students have negative reactions concerning both those measures and Budget 2023 overall.

One student from the University of Galway, who preferred to be kept anonymous, said that the 1,000 euro reduction, “is gladly welcomed by all students. The fact that it’s not a permanent measure is frustrating and not a step in the right direction.”

They also added that while the Vacant Homes Tax is valid in theory, “I’m not sure how it will work in practice as it’s though self-assessment, and how do you prove you’ve lived in the place for less than a month, such as holiday homes.”

Another University of Galway student who also wished to be kept anonymous described the budget as frustrating and said “normally we as students aren’t ever considered in the budget, which is frustrating because we’ll be the ones paying the budget off in the next couple of years.”

They also pointed out that the allocated €58 million towards mental health services was a low figure in their opinion. “There’s a correlation between no mental health services and people being depressed as a result and finding it hard to go to work. When you’re not working, you’re not getting money,” they stated.

“If you’re not getting money, you’re not spending it, which isn’t good for the economy. There could be more money going towards these services which affect every age category.”

More Budget news on Galway Pulse here.

You can view this year’s official Budget documents here.