Ireland is now entering “a new phase” in which the country will recover from the pandemic, restore public services and repair public finances, the Minister for Finance has said.
Unveiling the budget for 2022, a package that amounts to €4.7 billion, Paschal Donohoe said the Government is “conscious” of the cost-of-living pressures on the public and businesses.
Addressing the Dáil, Mr Donohoe noted that the last time he announced the budget in the chamber was two years ago before the Covid-19 pandemic.
“None of us could have foreseen that the worst global pandemic in a century awaited,” he said.
Today’s budget will:
🏥Restore our public services
📊Repair our public finances
👷Continue the recovery of our jobs and economy
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— MerrionStreet.ie (@merrionstreet) October 12, 2021
“We knew well about the risks associated with Brexit and had prepared for it, but we could not have predicted the devastation Covid-19 would leave in its wake.
“Both events have demonstrated our need to prepare for the worst while striving for the best.
“Many lives were lost and many livelihoods suddenly were ruined.
“The pandemic was an unprecedented experience for all of us and unfortunately life-changing for so many.
“But it also brought out the very best in Irish society and the bravery, resilience and fortitude of our frontline workers and those working in the community and social care sectors.”
Mr Donohoe added: “In framing this budget, we have been conscious of the cost-of-living pressures that are currently confronting citizens and businesses.
“As the recovery increasingly takes hold and citizens get back to some level of normality, we in Government remain focused on our higher levels of debt, which my department is forecasting will come in at just under 240 billion next year, and the real risks associated with that.”
Mr Donohoe said that by the end of the year, the rate of unemployment is forecast to be just over 9 per cent, and employment is forecast to grow by about 8 per cent or around 150,000 jobs.
Minister @Paschald has announced an income tax deduction amounting to 30% of the cost of vouched expenses for heat, electricity and broadband in respect of those incurred while working from home #Budget2022 pic.twitter.com/KSjakSOBJT
— Department of Finance (@IRLDeptFinance) October 12, 2021
Next year, the unemployment rate is expected to fall to about 6.5 per cent, and employment is expected to grow by more than 13 per cent.
He said that more than 400,000 jobs will be added to the economy between this year and next.
Public spending next next year will amount to €87.6 billion.
Mr Donohoe added: “In the Summer Economic Statement, my department forecasted a combined deficit of just over €34.5 billion for 2021 and 2022.
“I am revising that forecast to €21.5 billion for both years, a reduction of 40 per cent.”
Earlier, Taoiseach Micheal Martin said the budget will “consolidate” Ireland’s economic recovery as it emerges from the pandemic.
Introducing #Budget2022…@IRLDeptFinance @IRLDeptPER @Paschald @mmcgrathtd @MichealMartinTD Keep up to date tomorrow on https://t.co/lCMOLUmLwP pic.twitter.com/WYtE4XkWhA
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Mr Martin, speaking on Tuesday ahead of a Cabinet meeting, said: “I think the backdrop to this Budget is Ireland emerging from the Covid pandemic and the economic recovery under way.
“We have to consolidate that and we’ll do that by making sure that there’s no cliff edge in respect of supports for jobs.”
On Tuesday, Tanaiste Leo Varadkar told reporters that the Government needs to look towards a return to “normal budgeting” ahead of any rise in interest rates on borrowing.
He said the package of measures to be announced by Mr Donohoe are “not insignificant”.
The priorities, he said, include helping families with the cost of living, as well as supporting businesses and investing in public services.