Budget 2024: Here is a breakdown of €14bn package including cost-of-living payments, tax measures and expenditure
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00:00 Budget 2024 is the first budget I will deliver as Minister for Finance.
00:05 It is an enormous privilege to serve in this historic office and I have a deep sense of
00:10 the responsibility that comes with it.
00:13 As Minister for Finance it is my role, working with colleagues, to balance the needs of our
00:18 society today while ensuring the wellbeing of our economy for generations to come.
00:24 The budget will provide further support to individuals, families and businesses at a
00:29 time when the cost of living is high.
00:31 The budget will also provide for new investment in the public services on which we all depend
00:36 and continue to invest in the infrastructure we need for the future, including the largest
00:42 home building programme for many decades.
00:45 It will reaffirm the importance of our enterprise economy.
00:48 It will ensure there is opportunity for all while providing a safety net for those that
00:53 need it.
00:55 By any measure, Ireland is a modern, successful country but we know we can do better and we
01:01 will.
01:02 The annual budget is about setting out how we can help with the needs of today but it
01:07 is also about planning for the next 10, 20, 30 years.
01:11 We have a window of opportunity now that we must grasp.
01:16 Budget 2024 marks a step change in how we plan for the future by putting in place a
01:21 long-term plan that will make the economic future safer for all.
01:27 Today I am announcing two new funds.
01:30 The Future Ireland Fund, with a potential to grow to over 100 billion euro by the middle
01:35 of the next decade, will help to protect living standards and public services for current
01:41 and future generations.
01:43 Separately, 14 billion euro will be put aside in the Infrastructure, Climate and Nature
01:49 Fund by 2030 to allow for sustained levels of investment in infrastructure in the event
01:55 of economic downturns and to support climate and nature related projects.
02:00 These funds are vital to help future-proof our economy and our public finances and I
02:06 will outline more detail on these new funds shortly.
02:10 This government has navigated the Irish economy through unprecedented challenges, Brexit,
02:16 the pandemic, the war in Ukraine and rates of inflation not seen for some 40 years.
02:23 With the appropriate government support, our economy has rebounded strongly.
02:28 There are many positives, including a country at full employment with a record high of over
02:34 2.6 million people at work.
02:37 This success should not be taken for granted or put at risk.
02:41 However, we also acknowledge there are capacity constraints in the economy and these are most
02:46 obvious in the housing and labour markets.
02:49 Despite our positive economic performance, inflation continues to make life very difficult
02:55 for many people.
02:56 I welcome the fact that the rate of inflation has fallen but I am acutely aware that household
03:01 budgets are stretched for many.
03:03 That is why we are providing assistance in this budget with an emphasis on those who
03:08 need it the most.
03:10 The current Corla budget 2024 is being framed against a backdrop of considerable global
03:15 uncertainty, both economic and increasingly geopolitical.
03:21 The outlook for the global economy has deteriorated and as one of the most economically open countries
03:26 in the world, international developments have immediate repercussions for Ireland.
03:32 Our key export markets are experiencing an economic slowdown and this has impacted on
03:37 our recent export performance.
03:40 While the Irish economy is in a strong position today, I am all too well aware of the potential
03:45 risks that may materialise from global events or sectoral shocks.
03:50 In the decade preceding the pandemic, inflation averaged just 0.5% per year.
03:58 In 2022, inflation averaged over 8% across the year.
04:04 This has a real bearing on the everyday lives of people and businesses throughout the country.
04:09 The recent interest rate increases have also had a negative impact on many households and
04:14 businesses.
04:15 Thankfully, since this time last year, inflation has eased with the most recent data showing
04:20 inflation of 5% in September.
04:23 I expect this trend will continue in the coming months, improving real household incomes and
04:28 purchasing power.
04:29 For many, the impact of inflation resulted in a deterioration in living standards in
04:35 the last year.
04:36 I expect living standards will improve for the vast majority in the next 12 months, with
04:41 incomes growing faster than the rate of inflation.
04:45 My department estimates an average inflation rate of just over 5.25% for this year.
04:51 For next year, inflation of 2.9% is projected.
04:55 We are now finally seeing a decline in consumer electricity and gas prices, albeit at a slower
05:01 rate than we would like.
05:03 And I know as we head into the winter, energy bills will be to the fore of people's minds.
05:09 This is why the government will once again be stepping in to provide direct help with
05:13 household energy bills.
05:15 My department estimates that Modified Domestic Demand, or MDD, a proxy for the domestic economy,
05:22 will grow by 2.25% this year.
05:24 For next year, we project it will also grow at the same rate.
05:28 GNI*, a de-globalised measure of national income, is projected to grow by 2% this year
05:34 and next, broadly in line with the path for Modified Domestic Demand.
05:39 These forecasts have been endorsed by the Irish Fiscal Advisory Council.
05:44 I am acutely aware that fiscal policy must be carefully designed with inflationary pressures
05:49 in mind.
05:51 Careful management of the public finances has allowed the government to provide €12
05:55 billion in direct assistance to help deal with the cost of living pressures since the
06:00 beginning of last year.
06:02 In Budget 2024, I believe we have struck the right balance between providing support for
06:07 our economy and society while not unduly adding to inflation.
06:13 This House has heard me on many occasions referencing the vulnerabilities of our public
06:17 finances.
06:18 My Department is forecasting tax revenue will reach €88.3 billion this year.
06:25 For the first time in a number of years, this is a downward revision for 2023 compared to
06:30 earlier expectations.
06:32 This is due to lower than expected corporation tax receipts, which as we know, fell sharply
06:38 in the summer.
06:39 It is of course a highly concentrated revenue stream and it is important to note that our
06:44 strong income tax receipts are also highly correlated with our corporation tax receipts.
06:50 My Department estimates that windfall corporation tax receipts now stand at around €10-12
06:56 billion.
06:58 It is clearly welcome that our public finances are in a relatively strong position, especially
07:03 given the level of support that has been made available by government over the last number
07:08 of years.
07:09 However, growth in tax receipts in 2023 was notably more modest than in recent years and
07:15 this is also expected to be the case for next year.
07:18 I can inform the House that we are projecting a general government surplus of €8.8 billion
07:24 or 3% of national income this year and €8.4 billion or 2.7% next year.
07:32 It is incumbent upon this Government to ensure that while welcoming the strong surplus, we
07:37 also acknowledge that if we were to remove windfall corporation tax receipts, we would
07:42 record an underlying government deficit of €2 billion in the current year.
07:47 Therefore, we must use windfall receipts wisely and not allow them to fund permanent expenditures.
07:55 Sovereign borrowing costs have been on an upward trajectory and have in recent days
07:59 risen to levels not seen in over a decade as markets appear to be absorbing the 'hire
08:04 for longer' message coming from global central banks.
08:08 The Irish 10-year yield is currently 3.3%, considerably higher than it was at this time
08:14 last year.
08:15 The structure of Irish public debt, with long maturities and strong cash balances, means
08:20 the Debt Service Bill should stay quite stable for the coming three to four years, but costs
08:25 are likely to rise later in the decade as low coupon debt matures and it is refinanced
08:31 at likely much higher rates.
08:33 Our debt is moving in the right direction.
08:36 On the current path, we will be below €200 billion by the end of the decade and lower
08:41 again as a percentage of national income, but this does not mean that we can be complacent.
08:47 The Government decided in the summer economic statement to temporarily adjust its medium-term
08:52 spending rule to reflect the reality of the economic backdrop that we are now experiencing.
08:58 Debt core public spending will increase by 6.1% next year rather than the 5% originally
09:04 set out.
09:05 This decision reflects the fact that inflation is projected to be above trend for next year.
09:10 Assuming inflation falls to more normal levels, core spending will be allowed to grow by 5%
09:16 from 2025 onwards in line with the medium-term budgetary strategy.
09:21 Today I am announcing a total budget package of €14 billion.
09:26 Budget 2024 consists of a core expenditure package of just under €5.3 billion and a
09:32 tax package of over €1.1 billion, a total core package of €6.4 billion.
09:39 This is in line with the budgetary parameters set out in the summer economic statement last
09:44 July.
09:45 There is also a package of once-off cost-of-living measures of €2.7 billion net of windfall
09:51 revenues from the energy sector.
09:53 In addition, there is non-core expenditure of €4.75 billion, including an additional
09:59 €250 million for the public capital programme funded by windfall corporate tax receipts.
10:06 I am announcing today, Keogh an go raibh le, a personal income tax package to the value
10:10 of €1.3 billion.
10:13 As incomes rise, it is vital that adjustments are made to our personal tax system.
10:18 In the absence of this, workers and many pensioners would experience an increase in the burden
10:23 of tax in real terms, resulting in a drop in living standards.
10:28 The competitiveness of our personal tax system is also a factor in inward investment decisions.
10:34 I am therefore announcing the following changes.
10:36 I am increasing the personal, employee, PAYE and earned income tax credits by €100 each.
10:42 I am increasing the standard rate income tax cut-off point by €2,000 to bring the entry
10:48 point to the higher rate of income tax to €42,000.
10:52 I am reducing the 4.5% rate of UAC to 4%, the first reduction in UAC rates in five years.
11:00 Following Government approval this morning, as of 1 January next year, the national minimum
11:04 wage will increase by €1.40 per hour to €12.70 per hour.
11:09 Therefore, to ensure that such workers remain outside of the higher rates of UAC, I will
11:15 be raising the entry threshold to the 4% rate to €25,760 in line with the increase in
11:22 the national minimum wage.
11:23 A full-time worker on the minimum wage will see an increase in their net take-home pay
11:29 of approximately €2,300 on an annual basis.
11:33 The total value of the UAC changes I am announcing today amounts to €350 million next year
11:40 and €400 million in a full year.
11:42 It represents the largest UAC package since 2016 and, taken together with the income tax
11:47 changes I am announcing, will provide much-needed assistance to taxpayers across all income
11:54 levels.
11:55 Taking the example of a single person earning €46,000 in 2024, they will see an increase
12:02 of over €2,000 in their net income as a result of cumulative income tax and UAC changes
12:08 since 2021.
12:10 This year's Budget has a particular focus on tackling child poverty.
12:15 I am making a number of further taxation changes to assist families with children.
12:20 I am increasing both the home carer tax credit and the single person child carer credit by
12:25 €100 and increasing the incapacitated child tax credit by €200.
12:30 I am extending the UAC concession, which applies to those who have a medical card and are in
12:35 less than €60,000 per year, for a further two years until the end of 2025.
12:42 I will now address some of the other elements of the Government's cost of living package.
12:47 I am proposing to extend the 9% reduced VAT rate for gas and electricity for a further
12:52 12 months.
12:53 It is estimated that consumers will save an additional €90 for electricity and those
12:59 who use gas will save an additional €62 on average during the 12-month extension.
13:05 I am conscious that the price of petrol and diesel for motorists has increased in recent
13:10 weeks, driven by volatility in international oil prices.
13:14 I have therefore decided to defer the final tranche of the fuel excise increases, which
13:19 were due to happen at the end of this month.
13:21 I will restore the outstanding amounts of 8 cent on petrol, 6 cent on diesel and 3.4
13:26 cent on marked gas oil in two equal instalments on 1 April 2024 and 1 August 2024.
13:33 I will introduce financial resolutions on both these matters later this evening.
13:38 In last year's Budget, the Government introduced the rent tax credit to support renters.
13:43 As of the end of September, over 290,000 rent tax credit claims have been made, with close
13:49 to a €166 million claim to date.
13:52 I am pleased to be in a position to increase the value of the rent tax credit from €500
13:57 per year to €750 per year for 2024.
14:02 In addition, I have decided to make an amendment to allow parents who pay for their student
14:06 children who have tenancies in rent a room or digs accommodation to claim the rent tax
14:11 credit.
14:12 This will also be backdated to allow for claims to be made for the 2022 and 2023 tax years.
14:19 Ciarán Górla, I am acutely conscious of the impact of rising interest rates and mortgage
14:24 costs on many households.
14:27 It is not possible or desirable for Government to attempt to mitigate in full the impact
14:32 of increased interest rates.
14:34 However, what we have experienced in the past 14 months is exceptional in the history of
14:39 monetary union, and ten successive interest rate increases have put many mortgage holders
14:45 under considerable pressure.
14:47 I have therefore decided to introduce a one-year mortgage interest tax relief for homeowners
14:52 with an outstanding mortgage balance on their primary dwelling house of between €80,000
14:58 and €500,000 as of 31 December 2022.
15:03 Relief will be available in respect of the increased interest paid on the mortgage in
15:07 the calendar year 2023 as compared with the amount paid in 2022 at a standard rate of
15:13 20% of income tax.
15:15 The relief will be capped at €1,250 per property.
15:19 Approximately 165,000 mortgage holders will benefit from this measure with an estimated
15:25 cost of €125 million.
15:28 In relation to the Benefit in Kind regime, Ciarán Górla, for company vehicles, I am
15:33 extending for a further year the temporary universal relief of €10,000 to the original
15:38 market value which I announced earlier this year.
15:42 And in order to encourage the use of electric vehicles for company car purposes, I am temporarily
15:47 suspending the tapering of the preferential BIK relief.
15:50 I am therefore maintaining the existing €35,000 original market value reduction for 2024 and
15:57 2025.
15:58 And taken together with the extension of the universal original market value relief of
16:03 €10,000, this measure will mean that an employee with an electric company vehicle
16:08 will see an overall BIK original market value relief of €45,000 next year.
16:15 Ciarán Górla, on behalf of Ministers of State, Carol MacNeill and myself, I am pleased
16:20 to announce a 1% reduction to the Motor Insurers Insolvency Compensation Fund levy, benefiting
16:26 up to 2.2 million policyholders on renewal from 1 January 2024.
16:31 Ciarán Górla, in the course of my work as a constituency TD for over 16 years, I have
16:37 observed that many people do not fully claim all the tax relief that they are due.
16:43 He estimates that €180 million in refunds could potentially be due to taxpayers for
16:48 2022 alone.
16:49 I will shortly be launching an extensive public information campaign with revenue to raise
16:56 awareness of the range of tax credits and reliefs available to PAYE taxpayers to ensure
17:02 that people can avail of their full entitlements and receive any refunds that are due.
17:08 Housing is undoubtedly the biggest domestic challenge we face today and remains a top
17:13 priority for government.
17:15 Housing for All represents the biggest investment in housing in our history.
17:20 Last year we delivered 7,500 new-build social homes, 43% higher than the previous year,
17:27 and the highest number of new-build social homes delivered since 1975.
17:32 Minister Donoghue will set out our investment plans for next year, with funding for thousands
17:37 of social, cost rental and affordable homes across the country.
17:42 Since its introduction, the Help to Buy scheme has supported over 40,000 people to purchase
17:49 their own home.
17:50 And to give certainty to prospective homebuyers and to the market, I can confirm I intend
17:56 to extend the Help to Buy scheme to the end of 2025 and will consider, across next year,
18:02 if any changes are required to the scheme.
18:05 Some people availing of the Local Authority Affordable Purchase Scheme have found that
18:10 they do not qualify for the Help to Buy scheme under the current rules.
18:14 Therefore, I am amending the scheme to ensure that applicants of the Local Authority Affordable
18:20 Purchase Scheme can avail of Help to Buy.
18:23 This change will take effect from tomorrow and will run from the revised end of the scheme
18:27 in 2025.
18:28 Ciann Córdai have already announced an increase in the rent tax credit for 2024.
18:34 For every tenant, there has to be a landlord.
18:37 In recent years, we have seen a decline in the number of small investors in the market
18:42 owning one or two properties.
18:44 86% of landlords in the market own just one or two properties and they have a vital role
18:50 to play.
18:51 With that in mind, I am introducing a temporary tax relief which will primarily benefit small
18:56 landlords, subject to certain conditions being met.
19:00 Rental income of €3,000 for the year 2024, €4,000 for 2025 and €5,000 for the years
19:07 2026 and 2027 will be disregarded at the standard rate of income tax.
19:13 An important condition of this measure is that the properties held by the landlord availing
19:18 of the relief must remain in the rental market for the full four years.
19:23 Otherwise, the full amount of the relief will be clawed back.
19:27 Further details are contained in the budget documentation.
19:31 Tackling vacancy Ciann Córdai is a priority for this Government.
19:36 It is appropriate that every available lever is deployed to incentivise the use of existing
19:42 housing stock across the country.
19:44 This includes measures to deter vacancy, alongside supportive measures such as grants.
19:50 For this reason, I am increasing the vacant homes tax introduced last year to five times
19:55 the property's existing basic local property tax rate.
19:59 This increase will take effect from the next chargeable period commencing in November.
20:04 The Residential Zoned Land Tax, or RZLT, is an important initiative to activate suitably
20:10 zoned and serviced land for housing.
20:13 It is important that affected landowners have sufficient opportunity to engage with the
20:18 mapping process and that a fair and transparent process is applied when the local authorities
20:23 consider what land should be placed on the RZLT maps.
20:27 Therefore, I am extending the liability date of the tax by one year to allow for the planned
20:32 2024 review of maps to take place and to afford affected people with a further opportunity
20:39 to engage with the process.
20:43 The Government's ability to respond swiftly with financial support during recent crises
20:49 was due to our strong public finances which in no small part are a result of the taxes
20:54 paid by the business sector.
20:56 From the large multinational corporations to the small and medium enterprises which
21:01 operate in every town, village and city across Ireland, it is my priority to ensure that
21:06 we have an environment which allows businesses to thrive.
21:10 In next week's Finance Bill, I will be publishing legislation to implement the 15% minimum effective
21:16 tax rate for large companies as provided for under the OECD Pillar 2 Agreement.
21:22 This is a once in a generation reform to our corporation tax system and marks the culmination
21:28 of a 10 year global project to reform the taxation of multinational enterprises.
21:35 I recently announced that a participation exemption for foreign sourced dividends will
21:40 be legislated for in Finance Bill 2024 with the detailed development work to take place
21:46 over the coming months.
21:47 This will be a significant first step in reducing the administrative burden on businesses.
21:53 In relation to Ireland's current regime for interest deductibility, this is a complex
21:57 area which will take some time to work through and I have committed to engaging with stakeholders
22:02 on the issue over the period ahead.
22:06 Indigenous businesses are the backbone of the economy and upon taking office I set about
22:11 reviewing the enterprise supports in our tax system to identify improvements fit for a
22:17 modern and dynamic economy.
22:20 I have met and listened to business organisations and representative bodies across the country
22:25 and have carefully considered their proposals and concerns.
22:29 In this context I am announcing a package of wide ranging measures to support Irish
22:34 enterprise which I believe will make a very positive difference.
22:38 The Research and Development Tax Credit is a crucial feature of Ireland's corporation
22:43 tax offering and enables us to remain competitive in attracting quality employment and investment
22:50 in R&D.
22:52 I am increasing the R&D tax credit from 25% to 30%.
22:57 This will maintain the net value of the existing credit for those businesses subject to the
23:01 new 15% minimum effective tax rate while also delivering a real increase in the credit to
23:06 those smaller companies who will not be in scope of pillar 2.
23:10 I am doubling the first year payment threshold from €25,000 to €50,000 to provide valuable
23:17 cash flow support to companies engaged in smaller R&D projects.
23:23 I hope this will encourage more businesses to engage with the regime.
23:27 My department has completed a cost benefit analysis of revised entrepreneur relief which
23:32 was published today with the budget papers.
23:35 I have asked my officials to examine opportunities to refocus the relief with a view to further
23:40 improving the incentives for founders and entrepreneurs in the innovative start-up phase
23:45 and to ensure it is contributing to employment creation.
23:49 I am today announcing a new targeted capital gains tax relief for angel investors in innovative
23:55 start-up SMEs.
23:57 This aims to assist SMEs in attracting investment and make Ireland a more attractive location
24:03 for angel investment.
24:04 It will allow angel investors to benefit from a reduced rate of capital gains tax when they
24:10 dispose of a qualifying investment for gains up to twice the value of their investment.
24:17 The Employment Investment Incentive Scheme provides SMEs and start-ups with an alternative
24:23 source of funding.
24:24 I will be enhancing the scheme by standardising the investment period to four years for all
24:29 investments and doubling the amount an investor can claim relief on for four year investments
24:35 to 500,000 euro.
24:37 These enhancements will help unlock more equity investment in smaller early stage businesses
24:43 which are typically those that are most in need of funding.
24:47 My officials will also undertake a further review of EII in early 2024 which will focus
24:53 on the potential for further simplification of the scheme while taking account of the
24:57 conditionality imposed by the EU General Block Exemption Regulation.
25:04 Retirement relief supports the intergenerational transfer of businesses and farms and works
25:09 to ensure their smooth transition so that they continue to play an important role in
25:14 the Irish economy.
25:16 In line with government policy on the age of retirement, I am extending the upper age
25:20 limit for the relief from 65 until the age of 70.
25:25 The reduced relief which was available on disposals from age 66 onwards will now apply
25:30 from the age of 70.
25:31 These changes will come into effect from 1 January 2025 so as to allow for an appropriate
25:37 transitional period.
25:39 I will also introduce a limit on disposals to a child up to the age of 70 as recommended
25:45 by the Commission on Tax and Welfare.
25:48 The Key Employee Engagement Programme is an important scheme aimed at improving the attractiveness
25:53 of the SME employment offering.
25:55 I am pleased to announce that I have now secured EU state aid approval to commence the outstanding
26:01 22 amendments to this programme.
26:04 The amendments include the extension of the scheme to the end of 2025 and a doubling of
26:08 the limit for the total market value of issued but unexercised qualifying share options from
26:14 3 million euro to 6 million euro.
26:16 These amendments will be commenced by ministerial order shortly.
26:20 We have all taken great pride in the huge success of the Irish audiovisual sector in
26:26 recent years, reflected in the numerous accolades awarded to Irish productions.
26:32 Top quality content is being made in Ireland, largely due to the funding offered through
26:37 the section 481 Film Tax Credit.
26:40 Such productions provide a tangible economic benefit to our country through jobs, skills
26:46 development, regional development and spend on local goods and services.
26:50 They are also vital in the promotion of Irish culture to audiences at home and abroad.
26:57 Today I am providing for an increase in the current project cap on qualifying expenditure
27:02 in the section 481 film tax credit from 70 million euro to 125 million euro subject to
27:10 state aid approval.
27:11 This will support the continuing development of a robust and creative film sector in Ireland.
27:18 In addition, my officials will shortly begin engagement with the European Commission with
27:22 a view to developing an incentive for the unscripted production sector in line with
27:27 state aid rules.
27:31 Ciarán Gord I propose to increase the existing VAT registration thresholds for businesses
27:37 from 37,500 euro for services and 75,000 euro for goods to 40,000 euro for services and
27:44 80,000 euro for goods respectively.
27:46 While modest, these changes will provide more latitude to small businesses whose turnover
27:52 is close to the existing thresholds and is broadly in line with forthcoming EU VAT registration
27:58 thresholds.
27:59 Ciarán Gord I, one of the messages that I have heard clearly from my engagement with
28:04 the business community is that the rules and requirements surrounding tax reliefs and schemes
28:09 are complex which can make them difficult to access.
28:13 Tax reliefs by their nature are complex and there are certain requirements that cannot
28:18 be modified particularly due to EU state aid and other international rules and considerations.
28:24 However I am determined to ensure that all businesses, especially small and medium sized
28:29 enterprises throughout the country know what they are entitled to claim and can access
28:34 all appropriate schemes and reliefs.
28:37 I know that Revenue is committed to continuing to support businesses by making it as easy
28:42 as possible to avail of the vast range of business support schemes that it administers
28:47 so well on behalf of the state.
28:50 As part of this ongoing commitment, Revenue will in the coming weeks establish a dedicated
28:56 tax administration liaison committee subgroup focused on identifying any opportunities to
29:02 simplify and modernise the administration of business supports.
29:06 The terms of reference of this subgroup will be agreed at TALC and a report on the recommendations
29:11 of the subgroup will be delivered during the course of next year.
29:15 Finally, I would like to announce that the Revenue Commissioners will shortly launch
29:20 a public consultation on how we can use digital advances to modernise Ireland's VAT invoicing
29:27 and reporting system.
29:29 In addition, my officials will shortly be launching a public consultation on share based
29:34 remuneration recognising the increasing importance that business places on share based remuneration
29:40 in rewarding and retaining employees and the continued globalisation of the workforce.
29:46 I would encourage all stakeholders to submit their views and proposals on both these initiatives
29:51 over the period ahead.
29:54 My department is currently undertaking a review of the funds sector.
29:58 The review is on track to report to me in summer 2024 and will include consideration
30:04 of life assurance exit tax and the taxation of funds, including exchange traded funds
30:10 for Irish investors more generally.
30:12 Following the completion of this review, I will consider whether any changes to the current
30:16 taxation framework are appropriate.
30:20 In recent weeks and months, we have again seen the devastating impact of climate change
30:25 on communities around the world.
30:28 Extreme heat waves, droughts and wildfires have swept across many parts of the world
30:34 and 2023 is now virtually certain to be the warmest year since records began in the mid-1800s.
30:42 Today the Government is further demonstrating its commitment to climate action with the
30:46 establishment of the Infrastructure, Climate and Nature Fund and I will provide further
30:50 details on how this fund will operate in a few moments.
30:54 But first I want to outline a number of climate related taxation measures.
30:59 I'm extending the accelerated capital allowances scheme for energy efficient equipment for
31:04 a further two years.
31:06 I'm also doubling the tax disregard in respect of personal income received by households
31:12 who sell residual electricity from micro generation back to the national grid.
31:16 From the 1st of January 2024, an income disregard of up to 400 euro per year will apply to profits
31:23 or gains arising to a qualifying person from the micro generation of electricity.
31:29 This will provide relief from income tax but also from universal social charge and from
31:34 PRSI.
31:35 Ciarán Corlea, I introduced a measure in the Finance Act 2023 to reduce the VAT rate
31:42 on the supply and installation of solar panels for private dwellings to zero from the 1st
31:47 of May this year.
31:48 I'm extending this measure to schools with effect from the 1st of January 2024.
31:53 I'm extending the VRT relief for battery electric vehicles for a further two years
31:58 to the end of 2025.
32:00 This relief applies to battery electric vehicles with a value of up to 50,000 euro.
32:06 The rate per tonne of carbon dioxide emitted for petrol and diesel will go up from 48 euro
32:12 50 to 56 euro from the 11th of October as per the trajectory set out in the Finance
32:17 Act of 2020.
32:18 As per the commitment in the programme for government, all of the revenue raised from
32:23 this increase in carbon tax will be used to ensure the most vulnerable are protected from
32:29 the unintended impacts of the tax increase, to part fund a socially progressive national
32:34 retrofitting programme and to encourage and support farmers all over Ireland in the green
32:40 transition.
32:41 I wish to announce a number of other new measures in Budget 2024.
32:48 An issue which has been raised regularly with me, including by colleagues across the House,
32:53 is the VAT treatment of audiobooks and e-books.
32:57 E-books are currently subject to a VAT rate of 9% unlike printed books which are zero
33:02 rated.
33:03 Audiobooks are not currently included in the VAT zero rating, therefore I have decided
33:08 to zero rate these items from 1 January 2024.
33:12 It is important that the wider familial relationships that foster children have by virtue of their
33:18 foster parents are recognised for inheritance and gift tax purposes.
33:23 In line with the Commission on Tax and Welfare Recommendation, I will bring forward amendments
33:28 to ensure that foster children can avail of the Group B Capital Acquisition Tax threshold
33:33 based on their relationship to their foster parents.
33:36 Cairncora farming is the lifeblood of rural communities across our country and a number
33:42 of important agricultural tax reliefs are currently due to expire at the end of this
33:48 year.
33:49 These reliefs provide important supports to our farmers and to the farming sector generally
33:54 as we all know.
33:56 Consanguinity relief is a vital measure which supports the transfer of farms from one generation
34:02 to the next.
34:03 I will extend this relief for a period of five years to provide more certainty to farming
34:08 families as they plan for the future over the years ahead.
34:12 I am also extending the accelerated capital allowances for farm safety equipment and I
34:17 am increasing the maximum aggregate lifetime limit of a number of farm related reliefs
34:22 to 100,000 euro which is the maximum allowable under the new EU agricultural block exemption
34:28 regulation which came into effect on 1 January.
34:33 These reliefs include the young trained farmer stamp duty relief, stock relief for young
34:37 trained farmers and a relief for succession farm partnerships.
34:42 The maximum amount of enhanced stock relief for farmers who are partners in a registered
34:46 farm partnership will be increased from 15,000 euro to 20,000 euro in line with the maximum
34:52 permitted under the EU regulations.
34:55 The land leasing income tax relief will be amended so that it only becomes available
35:00 when the land has been owned for seven years so that it is better targeted to active farmers.
35:07 It is important that the banking sector continues to make a contribution to the Irish economy
35:13 following the support they received from taxpayers during the financial crisis.
35:18 In this context I have put a plan in place to introduce a revised bank levy in 2024 to
35:25 raise 200 million euro.
35:27 I will review the levy again next year to ensure that it remains appropriately calibrated.
35:33 I am increasing Ciarán Corlea excise duty on a packet of 20 cigarettes by 75 cent with
35:38 a pro-rat increase on other tobacco products.
35:42 This will bring the price of cigarettes in the most popular price category to 16 euro
35:46 75 and supports public health policy to reduce smoking levels further in Irish society.
35:53 A financial resolution will be introduced tonight to enact this measure.
35:58 Ciarán Corlea, in light of public health interests, continuing delays to the revision
36:04 of the tobacco products tax directive at an EU level and indeed the programme for government
36:09 commitment to tax e-cigarettes and vaping products, I am proposing to introduce a domestic
36:15 tax on these products in next year's budget.
36:18 Considerable preparatory work will need to be carried out by my department and the revenue
36:22 commissioners in drafting this legislation over the period ahead.
36:27 Ciarán Corlea, due to the important role the charity and community sector plays in
36:33 ensuring that the most vulnerable people across our society are supported, I have decided
36:38 to increase the funds available under the charity VAT compensation scheme from 5 million
36:44 euro to 10 million euro.
36:46 In simple terms, what this will mean for charities is that they will get back more of the VAT
36:51 that they pay on the goods and services that they purchase.
36:57 I am also increasing the threshold for tax relief on the donation of heritage items from
37:02 6 million euro to 8 million euro.
37:04 Ireland, as we all well know, has a very rich sporting culture and I believe we need to
37:10 fully utilise the opportunities to invest in our sporting facilities and clubs.
37:16 Our taxation system currently provides a number of reliefs to sporting organisations and to
37:21 charities but I believe that there is potential to do more.
37:25 To assist our national governing bodies with their capital programmes, I intend to examine
37:30 how the tax system can be utilised to further support these organisations with the upgrade
37:35 of their facilities or the development of new ones.
37:38 This will involve examining the tax treatment of long-term strategic development funds established
37:44 by approved sporting bodies to promote capital investment in our sports facilities and I
37:49 will conclude this work next year.
37:51 Additionally, I am committed to considering how our tax system can better encourage and
37:56 support philanthropy and I will be engaging extensively over the period ahead on this
38:01 issue.
38:02 Cian Chorle, the prospect of headline budgetary surpluses in the coming years affords us an
38:08 opportunity to prepare now for the challenges that we know are on the horizon.
38:14 I will now provide more details in relation to the two funds that we propose to establish.
38:20 We will put in place a new savings fund to be called the Future Ireland Fund using some
38:25 of the windfall corporate tax receipts.
38:28 To be clear, this is not a rainy day fund because it is for costs that we know are coming
38:34 our way in the years ahead.
38:37 This fund will benefit all of us, the children of today, people of working age today, our
38:42 pensioners and yes, also future generations.
38:47 It will help us to meet the costs of running the state in the future and it will make a
38:51 contribution to the cost of health care, of pensions, home care and much more.
38:57 For example, we know we are facing considerable costs in relation to an ageing population.
39:03 Age related spending will be around 7 to 8 billion euro higher by the end of this decade
39:09 than it was at the start of this decade.
39:11 This is simply the standstill cost and does not involve any new measures or any new policy
39:17 initiatives.
39:18 The twin transitions of digital and climate, while more difficult to quantify, will also
39:23 involve significant costs.
39:25 It is imperative that we act now.
39:29 I am announcing that we will invest 0.8% of GDP annually into the Future Ireland Fund
39:35 from 2024 to 2035.
39:38 This will be a sum of approximately 4.3 billion euro in 2024.
39:44 In addition, we will transfer seed funding of just over 4 billion euro into the fund
39:49 next year from the dissolution of the current National Reserve Fund.
39:54 It is expected that with a funding level of 0.8% of GDP annually, the fund could potentially
40:00 reach a total of 100 billion euro by 2035.
40:06 It is intended to preserve the fund over a longer period and that the investment return
40:10 would be used to support government expenditure.
40:13 It will be a matter for the Government of the day, when the drawdown occurs, to use
40:17 the return from the fund appropriately.
40:20 And Ciarán Corlea, there are of course risks that could crystallise over the contribution
40:25 period ahead, such as a national or global economic shock or reduced corporate tax receipts.
40:31 But as we stand here today in this House, this is a realistic and an achievable plan
40:36 for Ireland and the window of opportunity will not remain open indefinitely and we must
40:41 seize it now.
40:43 The second fund, the Infrastructure, Climate and Nature Fund, will also invest a portion
40:48 of the windfall corporate taxes and is intended to operate in a counter-cyclical manner in
40:54 terms of fiscal and economic stress to provide resources for capital investment.
40:59 The fund will grow incrementally, by 2 billion euro for 7 consecutive years, when it will
41:05 reach 14 billion euro plus interest accrued.
41:10 In 2024, the first 2 billion euro contribution will come from the dissolution of the National
41:15 Reserve Fund.
41:16 While it is important that we prevent a reoccurrence of stop-start public capital investment as
41:23 we have seen in the past and that we invest through the economic cycle at whatever stage
41:28 of that cycle we may be, we must also consider the known challenges facing our society and
41:34 economy.
41:35 The impact from rising global temperatures as a result of climate change will affect
41:40 all parts of our society.
41:42 No one will escape.
41:44 This Government has taken action to manage the transition to a climate neutral and climate
41:49 resilient society in the knowledge that it will have macroeconomic and fiscal implications
41:54 for all of us.
41:55 In this regard, the Infrastructure, Climate and Nature Fund will have a climate and nature
41:59 component worth over 3 billion euro, the aim of which is to help the achievement of carbon
42:05 budgets through capital projects where it is clear our climate targets are not being
42:10 reached.
42:11 Both funds will be vested in the Minister for Finance and will be managed and invested
42:16 by the National Treasury Management Agency, subject to an investment policy and investment
42:21 strategy.
42:22 Both funds will be audited by the Comptroller and Auditor General.
42:26 I have this morning secured Government approval for the Heads of Bill, providing for the establishment
42:31 of these two new funds and I do hope, Kean-Córlea, that there will be a broad consensus across
42:37 this House in support of this strategically important legislation for our country.
42:43 Kean-Córlea, as we stand here today, I believe there is so much in our country that we can
42:49 be proud of; full employment, a growing economy, budget surpluses, a national debt that is
42:54 falling, a population that is rising and now a plan to secure the future.
42:59 We can never take any of this for granted and we must always strive to do better.
43:04 Today's budget provides help to households and businesses.
43:08 It reaffirms our commitment to good quality public services and to investment in modern
43:12 infrastructure.
43:14 It seeks to unlock the further potential in the enterprise sector.
43:18 It underpins our determination to tackle climate change and the budget seeks to make the future
43:24 safer for all of us.
43:26 We face challenges for sure, but we face them from a position of strength and we face them
43:32 together.
43:33 I commend this budget to the House.
43:34 Thank you.
43:35 (Applause.)
43:35 (END)