We take a (slightly) tongue in cheek look at the impact of Budget 2025. Jack Chambers first budget was set against a backdrop of one of the biggest financial one off wins in the history of the state. The big picture numbers, are as follows, an overall package of €10.5 billion comprised of once-off measures of circa €2 billion, new current expenditure of €6.9 billion, new capital expenditure of €1.6 billion and permanent tax changes of €1.4 billion.
This was undoubtedly a Late Late show budget. There was something for everyone in the audience with an eye on the election. It was also a terribly bland and grey budget, lacking in a big plan or a long term vision. If every there was a Let them eat cake budget, this was it and it represents an opportunity missed.
Family
Firstly if you have a family, Child benefit bonanza, with a double payment in November and December. If you+/ your partner are expecting the government will pay you a princely €280 for producing a potential future worker / taxpayer and helping address the burgeoning demographic imbalance. That’s a couple of months of nappies. Thanks Jack!
Those of you who need IVF were tantalised with talk of free IVF but there was vanishing little detail on this or how to apply for it or when it will come into play.
Free Travel Scheme
We have had a couple of septuagenarian contractors over the years so as not to be accused of being ageist we’re including this, the companion pass under the free travel scheme will be extended to all people aged over 70 from September 2025. Going after the grey vote here.
Tax & Excise Changes
This is meat and drink of it.
For all you smokers out there, ouch! A quid on a box of fags. I have stood outside manys the building with contractors over the years. The day of the €1 cigarette is fast approaching. Budget 2026 at the latest. The excise increase was pitched as supporting “public health policy to reduce smoking levels in Irish society”. Yeah right. What products out there have the most inelastic demand curves, lets heap the tax on those. Consumers in Spain pay €5.60 for the same product.
I’m expecting Michael O’Leary to offer€ 9.99 Fag Run Fares to Santiago de Compostela Airport in the Camino off season. A smoker would only need to buy 40 cigarettes for the trip to make sense – what’s not to like? I wonder was the growth in Cigarette Tourism factored into the Carbon Budget? As many have turned to vaping to try and kick the dreaded coffin nails the Government have now got vaping in their sights with excise to be applied on vaping liquids from mid 2025. You cant catch a break and they go after any and every one of life’s little pleasures
Commuters
Given the price of home in the capital is fast approaching the annual salary of a premiership footballer many people have bought in the exurbs. Portlaoise-Dublin-Portlaoise is many people’s daily commute. For those stranded commuting in their cars because of the inept management of the Public Transport network and our inability as a county to deliver large scale infrastructure projects for anything less than 5 times the original price the increase in both petrol and diesel dilutes the positive impacts of some of the tax changes. Or rather the incidence of the tax take has been shifted from everyone to people who commute. Put it another way you hapless commuters are paying for the USC reduction.
EV Depreciation
Yeah, not much mention of this. A lot of people are coming to the end of PCP EV purchases where the future value is way off as no one wants to buy second hand electic cars. An additional 10K in BIK allowances does nothing for anyone who signed up to a PCP deal for an EV in a private capacity. You guys are stuck paying that balloon payment.
Income Tax
On the positive side of things the standard band has been increased by 2,000 to 44k – this is essentially a 4.76% increase in the band. Given wage inflation over the past three years in the public sector in particular this is essentially almost reverse indexation and resetting the clock to where it was. Smart marketing, we’re selling it as a benefit but really we’re just dialling the clock back a bit
Are there any real positives?
The Small Benefit exemption has been increased, this is a win. You can now get another €500 tax free from your employer, but wait as its good news it wont come into play until next year.
Some changes to CGT/CAT limits are welcome but they are not keeping pace with the rate of house price increases
The limit on relief for angel investors cashing out of investments in start-up increased from €3 million to €10 million. Nice for those who have that kind of cash.
Oh yeah, they’re opening a Consulate in Malaga, very helpful for all those nice expatriates who live in that part of the world. Handy for the Gardai at least as they’ll have somewhere to work from when working with the Guardia Civil to try and apply European Arrest Warrants and get extraditions underway.