A Cheann Comhairle,

Once again, we stand to deliver a Budget against an extraordinary backdrop of uncertainty and challenge. We know that many of our people are finding it very difficult to make ends meet, face difficult choices in their daily lives, and are seeing their household bills rise seemingly by the day. We know that many are genuinely worried about what lies ahead in the months to come. We know too that many of our businesses that survived Covid, with Government support, now face a new, serious threat in the form of dramatic energy price increases.

Our experience over the last three years, and the manner in which we collectively responded, demonstrates our resilience as a nation. We continue to navigate the uncertainties of Brexit, we got through the long, dark days of Covid, and we are responding with compassion and resolve to the dreadful invasion of Ukraine. We are doing this together, both here in Ireland and in co-operation with our international partners.

These are not normal times. The war in Ukraine continues to have far reaching ramifications across so many areas of life as we know it. We have not experienced inflation like this for 40 years. Broad based inflation – such as what we are currently experiencing – impacts negatively on living standards across the board, and requires a carefully balanced response. At times such as this, people understandably look to their government for direction, for reassurance, and for meaningful help.

Today, we are responding. This is a Budget for its time, a Budget that seeks to respond with unprecedented resources, with a breadth of measures, and a speed of execution we have not seen before.

We do not suggest that this Budget will meet every need. That would not be possible. It is in everyone’s interests that our national finances are managed carefully, and that we guard against current and future risks. But this Budget will make a difference, and people will see that difference quickly.

We should not forget that the scale of response we are bringing forward today is possible only because of the strong and swift rebound in the economy and our public finances. We should never put at risk or take for granted the pro-enterprise policies that underpin our economic success as a country.

A Cheann Comhairle,

This Government has proactively responded throughout the past 12 months with a range of tax and expenditure measures, totalling €3 billion, to alleviate pressure on households and exposed sectors of the economy.

Today, Minister Donohoe and I are announcing further winter cost of living, business and public service support measures totalling €4.4 billion comprising €1.7 billion to be administered through the tax system and €2.7 billion of spending measures, with €0.3 billion of this amount being funded from the contingency reserve.

This is in addition to a core Budget 2023 package of €6.9 billion – €5.8 billion in expenditure and €1.1 billion tax.

The expenditure measures I outline today are threefold. They comprise:

Turning first to the measures to be implemented this year:

The total value of the new cost of living measures for households is €2.2 billion and will provide much needed help to individuals and families.

This package of measures has been designed to alleviate the financial burden faced by all households, but in particular to provide extra assistance to those who need it the most.

In addition to the need to provide cash support for households, I am also acutely aware of the pressure that rising prices – in particular energy costs – are putting on the delivery of vital public services. I am allocating additional funds in 2022 across a number of different areas in order to ensure continuity of service delivery.

I am making €100 million available in 2022 to ensure schools are supported in dealing with the energy cost pressures they will face in the months ahead, and to support school transport providers. An additional €10 million will also be provided for further and higher education institutions.

I am allocating €60 million to Local Authorities, and €110 million to a range of Health funded bodies including nursing homes, hospices and Section 39 organisations. This additional funding for the health sector will provide further once-off support in 2022 for organisations that deliver important services across areas such as disabilities, older persons and mental health, in the context of the significant challenges being faced currently.

Not-for-profit and voluntary organisations in the Arts, Sports, Gaeltacht and the Community and Voluntary sector, are woven into the fabric of community life across Ireland, but they are very vulnerable to the severe impact of increased energy bills. I am making €60 million available in 2022 to ease the pressures in these sectors. The framework for this assistance will be put in place in the next few weeks to ensure that they benefit this year.

A Cheann Comhairle,

In addition to the measures I’ve already outlined for the remainder of 2022, I am also providing significant support throughout 2023 through the social welfare system. It is appropriate that we target our supports most strongly to those who need it the most.

Taken together, the measures we are rightly introducing this year and in 2023 represent very substantial State support for the most vulnerable.

By means of example – a single pensioner, living alone, in receipt of Fuel Allowance will receive an additional €2,375 between now and the end of 2023 as a result of the announcements I am making today.

Childcare is a basic necessity for tens of thousands of families throughout Ireland. The cost of childcare for many of those families is too expensive and, at a time of rising household bills, the pressure this cost places on many families is considerable. Today, I am providing the funding to support a reduction of up to 25% in the weekly fee for those availing of the National Childcare Schemecosting €121 million.

This measure will put, up to €175 a month or €2,106 a year, back in the pockets of parents next year.

I am making a further allocation of €59 million to the recently established Core Funding model which will provide for extra hours and enhanced capacity in the sector.

Under the new Employment Regulation Order, those working in the childcare sector will see improved pay and conditions to better reflect the importance of the work they undertake in providing quality care for our children.

In 2023, the childcare Budget will reach €1 billion – five years ahwead of target. Alongside the measures announced last year, this finding will help to make childcare more affordable, improve the wages of staffg and help ensure the sustainability for childcare providers.

In recognition of the cost of living pressures faced by students and their families, I am providing funding in 2023 to reduce the Student Contribution Fee by €500 for eligible families earning between €62,000 and €100,000. The income limit to qualify for a 50 per cent reduction in contribution fees under SUSI will be increased from €55,240 to €62,000 and all SUSI maintenance grants will be increased by between 10 and 14 per cent in September 2023. The Post-Graduate Fee Contribution for eligible students of €3,500 will increase by €500 and the phD stipend will increase too. Further details of these measures will be announced by Minister for that Department.

Further details of additional cost of living measures are provided in the Budget 2023 Expenditure Report prepared by my department and published on gov.ie.

A Cheann Comhairle, turning to wider spending measures, in the current uncertain environment, a managed adjustment to our medium term expenditure rule is an appropriate response to the extraordinary circumstances we now face. The medium term budgetary strategy has been adjusted on a once-off basis for 2023, to allow core public expenditure to grow by 6.3 per cent.

Overall, in 2023, I am providing €90.4 billion in public expenditure. €85.9 billion of this is core expenditure. This is facilitating a €5.8 billion expenditure budgetary package in 2023.

This includes an additional €800 million which will be made available under the National Development Plan for core capital spending to help in delivering the largest, greenest and most ambitious infrastructure plan in the history of the State.

We continue to deal with the aftermath of the pandemic, the repercussions from Brexit and the effects of the war in Ukraine. I am therefore making provision of €4.5 billion for potential non-core expenditure in 2023, €1.8 billion of which will be allocated to departments with the remainder held centrally in reserve.

Housing remains a key priority for this Government. Through Housing for Alland the National Development Plan, the Government has committed a record €4.5 billion next year in public funding for the provision of more social, affordable and cost rental homes.

After over a decade of undersupply, we are now seeing significant progress. We have seen the highest number of housing completions in over a decade and the highest number of first time buyers in fifteen years, with 16,000 purchasing homes in the past 12 months.

It is clear, however, that more needs to be done. For many, rents are too high and the hope of owning their own home seems out of reach.

It is an objective of this Government is to provide opportunity for those who aspire to home ownership. We have launched the new First Home “Shared Equity” Scheme and Minister Donohoe has today announced the extension of the Help to Buy scheme.

This Government continues to support Housing for All with unprecedented levels of current and capital funding. Next year, I am allocating a record €6.2 billion in Exchequer funding to the Department of Housing, Local Government and Heritage of which the majority, €3.5 billion, will be capital investment.

€1.7 billion will be allocated to the Department of Housing in 2023 to deliver the social housing new build target of 9,100 homes.

I am announcing a €99 million increase in funding for existing schemes, including the Social Housing Current Expenditure Programme which will support nearly 6,500 additional new social housing units, through Approved Housing Bodies (AHB) new build delivery and leases.

In total in 2023 there will be €215 million, an increase of €40 million, allocated to three key affordable schemes; the Local Authority affordable purchase scheme, the AHB Cost rental scheme and the national First Home Shared Equity scheme. These schemes will support the delivery of over 5,000 affordable homes next year.

I am also providing €215 million for homelessness services. This is a €21 million increase in the homelessness provision and will provide assistance to those who are most vulnerable in our society.

There is an unprecedented €87 million being allocated to the retrofitting of social housing in 2023.

€61 million is being allocated to schemes to tackle vacancy and promote regeneration in urban areas by addressing vacant social homes and funding the Croí Cónaithe schemes.

Further measures through the Department of Housing, Local Government and Heritage include:

The last number of years have been an extraordinarily challenging time for the health service, and the Government has responded with record levels of investment. This allowed us to deal with the immediate impact of COVID-19, significantly expand core services, and accelerate Sláintecare reforms so that we emerge from the pandemic with a much more resilient and responsive public health system.

The expansion in capacity has been unprecedented in its scale and speed, with approximately 15,000 new staff and 2,000 new hospital and community beds having been added across the health service since the pandemic started.

Budget 2023 continues this very high level of investment in our public health system by providing for a total allocation of €23.4 billion. This provides for a €1.15 billion increase in core current funding, a 2023 COVID allocation of €757 million, and an additional €117 million as part of agreed NDP allocations for the delivery of additional health infrastructure.

This budget will allow for the continuation and consolidation of public health system capacity expansion in line with Sláintecare. Significant progress will be made through the delivery of 650 acute and community beds by the end of 2023.

Funding is also provided for the recruitment of up to 6,000 additional staff to further enhance capacity and improve access across a wide range of acute and social care services. This builds upon two record years for recruitment in the health system.

The Government is committed to further tackling waiting lists that have been impacted by the pandemic and has demonstrated this through the significant level of funding provided for the Waiting List Action Plan that is being implemented this year.

To ensure that progress continues, I am allocating a further €225 million in Budget 2023 to provide for an overall package of €443 million for waiting lists next year. This will fund the continuation of measures designed to reduce waiting times for outpatient, day-case and inpatient care, improve access to community diagnostics, and address backlogs in the provision of Assessments of Need for people with a disability. €5 million has been provided in additional funding for our oral health services on a recurring basis as well as a specific once-off provision this year of €9m within the overall waiting list fund to address oral health backlogs.

Continuing the progress made over the last few years as part of the Sláintecare reform programme, Budget 2023 will enhance access to vital services by reducing financial barriers to care, which is particularly important given the cost of living increases being experienced throughout society.

In line with government and Sláintecare commitments, funding has been allocated to address health charges and expand eligibility by:

Finally, Budget 2023 provides funding for the ongoing necessary public health response to COVID. €439 million of the COVID allocation in 2023 will be used to continue funding public health measures such as PPE, Testing & Tracing, and Vaccinations.

For generations, Ireland has been renowned internationally for the high calibre and quality of our education system. It is important that while we may face temporary pressures, we continue to invest in our education system, in our children, in our future.

To that end, today I am allocating €9.6 billion to the Department of Education in 2023, including a capital budget of €860 million.

This allocation will support the continued progression of the around 300 building projects that are currently at construction. The continued rollout of the NDP will involve a further 150 school building projects that are currently at advanced design or tender stage commencing construction over the course of 2023. A strong focus of the school building programme is delivering additional capacity for special classes, particularly at post-primary level and also for special schools.

This Government has prioritised Special Education. The last three budgets have delivered over 3,300 additional SNAs and over 2,000 additional special education teachers. Today’s Budget allows for 686 additional teachers to support those with special educational needs in special classes, special schools and mainstream settings. With an additional 1,194 SNAs, this will be the highest number of SNAs we have ever had in our education system at over 20,300.

I am pleased to confirm funding for a reduction in the staffing schedule by 1 point for all primary schools, which is the lowest in the history of the State, providing 370 additional teacher posts. This builds on the previous two budgets and reduces the pupil to teacher ratio further.

A Cheann Comhairle, we know that buying school books can add further pressure to families at an expensive time of the year as children go back to school. Today, I am providing funding for free school books for all pupils in recognised primary schools within the Free Education Scheme from September next year. This measure will benefit well over a half a million pupils all across our country, and is a reflection of the value we place on an education for all. The Department of Education will work closely with schools and other stakeholders in the coming months on the implementation of this major reform.

In recognition of the ongoing impact that COVID related school closures and disruption has had on our school system, I am providing funding for the continuation of the Enhanced Summer Programme for a further year, as well as other wellbeing and inclusion supports.

Investing in our further and higher education and research sector is priority for the Government and is essential if we are to maintain a modern, knowledge-based and innovative economy. In 2023, I am allocating €3.9 billion to this sector.

Reflecting its vital role, I am providing €150 million over 2022 and 2023 in additional funding to strengthen the financial position of higher education and to ensure its long-term sustainable funding.

In order to deliver on the Housing for All and Climate Action plans, we need to invest in skill through apprenticeships and further education and training. I am providing funding for 4,800 additional apprenticeship places and 4,000 registrations. I am also providing over 11,000 upskilling and reskilling opportunities for those sectors most impacted by Brexit and over 2,000 Skillnet places in sustainable finance, green tech and climate change.

A strong enterprise base is fundamental for the success of any economy. Today, I am allocating an additional €36 million to the Department of Enterprise, Trade and Employment, supporting investment in areas such as digitalisation and the green economy.

Our businesses must be innovative to avail of the opportunities of tomorrow and continue to drive growth. Today’s Budget will enable Enterprise Ireland to enhance their science and technology programmes. It will also allow further calls to take place under the Disruptive Technologies Innovation Fund.

The work of the IDA in attracting foreign direct investment has led to the creation of high skilled and well paid jobs. This budget will support the IDA property programme and investment in Advanced Manufacturing.

The micro and SME community are the backbone of the economy, providing employment across every town and village. Increased funding for Local Enterprise Offices under this budget will deliver on the Programme for Government commitment to expand the current service provision to those companies with more than 10 employees. It will also allow for the continued roll-out of the energy efficiency scheme for small firms.

In addition to the Temporary Business Energy Support Scheme announced by Minster Donohoe today, the government this morning approved a Ukraine Enterprise Crisis Scheme worth €200 million for firms operating in the manufacturing and/or internationally traded services sectors.

This Government remains committed to delivering the €165 billion National Development Plan. In overall terms, over €12 billion will be available next year for vital infrastructure investment. To safeguard the delivery of key projects, I announced changes to the Public Works Contract during the year to meet the challenge of rising energy and construction material prices.

In addition, my Department is continuing to engage with the construction sector to increase digital adoption and establish cleaner, greener and more modern methods of construction.

A Cheann Comhairle we stand at a crossroads in global affairs. We are, along with our European neighbours, in the midst of what is certainly the greatest crisis in global energy markets since the 1970s, perhaps ever.

If there is one silver lining to this, it is that there is broad agreement on the solution to the crisis. We need to reduce our dependence on energy imports, particularly from Russia, by becoming more efficient in how we use energy and especially by accelerating the shift to renewable energy, in line with our existing climate goals.

Making progress will of course require funding. That is why I am providing €850 million in capital investment to the Department of the Environment, Climate and Communications in 2023.

€337 million of this funding will go towards grants for energy efficiency. This will fund over 37,000 home energy upgrades including households in, or at risk of, energy poverty through the Warmer Homes Scheme.

This is the highest funding ever commitment to energy efficiency.

Alongside the grant supports that will be available, funding will also be provided to support the introduction of a new low-cost loan scheme for residential retrofit.

As set out in the Programme for Government, every additional euro raised in carbon tax will be returned to the people of Ireland through energy efficiency upgrades, social protection schemes to protect the most vulnerable and measures to incentivise farming in a more environmentally friendly way. An additional €211 million will be made available in 2023, bringing the total carbon tax revenue available in 2023 for investment to €623 million.

Almost half of the €623 million in funds raised by the carbon tax will be invested in improving the energy efficiency of our homes.

Targeted social welfare measures will also be undertaken such as an increase to the Qualified Child Payment and increases to both the threshold for eligibility for the Working Family Payment and the means limit applied to eligibility for Fuel Allowance. The total investment in these three measures alone is estimated at €57 million in 2023. This will be part funded by carbon tax receipts. In total, the carbon tax will fund €218 million of social protection spending in 2023.

€81 million in carbon tax funding will be provided to the Department of Agriculture, Food and the Marine in 2023. This increased funding will be used to fund the new agri-climate rural environment scheme detailed in Ireland’s Common Agricultural Policy (CAP) Strategic Plan 2023. This will support up to 50,000 farmers who undertake actions that will support improved outcomes on biodiversity, climate, air and water quality.

The National Development Plan (NDP) sets out national investment priorities for the transport sector to 2030. I am allocating €3.5 billion inclusive of current expenditure to the Department to support the delivery of a range of projects next year.

I am allocating €2.6 billion of capital funding to transport, this represents the highest level of capital investment since 2008. This will help us to progress key transport infrastructural projects including BusConnects, MetroLink and the DART+ Programme. This investment in our transport network, the reductions announced in passenger fares, and the continued roll out of Electric Vehicle grants will greatly assist us in meeting our ambitious climate targets.

As well as offering educational and recreational opportunities to rural Ireland, the National Broadband Plan provides households throughout the country with the ability to take up remote work. The implementation of the Plan has passed 75,000 households, with funding of €217.5 million allocated in 2023 to reach a target of up to 185,000 households by the end of next year.

The importance of having a strong sense of community was never more evident than over the past two years. Now in the aftermath of the pandemic, the emergence of the hybrid working model has re-invigorated many rural communities. Connectivity, through rural connective hubs, as well as connecting rural communities through transport services is key to keeping our rural communities alive.

The Government continues to be committed to our rural communities and so I am providing an investment of €390 million for Rural and Community Development. This funding will help deliver on key commitments set out in Our Rural Future and the National Development Plan as well as an inclusive and regionally balanced recovery and remote working capabilities.

In addition to the core funding for 2023, I am providing €11 million for the continued response to the Ukrainian refugee crisis at community level to help integrate arrivals from the Ukraine into local communities.

Recognising the increased cost of living for all sectors €10 million is also being provided directly by the Department for immediate supports to community groups to assist in managing increased costs.

Agriculture is arguably the most important sector to our rural economy and is centred at the heart of many towns and villages across Ireland.

Today, I am allocating €2.14 billion for the Department of Agriculture, Food and the Marine for 2023, an increase of €283 million on the 2022 allocation.

2023 is a significant year for the sector with the commencement of the new almost €10 billion CAP Strategic Plan, CAP 2023-2027. Over €500 million of the allocation will further strengthen the sustainability of Irish agriculture and drive the sectors climate ambition.

The agri-food sector is an important contributor to our rural and national economy. In recognition of its exposure to the potential adverse impacts of Brexit, I am allocating €238 million from the Brexit Adjustment Reserve (BAR) for measures to alleviate the impact of Brexit on the Sector.

In line with the Programme for Governments undertaking on Carbon Tax, the 2023 portion of the Carbon Tax Funds for Agriculture are included in the allocation for the new ACRES agri-environmental scheme as part of the CAP Strategic Plan 2023-2027.

I am providing an additional €150 million for the justice sector in 2023 to enable continued investment in existing services and new measures.

High visibility policing is crucial to making sure that communities across the country are safe, and feel safe. That is why we need to continue to strengthen An Garda Síochána as they protect and serve us.

I am pleased to announce today that funding is being made available to recruit a further 1,000 Gardaí into the Garda College next year. An additional 430 Garda civilian staff will also free up more frontline Gardaí for core policing duties.

A new recruitment campaign next year will also help us guarantee that there are 200 new recruits entering Templemore every three months over the coming years.

In addition, a €5 million increase in the overtime budget for An Garda Síochána – to over €100 million – means that Gardaí will be deployed as needed to tackle crime and anti-social behaviour in our communities.

Funding for justice also supports the delivery of an ambitious five-year programme of reform to address service demand and support the establishment of a new statutory agency for domestic, sexual and gender based violence.

Additional funding is also provided for

Defence is also receiving a significant increase in investment of €67 million in 2023, to nearly €1.2 billion.

This year, the Commission on the Defence Forces recommended transformational changes to Ireland’s Defence Organisation. This allocation will include pay and allowance enhancements for serving members of our Defence Forces, the establishment of new transformation posts to lead this change and the provision for the recruitment, training and support of a projected 400 additional members of the Permanent Defence Force in 2023.

The capital allocation for Defence will increase by €35 million or 25 per cent to €176 million. This is a step change in capital funding for Defence, and will be used to prioritise the development of a Primary Radar capability to secure our airspace and upgrades in Force Protection and Defence Forces infrastructure projects.

2023 is the 50th anniversary of the Government’s development programme, Irish Aid. I am very pleased that we will mark this anniversary by increasing total support for Official Development Assistance to over €1.2 billion in 2023, an increase of €177 million on 2022. The overall increase includes an additional €100 million for Irish Aid, representing a 17 per cent year on year increase.

We are resolute in our solidarity and support for the people of Ukraine against Russian aggression. €75 million of the increased funding for Official Development Assistance in 2023 will be to provide a response to the humanitarian needs within Ukraine and its immediate neighbours, as well as a response to the wider food security consequences of the invasion, most notably in Africa and parts of the Middle East. In view of the urgent need, I am allocating a further €30m to the Department of Foreign Affairs this year. This funding will be used to provide additional humanitarian assistance for victims of the devastating food security crisis in the Horn of Africa.

The Tourism, Culture, Arts, Gaeltacht, Sports and Media sectors are progressing through the post COVID-19 pandemic recovery phase. With the easing of restrictions, attendance and participation rates have improved, though they remain below pre-Covid levels.

I am conscious of the need to provide support again in 2023 for these sectors. Therefore, as well as providing an additional €45 million in core funding to support these sectors, I am also providing temporary funding of €90 million in 2023 to help consolidate their recovery from the Covid-19 pandemic.

In the Department’s overall allocation of over €1.1 billion, I am providing:

Next year marks the 25th Anniversary of the historic Good Friday Agreement. Based on the simple idea of co-operation between those of different backgrounds and faiths, it has been pivotal in bringing peace and reconciliation to this island.

Much progress has been made in those 25 years and this Government continues to deepen connection and cooperation across the island of Ireland. To deliver all-island projects, the Government is allocating €100 million to progress the Shared Island Fund and have committed to allocating €500 million of NDP funding out to 2025. We are progressing major cross-border infrastructure projects such as the Ulster Canal, and a new generation of investments to help address shared challenges and opportunities on an all-island basis.

I also look forward to the implementation of the forthcoming PEACEPLUS North South cooperation programme. Jointly supported by the European Union, the Irish and British Governments, and the Northern Ireland Executive, PEACEPLUS represents a record €1.1 billion cross-border investment in support of shared peace and prosperity on the island of Ireland.

2023 will represent 50 years of Ireland being a part of the European Union. Ireland benefits significantly from this shared community of now 27 member states and access to almost 450 million people in the single market. Recent years in particular have highlighted the importance of the solidarity of our European family.

As the Member State most directly impacted by Brexit, the €1 billion of funding reserved for Ireland from the Brexit Adjustment Reserve was very much welcomed. This is the largest single allocation for any Member State and it is continuing to help counter the adverse economic and social consequences of Brexit into 2023.

The Recovery and Resilience Facility, under which Ireland is set to receive almost €1 billion in EU funding over the 2022 to 2026 period, supports all Member States in mitigating the impacts of the pandemic. This funding will allow Ireland continue on our path of an equitable, green and digital recovery.

Ireland will also receive €1.4 billion in Cohesion Policy funding for the 2021 to 2027 period. When this funding is co-financed at a national level, it will mean Cohesion Policy programmes add a total value of almost €3.5 billion to the economy.

With the scale of expenditure I have just outlined comes increased responsibility to target resources to create the most impact and ensure value for money. There are a number of reform agenda initiatives that my Department are progressing. Performance and Equality Budgeting, and increasingly well-being and green budgetary elements are core to the Budget process. Our Spending Review papers provide significant policy analysis and evaluation on a diverse range of public expenditure areas, supporting evidence-based decisions.

Our reform initiatives are also continuing to ensure the robust, transparent and considered oversight of public funds through key reforms to the Public Spending Code aimed at strengthening our approach to capital expenditure management through an External Assurance Process and a Major Projects Advisory Group that supports Government departments in outlining the merits of a project. Building on this, my department is currently working with the OECD to update our Public Spending Code framework to ensure that it is robust in the face of changing priorities and to ensure that it takes appropriate account of the climate and environmental impact of investment decisions.

A Cheann Comhairle,

This past year has seen restrictions lifted and, for most of us, life has returned to much of how it was pre-pandemic. In that, there is a lot to be thankful for, our health, our freedom, the strong bounce back in the economy. But we now face new challenges.

This Budget seeks to strike the right balance with a range of targeted measures to help those most in need, universal supports and investment in our long term policy objectives.

This is a time of great change, and no little turmoil, across the world. I have no doubt the spirit of the Irish people will see us through. Our message to the people is clear. As a government, we will do the very best we can to support you in the weeks, months and years ahead. I hope that, taken in the round, this Budget shows our good faith to work with people and for people.

Our shared hope has been the bedrock of our resilience over the last three years. We have overcome so much in such a short space of time. And together we will do so again.

As Seamus Heaney once expressed: “Hope is not optimism, which expects things to turn out well, but something rooted in the conviction that there is good worth working for.”

A better and a fairer Ireland is a good we will continue to strive for.

A Ceann Comhairle, I welcome the opportunity to present Budget 2023 to this House.

When we gathered in this Chamber for Budget 2022, we were emerging from the worst of the COVID-19 pandemic. We now face a further economic challenge.

If you are an older person, you are having to spend more of your pension on heating your home; if you are looking after a family, you are facing higher grocery bills; if you are running a small business, you are trying to cope with increases in the cost of energy.

That is why Budget 2023, presented by Minister McGrath and I today, is and must be, a “Cost of Living Budget”, focused on helping individuals, families and businesses to deal with rising prices.

As we have seen all too clearly over the past few years – with Brexit, COVID and now the war in Ukraine – unforeseen risks and challenges are becoming more frequent in their occurrence and more severe in their impact. As one of the most open economies in the world, we benefit when things are going well internationally, but when they reverse, we are also one of the most exposed. As such, it is imperative that we are prepared for these shocks.

Our recovery from the pandemic is testimony to the value of that preparation. We faced the pandemic with our finances in good shape and this ensured we could both respond and recover in the aftermath.

Therefore Budget 2023 helps with the challenges of today, but will also ensure that we have sufficient reserves for what the future may yet bring. We must also be aware of the danger of making inflation worse by decisions that we could take.

The onset of the war in Ukraine has sent shockwaves throughout the global economy.

This shock is most clearly evident in energy and commodity markets, where prices surged at the onset of the war and have remained high.

Energy price inflation intensified over the summer as concerns grew regarding a complete shut-down of Russian gas supplies to continental Europe. The wholesale price of natural gas is now around eight times its average level in the years preceding the war in Ukraine.

The inflationary pressures from energy have been further compounded by the imbalance between demand and supply that emerged as the economy reopened at the start of the year. Consumers released substantial pent-up demand as restrictions were eased, while supply chain bottlenecks prevented firms from keeping up with that demand.

As a result of these factors, headline inflation in Ireland, similar to other advanced economies, is now running at highs not seen in many decades. My department is updating its forecasts to headline inflation of 8½ per cent for 2022, and just over 7 per cent for 2023.

Non-energy, or ‘core’ inflation, is also experiencing high levels of growth, suggesting spillover effects from energy and commodities markets to other sectors such as food, consumer goods, and services. My department’s forecasts for ‘core’ inflation has been revised up to 5¼ per cent this year, and just over 4½ per cent next. These developments reflect the increasingly broad-based nature of the inflationary challenge.

The pace of growth in the economy is expected to slow throughout the rest of this year as mounting inflationary pressures reduce spending power.

Tighter financial conditions and heightened economic uncertainty will also see firms hold back on investment. As a result, my department has revised down its forecast for Modified Domestic Demand – the most appropriate measure of our domestic economy – to 1¼ per cent for next year.

Let me acknowledge that these are not just abstract economic figures. The government understands, and I understand, the worries which small business owners, farmers, pensioners, those who work really hard to get by, will feel.

This is why the government will help, and by helping our country will overcome this challenge.

We can do this because our economy has strong foundations. Due to the hard work of the Irish people, the labour market has made a remarkable recovery over the past year, with well over 2½ million people in employment in the second quarter, the highest level on record, and an unemployment rate of 4.3 per cent recorded in August.

Looking ahead, while employment growth is expected to slow in line with the outlook for domestic demand, the unemployment rate is expected to remain at relatively low levels.

While the war in Ukraine poses the most immediate threat to our economy, we must remain vigilant of other risks on the horizon. Notably, Brexit could bring further challenges.

This is why our public finances matter. They have recovered strongly from the effects of the pandemic. Much of this recovery is due to their careful management over recent years and by undertaking appropriate responses to the unique challenges which we faced.

The recovery in tax receipts is broad based: at the end of August, tax revenues stood at almost €50 billion, up by over €10 billion on 2021. Income tax continues to perform well, and reflects the resilience of our labour market and the success of our employment schemes during the pandemic. The strong performance of VAT receipts confirms the rebound in consumer spending once public health restrictions were lifted.

As a result, I can announce to the House that we will register a General Government surplus of €1 billion, or just under ½ per cent of national income this year, and €6.2 billion or 2¼ per cent next year. To put this recovery in context, last year we recorded a General Government deficit of €7 billion.

While this is extremely welcome news, headline deficit and tax revenue figures do not account for the fact that much of the surge in tax revenue is due to excess corporation tax. These receipts could change significantly in the future, and with little warning. Corporation tax amounted to nearly €12 billion to end-August and my officials expect these receipts to exceed €20 billion this year. I will return to this point shortly.

It is essential that we use our surpluses wisely. We should not spend everything today; this will ensure that we are ready for tomorrow. This is what we did before COVID arrived, it worked and that is what we must do again. Because of this we could help during COVID, because of this we can help again.

While conditions have been favourable to us in recent times, it is important to note that borrowing costs for countries have also changed significantly since the start of the year and are now on a rising trajectory. The yield on 10-year government bonds has increased by over 2 percentage points since January.

While markets continue to view Irish bonds favourably, we know that market sentiment can turn swiftly. The best way to insulate the public finances from the higher cost of debt is to ensure that Ireland’s borrowing remains aligned with other small open EU Member States.

While my department’s economic projections envisage a softening in economic growth next year, the phasing out of exceptional supports and the upward revisions to the Exchequer forecasts place us in a strong position.

If we continue to follow our current strategy we should see a stabilisation of public debt at approximately €225 billion. It is also important to acknowledge that on a per capita basis, public debt amounts to around €44,000, which is among the highest in the world.

However, we will achieve a continued decline in the debt-national income ratio over the coming years by delivering budget surpluses.

By 2025, this ratio is projected at around 73 per cent – this is the lowest level seen since 2009. But this is contingent on maintaining the stance we have shown to date.

We simply do not know what challenges we will face in the future. When we face them, I believe we will prevail. A crucial economic foundation of this is managing our debt safely. It matters.

Managing the public finances allowed the government to act swiftly and decisively, to provide support to households and businesses, being especially mindful of the fact that the rising cost of living has hit hardest for those on lower incomes.

In drafting Budget 2023 Government has a responsibility to strike a delicate balance between helping with the cost of living pressures but, on the other hand, not making them worse by adding fuel to the inflationary fire.

The Summer Economic Statement set out the parameters for Budget 2023, as well as the medium-term budgetary framework.

In response to the increase in energy and other prices, the government amended its fiscal strategy for 2023 – doubling the size of the tax package and increasing public expenditure in order to protect the real value of public services.

For future years, we will aim to stay within the parameters of the medium-term budgetary strategy set out last year. This will allow us to provide for steady improvements in public services and sustainable reductions in personal taxation while still ensuring that our public finances remain on a positive trajectory.

To help families, individuals and businesses deal with the rising cost of living, Minister McGrath and I are today announcing a package of once-off measures worth €4.1 billion. This will be accompanied by budgetary measures for 2023 worth €6.9 billion.

This brings the total size of Budget 2023 to €11 billion. In addition, there will be a further €300 million in public service support measures funded from the Contingency Reserve Fund.

I appreciate that these are very significant figures. However, I also appreciate that needs are also significant. The strength in tax revenues have provided us with the additional means to undertake such a response.

As mentioned a moment ago, at end August, tax revenues were approximately €10 billion ahead of the same period last year. While much of this is due to corporation tax, just under €5 billion was due to income tax and VAT. This growth is reflective of the domestic economy’s strengthening and is what guided the scale of once-off measures for 2022.

Further, given the urgency of the situation, these measures will come into effect this year and will be outlined by Minister McGrath shortly.

On the taxation side, I am extending the current excise reduction of 21 cent per litre in respect of petrol, 16 cent per litre in respect of diesel and 5.4 cent per litre in respect of Marked Gas Oil (MGO), and the 9 per cent VAT rate for electricity and gas until 28 February 2023.

I will be introducing the necessary Financial Resolutions later this evening in order to give effect to these extensions.

As I have stated previously, one of my core objectives in Budget 2023 is to ensure that workers do not find themselves in a position where they pay more income tax solely because of inflation. There are so many people who work hard, but whose earnings push them outside of access to social welfare benefits. We need to help them too, we need to put money back into their pockets.

I am therefore announcing today an income tax package to the value of over €1.1 billion.

Firstly, I am increasing the Standard Rate Cut Off Point by €3,200 to €40,000, with proportionate increases for married couples and civil partners.

Secondly, I am also increasing the main tax credits (Personal, Employee and Earned Income Credit) by €75.

I am also increasing the Home Carer Tax Credit by €100, to support stay at home parents.

Further, I am increasing the second USC rate band (2 per cent rate) from €21,295 to €22,920 in line with the 80 cent per hour increase in the national minimum wage recently agreed by this government. The increase in the USC band will ensure that full-time workers on the minimum wage will remain outside the top rates of USC, while also giving a modest benefit to all workers whose income is above that amount.

In addition, a concession applies to those who have a medical card and earn less than €60,000 per year, such that those individuals pay a reduced rate of USC. Given the broader challenges facing people this year, I confirm the extension of this concession for a further year.

The recent report of the Tax Strategy Group (TSG) examined the impact of introducing an intermediate or third rate of income tax.

Further analysis of the TSG report would give options to Government on additional policy levers in future budgets to make our income tax system more balanced and effective.

It is agreed that this analysis will commence immediately and conclude prior to the publication of next year’s Summer Economic Statement and will take into consideration the overall macroeconomic and fiscal context. This analysis will assist government in arriving at an informed decision in a timely manner.

Were the government to opt for the introduction of a third rate of income tax, it would require considerable change to the systems in both the Revenue Commissioners and payroll providers; changes that will need significant lead-time to implement. We are advised that this could be done for January 2024.

As a result, my department will engage with the Revenue Commissioners on the necessary preparatory work, in advance of a policy decision being made by Government.

The government is also committed to developing a medium-term roadmap for personal tax reform, taking account of the recent Report of the Commission on Taxation and Welfare, and will consider a range of measures across income tax, USC and PRSI together with other related personal taxation issues.

As everyone in this Chamber is well aware, housing is the central challenge facing the country over the next number of years.

Too many people cannot afford to buy their own home, or are paying too much of their income in rent. Too many people have no home at all. Hundreds of thousands of homes will be required over the next decade across all sectors, social, private and rental.

The government has made unprecedented levels of investment available to-date and we are seeing results:

Despite this progress, it is clear that Government can do more, and will do more.

The Help-to-Buy scheme has been a significant support for first time buyers of new homes. Since its inception in 2017, 35,000 people have benefitted from the scheme.

However, as with any tax expenditure, I will keep the scheme under review. Earlier this year I commissioned an independent review of Help-to-Buy and I am publishing this report today. There are a number of recommendations within that report which the government will consider for future budgets.

In the meantime, I am going to continue the scheme, at current rates, until the end of 2024.

For those taxpayers who are paying rent on their principal private residence, I am introducing a new rent tax credit valued at €500 per year.

This measure, aimed at those who do not get any other housing supports, will apply for 2023 and subsequent tax years but I am providing that it may also be claimed in respect of rent paid in 2022.

Approximately 400,000 persons are expected to benefit. Further details are contained in the Budget documentation.

I have also decided to enhance the pre-letting expenses regime for landlords by doubling the amount that may be claimed per premises to €10,000 and by reducing the period for which a premises must be vacant from twelve to six months.

Maximising the use of existing housing stock is also a key objective of this government.

Accordingly, I am introducing a Vacant Homes Tax to increase the supply of homes for rent or purchase to meet demand.

The tax will apply to residential properties which are occupied for less than 30 days in a twelve month period. There will be a number of exemptions to ensure that owners are not unfairly charged where the property may be vacant for a genuine reason.

The tax will operate on a self-assessment basis and will be administered by the Revenue Commissioners. The tax will be charged at a rate equal to three times the property’s existing basic Local Property Tax rate.

In Budget 2022 I announced a Residential Zoned Land Tax.

In order to identify zoned land within the scope of the tax, maps are currently being prepared by Local Authorities who will publish their first draft maps on the 1st of November this year. Following the publication of the maps, any person will have the opportunity to apply to their Local Authority to have the zoning status of their land amended as part of a variation process.

In Finance Bill 2022 I will bring forward a number of amendments to streamline the operation of the Residential Zoned Land Tax and ensure it is efficiently administered.

I also propose to extend the Residential Development Stamp Duty Refund Scheme to the end of 2025.

In place since 2017, this is a scheme whereby a portion of the stamp duty paid on the acquisition of non-residential land is refunded where that land is subsequently developed for residential purposes.

The net minimum stamp duty payable after a refund is 2 per cent, whereas the normal rate for non-residential property is 7½ per cent. To the end of 2021, this scheme had been availed of in respect of projects that have delivered over 15,000 residential units.

Earlier this year the government agreed a comprehensive redress scheme for those home owners who have been affected by the issue of defective products used in the building of their homes.

This redress scheme comes with a significant cost and therefore, I am bringing forward a levy on concrete blocks, pouring concrete and certain other concrete products.

The levy is expected to raise €80 million annually and will be applied from the 3rd of April 2023 at a rate of 10 per cent.

Ceann Comhairle, I want to turn to one of the other key challenges of our times, climate change, the effects of which are becoming more frequent and more destructive.

Protecting our environment is the responsibility of us all and Government is acting to reduce emissions and support newer cleaner technologies, particularly in energy and transport.

The additional funding needed for measures, such as retrofitting and more sustainable modes of travel, comes in part from carbon taxation and this is appropriate and will continue under this government.

The rate per tonne of carbon dioxide emitted for petrol and diesel will go up from €41 to €48.50 from 12 October as per the trajectory set out in the Finance Act 2020.

This will mean that there will be an increase of just over two cent VAT inclusive per litre of petrol and diesel.

However, I also recognise the sharp cost of living challenges currently being faced by society, so the government is therefore proposing to offset this carbon tax increase with a reduction to zero of the National Oil Reserves Agency (NORA) levy.

The NORA levy which is collected at a rate of 2 cent per litre (VAT exclusive) will help offset the carbon tax increase which means that the price at the pump will not go up as a result of taxes or levies.

We know the challenges farming communities face as they deal with rising input costs while moving towards a sustainable future.

A number of important Agricultural Reliefs are due to expire at the end of 2022. These reliefs provide important supports to our young farmers and the farming sector generally.

I will extend five agricultural tax reliefs expiring this year: the Young Trained Farmer and Farm Consolidation Stamp Duty Reliefs, the Farm Restructuring CGT relief, and the Young Trained Farmer and Registered Farm Partnership Stock Reliefs.

The duration of these extensions are dependent on the outcome of negotiations at a European Level on the Agricultural Block Exemption Regulation.

I am making provision in the Budget for a time-limited scheme of accelerated capital allowances for farmers for the construction of modern slurry storage facilities; this will assist the sector in further adopting environmentally positive farming practices.

I am today announcing specific measures to support business and enterprises in Ireland through these exceptionally challenging times.

Small and medium businesses are the backbone of our domestic economy and support thousands of jobs. The SME sector requires a range of supports as it deals with the immediate impact of the current crisis.

I am introducing a Temporary Business Energy Support Scheme to assist businesses with their energy cost over the winter months.

The scheme will be open to businesses that carry on a Case 1 trade, are tax compliant and have experienced a significant increase in their natural gas and electricity costs.

The scheme will be administered by the Revenue Commissioners and will operate on a self-assessment basis. Businesses will be required to register for the scheme and to make claims within the required time limits.

It is proposed that the scheme will operate by comparing the average unit price for the relevant bill period in 2022 with the average unit price in the corresponding reference period in 2021.

If the increase in average unit price is more than 50 per cent then the threshold would be passed and the business would be eligible for support under the scheme. Once eligibility criteria are met the support will be calculated on the basis of 40 per cent of the amount of the increase in the bill amount.

A monthly cap of €10,000 per trade will apply and an overall cap will apply on the total amount which a business can claim.

The scheme is being designed to be compliant with the EU State Aid Temporary Crisis Framework and will need to be approved by the EU Commission in the advance of making payments.

This is a significant intervention by the government in the Irish economy to protect employment. This support scheme forms a large part of our once off package. We must weaken the ability of a shock to income becoming a loss of jobs. This new policy will help employers with their rising bills, and help to save their businesses.

The Small Benefit Exemption allows an employer to provide limited non-cash benefits or rewards to their workers without the payment of income tax, PRSI and USC.

I am increasing the annual limit provided for in the exemption from €500 to €1,000 and will also permit two vouchers to be granted by an employer in a single year under this exemption.

I propose that these changes will apply in the current tax year, so that additional benefits can be paid this year if an employer wishes to do so.

Deputies should also note that I will be following through on my commitment from last year in relation to the production of cider by implementing the option in the revised EU Alcohol Directive to grant up to 50 per cent excise relief to independent small producers of cider and pear cider also known as ‘perry’.

The government is committed to supporting the night time economy – not just our hospitality sector, but also the many musicians, venues, event operators and organisers who are integral to creating a vibrant cultural life.

In line with a commitment in the Programme for Government to modernise our licensing laws, I am today announcing that we will halve the cost of applying for a Special Exemption Order, which late night venues require in order to open. This will reduce the excise fees for a special exemption application order from €110 to €55.

This aligns with a number measures we have taken to support the night time economy, and ahead of longer term reforms which will be announced when the General Scheme of the Sale of Alcohol Bill is published within weeks.

A Financial Resolution will be brought in tonight to enact this measure.

As I have previously stated, the 9 per cent VAT rate which is currently in place to support the tourism and hospitality sectors will continue until 28 February 2023.

The government is aware of the critical role that newspapers play in our society, from reporting on local communities to holding those in power to account. For that reason I will be reducing the VAT on newspapers from 9 per cent to zero from 1 January 2023.

This is in line with the government’s commitment to support an independent press and the Future of Media Commission’s recommendation on this matter.

Many Deputies in this house have contacted me seeking the removal of VAT on defibrillators and were told that it was not permitted under the EU VAT Directive. However, after much negotiation it is now possible for member states to apply a zero rate and I am happy to announce that I will apply this rate to these life-saving devices from 1 January.

I will also apply a zero rate of VAT to hormone replacement and nicotine replacement therapies, as well as the small number of period products that are currently subject to a 9 per cent rate.

Turning to the various business related tax credits:

Turning to revenue raising measures; much work is underway in the EU on capturing the windfall gains of energy companies. It is not fair for companies to earn excess profits from the current volatility in the market.

Ireland aims to be part of this EU-wide response to high energy prices. If this is not possible, this government will bring forward our own measures.

Since its introduction in 2013, the bank levy has been extended on several occasions and currently applies to the end of this year. The current annual yield of this levy is approximately €87 million per annum. I am therefore extending it for a further year.

Following the publication of the report of the Retail Banking Review, I will consider the long-term future of this levy.

To support public health policy to reduce smoking in Irish society, I am increasing excise duty on a pack of 20 cigarettes by 50 cents, with a pro-rata increase on other tobacco products.

A Ceann Comhairle, I would now like to take the opportunity to look past the immediate issues facing us today and to consider some issues which we will face over the medium to longer-term.

I very much welcome the recent publication of the report of the Commission on Taxation and Welfare, and thank members for their hard work.

The Commission considered how the overall balance of taxation might shift in order to sustainably fund public services over the longer-term. Its recommendations are clearly not intended to be implemented immediately but rather provide a clear direction of travel for this and future governments around how the sustainability of the taxation and welfare systems may be improved.

The report has already fed into a number of policy actions being announced today.

As referenced earlier I have requested that the department consider the proposals related to a range of recommendations across PRSI, USC and income tax over the coming months with a view to developing a medium-term roadmap for personal taxation reform to address these and other related issues.

In the area of property, I welcome the Commission’s proposals on changes to the Local Property Tax and a Site Value Tax. These longer-term reforms are wide-ranging and require careful consideration and consultation across Government. I am also committing to commencing a review of the REIT and IREF regimes. Institutional investment has played a key role in the provision of housing in recent years. This review will consider those structures and how best they can continue to support housing policy objectives.

In addition, I also intend to commence a review of the use of Section 110 regimes and to establish a working group to consider the taxation of funds, life assurance policies and other investment products.

Another area which the Commission considered in detail is corporation tax.

The pace of international tax reform has remained intense over the past 12 months. In October last year Ireland, along with almost 140 other countries, signed up to the two-pillar solution to address the tax challenges arising from digitalisation.

Ireland has committed to the two-pillar agreement and has engaged intensively at OECD and EU level to follow through on this commitment. The agreement is in line with Ireland’s long-standing position that co-ordinated multi-lateral action is the best approach to ensuring the international tax system keeps pace with changes in how business today is conducted internationally.

Work is continuing to develop the multiple new elements required to give effect to the Pillar Two minimum effective tax rate. This work will continue over the coming months, in conjunction with serious consideration of options for a move towards a territorial corporation tax system.

Needless to say, Ireland’s corporation tax regime is a core element of our economic policy mix and a longstanding anchor of our offering to attract FDI.

In addition to our 12.5 per cent headline tax rate we will also ensure that we continue to play to our traditional strengths such as a forward-looking business environment and an educated and dynamic workforce.

However, as noted earlier, we need to be mindful of our reliance on corporation tax. My department has undertaken significant work on these vulnerabilities, showing that approximately one in every eight euro collected by the State in tax comes from the corporation tax payments of a very small number of firms. At the same time, our income tax system is heavily reliant on a relatively small number of employees; just 500,000 workers and 10 multinational companies account for over one third of our total tax revenue.

My department estimates that ‘excess’ corporation tax receipts – that is the amount which may be more vulnerable to a shock – could amount to €8-10 billion this year.

While these receipts are extremely welcome, they cannot be depended upon to fund permanent expenditure. To do so, would be to repeat the mistakes of the years leading up to the Global Financial Crisis.

It is therefore imperative that we treat these ‘excess’ receipts differently:

Following so soon after Brexit and COVID, it is a major achievement for our country to be in a position to put additional resources aside in order to prepare for future challenges, and to run a surplus.

And let me be clear:

It is therefore imperative that we prepare our public finances appropriately.

This year I will be directing €2 billion into the National Reserve Fund, and €4 billion in 2023.

These contributions effectively mean that we will have:

I will be introducing the necessary Dáil Resolution later this evening in order to give effect to the transfers to the fund for this year and next.

A Ceann Comhairle, I want to conclude on an optimistic note, and that is because despite the challenges facing our country, I am confident that we will be able to continue to support individuals, families and businesses.

This confidence is based on the fact that we approach this test from a position of strength. A record number of people at work, with a budget surplus, reserving money for the needs of the future, inside – not outside – efforts to reform global corporate tax and intervening to help homes and businesses with rising costs.

But we know we have many risks. Recent years have shown how quickly they can develop.

And I know we need to do more, build more homes, continue to improve public services, respond with courage and resolution to our defining challenge of climate change. But we can. And we will.

The political centre of Ireland, that is pro-European, supportive of enterprise, committed to a sustainable future for our public finances and for our environment has, with the hard work of the Irish people, helped get us ready for today. So soon after confronting a pandemic.

Many are looking at this budget today for confidence, for help.

Ceann Comhairle, we can, and we should be confident about our future.

We know our citizens need help, we know our employers need help and this budget aims to give this help.