Well, there’s only one show in town: Budget 2023, with all its billions, is here.
After a frantic day on Monday, nearly every measure is now confirmed, agreed and public ahead of the Cabinet meeting this morning. There will be little left for Michael McGrath and Paschal Donohoe to surprise us with.
But what a dizzying array of budget baubles was briefed out across the day yesterday, childcare fees slashed; hundreds of millions for businesses; personal tax cuts. Even across Sunday and Monday, spending seemed to grow — what started life as a tax break for renters worth as little as on Sunday €200 morphed into two €500 payments by Monday evening. An exhaustive look at what we know so far is here.
It’s an astonishing assortment of concessions and breaks — many universal, or with only loose controls over who receives them. During the summer, the Government decided that the energy crisis was shifting to emergency mode — Budget 2023 is firm evidence of that.
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But in many ways it was a budget of contradictions. Even with money to spend McGrath has apparently been tense and wary throughout meetings (“not everything can be a priority,” is one mantra, apparently), emphasising that the room for permanent spending increases is extremely limited — pushing people towards one-off measures.
And notwithstanding the scale — both the Government and the Opposition know it won’t be enough to protect households and businesses from the energy bills coming their way this winter.
The budget contains a number of complex schemes, some totally novel, and some designed or pump-primed at breakneck speed in recent weeks — and days. The Coalition will hope its interventions work as intended (and receive public and stakeholder approval) — especially on the big-ticket items of welfare and childcare reform, business supports and rental breaks. What are the chances that they get everything right, with so much to balance? Just a few areas of risk: backbencher and industry blowback if they follow through on killing the 9 per cent VAT rate for hospitality; even the perception of overpromising and underdelivering on childcare costs; renters feeling short-changed by the size of their tax break; record welfare increases failing to do enough to protect vulnerable cohorts or appease key constituencies in the NGO sector — or the Greens.
It’s tempting to get blown away by the sheer scale of the budget, and the pace at which it evolved. But whether it’s equal to the challenge of the coming winter remains to be seen.
Kwarteng’s mini-budget sparks major drama
Keeping with the budgetary theme: no matter what comes to pass, it would be hard to imagine a fallout from the Irish Coalition’s budget quite as dramatic as that which followed UK chancellor Kwasi Kwarteng’s first intervention. The pound has been monstered by the markets, prompting statements from the Bank of England on Monday, and the treasury, desperately trying to steady the ship. Kwarteng’s strategy of trying to sugar rush the UK economy to the point where it achieves escape velocity from the economic doom and gloom appears to be badly backfiring, at least for investors. Irish exporters, and the Government, will be nervously watching on to see how the economic — but also the political consequences play out as things become ever more brittle across the Irish Sea.
BEST READS
Our budget lead is here.
Cliff Taylor’s take on the UK’s mini-budget is here.
Fintan O’Toole on Northern identity and Irish unity.
Our editorial on victory for the “postfacists” in Italy is here.
Naomi O’Leary reports on a hawkish stance from Ireland in Europe.
PLAYBOOK
If it’s the centre of the political calendar, it’s going to be the only story in town today. The budget will be sent to a Cabinet meeting convening at 10am for approval, after which the Dáil will pack out at 1pm to hear Donohoe deliver his speech at 1pm. McGrath will follow, with both expected to speak for about 45 minutes. The rest of the day will be taken up by Opposition spokespeople “responding back”, as Donohoe might say, to the budget. Financial resolutions are at 8.30pm.
Statements on the budget in the Seanad are from 5pm-9pm, when it adjourns.
Away from the houses, Cabinet Ministers will begin holding their budget day press conferences as the Government goes into overdrive, thrusting its chest out and pointing out its many achievements — and Ministers do their best to apply as much topspin to their own allocation as possible.
There was due to be one committee of note tomorrow, with the ESB in front of the environment committee at 11am, but it was cancelled due to the budget. Nonetheless, you can pretend you’re there as the tireless Cormac McQuinn has the details of what would have been said if they were there to say it.
