Mini-budget for PAYE workers
Deputy Nash says last October’s budget left working families worse off and calls for an immediate mini-budget and relief on energy costs. The Minister argues recent support packages and broader economic shocks mean the Government must balance help now with other commitments.
PAYE workers need a mini-budget, and they need it now. Last October’s budget, the first of this Government’s new term, managed to pull off a quite extraordinary feat. It committed to spend over €9 billion more than the year before, yet left working families even worse off. This is an unparalleled achievement and all because of choices the Government made. Even before Trump and Israel’s war on Iran, the ESRI, in its post-budget analysis, said working families would be 2% poorer this year, with those who depend on the State for all of their income twice as far behind.
Roll seven months on, and the picture for PAYE workers has worsened considerably. Working people were deliberately misled by Fine Gael before they went to the polls in 2024. The Minister's party said that PAYE tax rates and bands would be indexed every year, making sure small pay hikes would be taken home. Instead, Fine Gael chose an economically stupid tax break for fast food chains and to subsidise the bank balances of developers against all of the expert advice, even from the Government's own civil servants. These are not the actions of a responsible Government.
Three weeks ago, a Government that was close to losing its authority caved in to sectoral interests and shelled out over €700 million to buy their silence for a few weeks. Nobody is saying for one minute that supports were not needed but there was nothing in that deal whatsoever for PAYE workers, and they know it. There was nothing to help with the day to day challenges that now have a permanence about them.
The truth is the Government has abandoned hard-working families on middle and low incomes. Money was no object before the votes were counted in November 2024. No vote buying gimmick was too madcap not to find its way into that year’s pre-election budget in a transparent attempt to buy people's votes with their own money. The message to working people since has been clear: you are on your own. Ireland has the highest energy prices in the EU with a harsh winter ahead. We have had already high grocery prices, rising by a further 6.5% for the basics in the first part of the year. There is no sign of the promised €200 childcare rate and there were shameful sham fights this week over college fees, rather than knuckling down and cutting costs for families
This afternoon, Government will have a chance to show its support for PAYE workers. Labour’s motion makes a very clear ask: do a mini-budget now, and put up to €1,000 into the pockets of average working families by: indexing bands and credits for PAYE workers backdated to January, bringing in a targeted €400 energy credit for households on under €80,000 annually and introduce a €100 groceries supplement to combat high prices at the checkout. In the absence of a mini-budget, it will not be Ireland that will be going nuclear; it will be Irish workers hit with high costs and no sign of relief and respite Does the Minister plan to formally oppose Labour’s motion later and if so, why?
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Again, we all appreciate that we can all see the challenges people are facing at the moment. This has not happened overnight. We have had a series of events that have impacted inflation and our overall prices, from Covid-19 to the war in Ukraine and the most recent crisis in the Middle East where it is being said that if what happened in the seventies was coupled twice with the war in Ukraine, in terms of the impact on and access to fuel and prices, this is worse. We are dealing with what has been a cumulative impact and the need not just for a response of a direct financial support to people, but for structural change and investment. To the Deputy's point, that is exactly what this Government campaigned on, was elected on and what we set out to do in our programme for Government.
We have a programme for Government that is set out over the five years. It is important to stress that it is five budgets over five years. It is not possible to do everything in any one year. What we have been very clear on from this year's budget and will be clear again in the coming weeks and months with next year's budget, is that we want to make sure that with the surplus we have, because of the way in which the economy is managed and of our focus on developing economies and making sure we have money to invest back into our infrastructure and in our services for people who need them most, we are in a position where we can provide support directly to people but also plan for the future and invest in those long-term structural changes while, at the same time, making it easier for those who are working and need our support as well. I appreciate that and we all accept that for those who are working, taking the average household - I hate to use the example we always use of a nurse and a garda, or two people who working in the public sector - we want to make sure people feel the benefit when they take home their pay packets every week or month. We have said we will make changes when it comes to income tax brackets and that is something we are committed to doing. We have made very clear that we have plans when it comes to reducing overall costs for childcare, something that can be like an extra mortgage for people, but that we also need to look at overall access to childcare. That is being worked on at the moment.
People are struggling most at the moment with energy costs and trying to respond to what has been a significant shock during the past few weeks. We have been clear that we want to do two things. We want to continue directly to support people. I do not accept the Deputy's comment that the general person who gets up and goes to work got nothing. The reduction in fuel costs overall was to support the person who gets into their car or gets public transport and goes to work every day. The €750 million package between the extension of the fuel allowance, the direct reduction and, yes, the specific package for the hauliers, farmers and contractors, was provided with a very clear focus on an industry that uses more fuel than ever because of the time of the year and the production they are involved in. We are making sure that, because of the choices we have made in the past and because of the fact we have a surplus, we are investing directly and supporting people as they need it now. We also have significant plans through our investment and infrastructure plan, and other plans whether they be for childcare-----
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-----the delivery of more homes, investment in healthcare and education that we are making permanent invests and permanent savings for people going forward.
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With respect, nothing the Minister has said on the record in response to my question will make it any easier for PAYE workers between now and the budget to get some respite and help with the high energy costs and so on she directly referenced. We can trace all of this back to the poor decisions the Government made in budget 2026. The Government will have an opportunity to make amends for that this afternoon by withdrawing the countermotion and ensuring it sends a signal to PAYE workers and the self-employed that it is for a change in its sights. It has gotten off to a very bad start. Working people are much worse off this year than they were this time last year. They took the Government's pre-election commitments at face value that this would not be the case. I will make a prediction. When a lot of the adjustments that were made in recent weeks are exhausted shortly, the Government will roll them over. The best and most responsible way of organising a financial package is to do so in a responsible, structured way with a mini-budget that is holistically managed and that ensures PAYE workers are looked after and that their interests are prioritised as well over the next few months and in advance of the October budget.
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Working people cannot wait any longer for support.
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In the past few weeks alone, the Government has introduced a support package of €750 million plus. If we were to add another budget, essentially, on top of that before we reach October, what will we trade off here? We fully appreciate we need to support people in the here and now.
To say that nothing is happening and no one is benefiting is inaccurate when the reduction in overall costs for fuel prices impacts every single person who gets in their car or uses public transport. What we need to do when we are looking at energy in particular is change how we build our new homes and retrofit existing homes. The figures alone total some 250,000 households. Many people who get up and go to work have had their homes retrofitted, which is saving up to €1,100 per year. A total of 73,000 homes are already targeted this year for retrofitting and there are 100% grants available for those who need it most. I think about 34,000 households have been provided with that support.
Well before anything happened in Iran, the national energy affordable task force was put together to make sure we can look at overall prices and structure and how we can reduce costs. The initial report recommended that we reduce our VAT on energy and electricity to 9%, and that is a decision that was taken by the Government last year, which will go out to 2030. The new report from this group will be published in the summer. Again, it will look at how we pay for investment in our grid, how we structure our bills and how we can bring down overall costs. A lot of things are happening. The Deputy keeps talking about introducing budgets every couple of weeks. Where is this money coming from? How would we end up having any money to do anything in the budget in October?
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You keep introducing €750 million packages without any-----