Budget 2023 the correct scale for now
Ibec, the group that represents Irish business, has said that the underlying strength of the Irish business model and its capacity to generate record tax revenue has put Government in a position whereby it can afford to deliver the correct scale of Budget amidst a challenging inflationary environment.
While today’s Budget is broadly commended by business, Ibec added caution that if the economic environment continues to deteriorate over the winter, a more significantly expansionary fiscal stance may be needed to robustly protect households and businesses. It stated that Government will need to be flexible and responsive to these trends and further measures to support the economy may well be required as we head in 2023.
Ibec CEO Danny McCoy said: “The strength of the business sector in delivering record tax revenue has facilitated an Exchequer surplus and it is encouraging to see this being used to support households and vulnerable businesses.
“Ibec has been consistently calling on Government to address the energy crisis and commended today’s Budget announcement of targeted use of measures to deliver supports for those most exposed to the spiralling energy costs. It is imperative that the supports announced today now work towards having a material impact in offsetting spiralling energy costs. Such supports must work for all sectors of the economy, including experience economy, retail, manufacturing, and SMEs.
“Business is disappointed to see no extension to the 9% rate of VAT and limited new measures to offset this loss. Ongoing support will be needed in the experience economy to protect viability.”
Ibec acknowledged that Budget 2023 contains several commitments that will look to address a range of societal challenges facing the country in policy areas such as childcare and the environment.
Mr. McCoy outlined: “Ireland must offer people good living and working conditions to support economic and social prosperity, remaining attractive to local and global mobile talent pools, as well as foreign direct investment. It is welcome to see several measures in today’s Budget announcement that, if effectively implemented, can make Ireland a better place to live and work.
“The announcement of an increase in the entry point to the top rate of tax is a sensible measure that will help workers struggling with cost-of-living challenges. In addition, today’s announcement of reduced childcare fees will be welcomed by those families finding it increasingly difficult to find affordable childcare services to meet theirs and their children’s needs.”