Budget 2024 analysis: Michael McGrath and Paschal Donohoe got Cabinet agreement to keep permanent tax and spending changes within tight enough limits - and to establish two funds. This was the prudence play. Photograph: Gareth Chaney/ Collins Photos
How long the health of the public finances will allow budgets on this scale – meeting perceived political needs while also salting cash away – very much remains to be seen.got Cabinet agreement to keep permanent tax and spending changes within tight enough limits- and to establish the two funds. This was the prudence play.
The budget Ministers will argue, correctly, that these payments can be phased out as the cost-of-living crisis eases. But political pressure to continue many of them will be immense. Like the 9 per cent VAT rate for hospitality, they will die slowly over many years. If written tightly in the legislation, the obligation to pay money into these funds every year – upwards of €4 billion to the longer-term fund and €2 billion to the infrastructure one – will be a constraint on future budgets, limiting what can be done elsewhere.
For now, the Government is trying to “have it all”. The budget was clearly constructed with more than one eye on the next general election. One more package may, or may not, take place before voters go to the polls.