1. Introduction

Something for everyone in the audience? Budget 25 was summed up by Irish Times business journalist Cliff Taylor who said, ‘a budget package is all about priorities and it is crystal clear that the priority of Budget 2025 is getting the Coalition re-elected.’

With a funding narrative of €1.4bn in taxation measures and new expenditure of €6.9bn Jack Chambers was carrying the weight of his party's electoral expectations on his shoulders., as he got to his feet to deliver his first Budget. The youngest Minister for Finance in more than a century, the 34-year-old said that the Budget includes a cost-of-living package ‘designed to support the most vulnerable and ease the financial burden over the winter months.’

The Minister said that inflationary pressures have "eased considerably" over the past year with Minister for Public Expenditure Paschal Donohoe stating that he "recognises the challenges confronting so many of our citizens".

Signposting a positive outlook for the economy Minister Chambers said that the level of employment in Ireland is set to increase by almost 110,000 in the two-year period to end-2025 and the rate of unemployment is to projected to remain low "at around 4.5%".

The headline announcements on cost of living payments, tax give aways. Infrastructure spending and another attempt at addressing the housing crisis is integral to the government’s strategy of seeking to provide opportunities, alleviate challenges and leave a pleasant after taste in advance of the upcoming election.

However, with inflation having fallen sharply in recent times, the significant once off cash injection in the budget has engendered criticism with many stating it could’ve been approached in a more prudent way not least by targeting specific groups through the welfare system.

2. Headline measures

• A €2.2bn cost of living package including universal electricity credit of €250 in two payments of €125 each — one this year and one next year.

• USC to drop to 3% and higher rate of tax to rise to €44,000.

• Reduced VAT rate of 9% on gas and electricity to be extended until April 30 2025.

• Carbon tax will go up €7.50 with over €3bn set aside to invest in climate transition and preparing for a greener future.

• Two double payments of child payment in November and December and €400 lump sum payment to recipients of the Working Family Payment.

• €14bn Apple tax windfall will be invested in water, electricity, transport and housing to "ensure the further development of our society".

• Rent tax credit increasing by €250 to €1,000 for 2025, Mortgage interest relief extended for another year; stamp duty on bulk purchases of homes to increase from 10% to 15%.

• €1bn allocated to Irish Water to address domestic wastewater pressures.

• Help to Buy Scheme has been extended until the end of 2029.

• €1.25bn of additional funding for the Land Development Agency.

• €3bn from sale of State’s AIB shares for infrastructure spending.

• €750m for further development of electricity grid infrastructure.

Infrastructure

• In relation to infrastructure, as above,, the Minister said there will be investment in water, electricity, transport and housing. "Investing in these areas will support the needs of our people, assist in growing our economy, and help in meeting our climate and nature goals,".

• The minister said that money is being invested "well above the national average" through the National Development Plan.

• An extra €1.7bn will be provided next year for more homes, schools and hospital infrastructure and also to tackle climate change.

• Total capital investment for infrastructure will be nearly €15bn

Tax

• Amendment to the Capital Gains Tax relief targeted at investors in innovative start-ups to provide for an increased lifetime limit on gains to which the relief applies from €3 million to €10 million.

• The VAT registration thresholds for the supply of goods and services are to be raised - The registration thresholds are currently €80,000 and €40,000 respectively, and will rise to €85,000 and €42,500 respectively.

• Employers will now also be able to give employees tax free bonus up to €1,500, up from €1,000.

• Increase in the first year payment threshold in the R&D tax credit, from €50,000 to €75,000, to provide further cash-flow support to those companies undertaking smaller R&D projects or engaging with the credit for the first time.

• Minister Chambers said he is increasing the main tax credits, the Personal, Employee and Earned Income Credits, by €125.

• The USC - the 4.0% rate is reduced to 3%.

• As of 1 January 2025, the national minimum wage will increase by 80 cent per hour to €13.50 per hour.

Climate / Sustainability

• The Carbon Tax will go up from €56 to €63.50 per tonne from October 9

• Over €3bn is being set aside to invest in "climate transition and preparing for a greener future" between 2026 and 2030.

• Half of the €951m from the Carbon Tax will be used for "improving energy efficient in our homes".

• The VAT rate on Heat Pumps will reduce from 23% to 9%.

• In relation to battery electronic commercial vehicles, there will be an amendment so that people can qualify for the €200 VRT rate.

• An "emissions based approach to VRT for B commercial vehicles", will be implemented, a measure which will provide for a lower 8% rate for category B vehicles.

• €716 million is being provided for farmers taking part in agri-environmental schemes such as ACRES.

Childcare

• Parents will receive two double Child Benefit payments in November and December. There will also be a double payment of the Foster Care Allowance. A €400 lump sum payment will be made to recipients of the Working Family Payment.

• There will also be a €100 lump sum payment per child to recipients of Qualified Child Increase payments.

• Funding for the National Childcare Scheme will increase by 44% reducing full time childcare costs by €1,100 next year.

Transport

• €3.9m budget for the Department of Transport announced

New measures include:

• Enhanced capacity on existing public transport routes;

• Ongoing investment of almost €1m per day in cycling and walking infrastructure;

• Continuation of temporary fare initiatives on public transport to the end of 2025, including the Young Adult Card for 19 to 25-year-olds and the 90 minute fare.

• Free public transport to be extended to children aged 5 to 8-year-olds.

• In relation to the Benefit-in-Kind (BIK) regime for company cars, the temporary universal relief of €10,000 to the Original Market Value (OMV), which was first introduced in 2023, is being extended for a further year.

• For an employee with an electric company vehicle, they will have an overall BIK relief of €45,000 in 2025 which comprises of the €35,000 electric vehicle specific relief (already in legislation) plus the additional temporary universal relief of €10,000.

• There will also be a BIK exemption for the provision of electric vehicle chargers at the home of a director or employee.

• The Motor Insurers Insolvency Compensation Fund levy will be reduced from 1% to 0% from 1 January.

• New transport measures include free transport for under 9s

Housing

• A further €1.25bn will be made available to the Land Development Agency, bringing the total amount of funding to the LDA to €6.25bn.

• The Help to Buy scheme is being extended until the end of 2029.

• Extension to the relief for pre-letting expenses for landlords which will continue for three more years, until the end of 2027.

• The Department of Housing, Local Government and Heritage is being allocated €7.8bn in Budget 2025.

• In an unexpected move, people buying properties over €1.5m to 6% effective tonight.

• The existing rate of 1% will be kept on homes up to €1m and 2% on properties between €1m and €1.5

• Mortgage interest relief will also be extended for another year

Energy

• €750 million allocated to facilitate an initial, direct equity injection to support capital spending on the further development of the electricity grid infrastructure.

• Proposal to extend the 9% reduced VAT rate for gas and electricity for another 6 months to 30 April 2025.

Hospitality

• The hospitality industry lost its argument for a 9% VAT rate.

• Paschal Donohoe confirmed there will be an Energy Subsidy Scheme for hospitality and retail businesses worth €170m. This will provide support for 39,000 firms.

Agriculture

• More than €2bn is being allocated to the Department of Agriculture, Food and the Marine for 2025.

• There will funding for a range of supports across sectors, including:

• €30m for a new tillage scheme supporting farmers to plant their field crops

• €10m for animal health measures improving biosecurity

• €22m for the continuation of the National Sheep Welfare Scheme into 2025; and

• €8m to enhance payment rates on the National Beef Welfare Scheme.

Enterprise and Skills

• Over €1bn will be invested in the Department of Enterprise, Trade and Employment's Jobs and Enterprise Development, Innovation and Commercialisation and Regulation Programmes in 2025.

• Capital funding will be made available to enable IDA Ireland and Enterprise Ireland to provide additional environmental aid to their clients and almost €7m in additional funding to the Department's Regulatory Bodies and Agencies.

3. Reaction:

While the government is advocating for the positive impact that Budget 25 will have on assisting children, families, the economy and the planet, the reaction, as expected, from the opposition most notably Sinn Fein has claimed that the budget is unfocused and not suitable enough to tackle the problems facing people in health and housing. From a business perspective, the hospitality sector is critical with the Licensed Vitners Association stating it was regarded as an ‘economic afterthought’ while IBEC was much more positive citing the ambitious scale of investment outlined in the budget. See reaction below:

Sinn Féín

• Sinn Féin's finance spokesperson Pearse Doherty has slammed Budget 2025, saying: "There's no big idea coming from Government, despite the masses of resources."

• Pearse Doherty dismissed the Budget as "spin" and the Government as "serial wasters" who treat people with "contempt".

• Mr Doherty stated the government is “incapable of delivering real change.”

• Sinn Féin's Rose Conway-Walsh has accused the Government of trying to "buy Irish citizens with their own money".

Labour

• The Labour Party finance spokesperson, Ged Nash, has accused the Coalition of showing "utter disrespect" for the Dáil and backbenchers in the manner in which Budget 2025 has been widely leaked.

• Mr Nash added, “This government’s ideology has made this rich country feel so poor.” And Ireland is "very rich country with poor and patchy public services".

Other Parties

• The Social Democrats finance spokesperson Róisín Shortall has described Budget 2025 as "... looking very like a Bertie Budget: spray money around and hope it's enough to win the election."

• People Before Profit TD Richard Boyd Barrett has said Ireland's problems will not "be solved despite all this money" available to the Government.

Businesses

• Irish Small and Medium Enterprises Association welcome €3bn for infrastructure spending ISME, the Irish Small & Medium Enterprises Association, said: "Disposal of AIB shares will generate €3bn for infrastructure spending. €1bn to Irish Water, €1.25b to Land Development Agency for housing. €750m to upgrade electricity grid."

• Ibec has welcomed the “ambitious” scale of the investment outlined in the Budget, stating, while cost competitiveness challenges remain a concern, Budget 2025 is making the right signals towards a more realistic and sustainable path forward for businesses worried about rising cumulative costs.”

• The Irish Hotels Federation stated, “it is becoming increasingly clear that Government policies are now fundamentally at odds with the long-term interests of our sector and wider tourism industry.”

• Donall O’Keefe, chief executive of the Licensed Vintners Association (LVA), expressed dismay that the 9 per cent Vat rate was not restored for the sector in Budget 2025.

• Mark Reynolds, managing director of Savills Ireland, said that the stamp duty increase to 15 per cent will have limited impact in boosting the availability of housing for first-time buyers and risks exacerbating an “already challenging environment” for institutional investors.