As the curtains billowed in the warm summer breeze in the Whitaker Room at the Department of Finance, the mood lacked the customary tranquillity of the season.

When Minister for Public Expenditure Michael McGrath and the Minister for Finance Paschal Donohoe entered the room after a lengthy Cabinet meeting, they walked by the framed covers of budgets past.

The dark hues of Budget 2010 and its ilk facing them as reminders of those previous times when people feared that living standards were about to tumble.

The context is very different this time of course.

Record numbers are at work and the Government still has financial firepower to offer some protection to households struggling as inflation bites.

Indeed, some of the early words in the Summer Economic Statement are imbued with an apparent optimism.

Damage or scarring to the economy as a result of the pandemic has been limited and the economic recovery has been rapid.

Yet just a few lines later there is an acknowledgment of the "erosion of real incomes" and a glum forecast, which warns that the risks to the economic outlook "are now firmly tilted to the downside".

To help people deal with all this, the way has now been cleared for a Budget package totalling €6.7 billion.

Additional spending will amount to €5.65 billion and tax changes will run to €1.05 billion.


Read more: The Summer Economic Statement: What you need to know


This money is likely to deliver increases in welfare and pension payments and possibly a cut to student fees.

The price reductions on public transport are also likely to remain in place.

Then there is another tranche of money which will be funded by the projected budget surplus that could run to €2 billion.

This will be used to deliver once-off payments that will look to help people with rising energy prices and other cost of living demands.

These payments are likely to kick-in from Budget day on 27 September.

They will be targeted at those most in need, but some of the payments will cover all adults.

There has not been a detailed discussion yet among ministers about these once-off payments, but they are crucial to the Government being able to plot its way through an anxiety laden winter.

Opposition parties are adamant that Government should intervene now and help people before they fall further into debt.

However, it seems the Coalition will resist this pressure and argue that money to help pay the bills in the autumn is more beneficial.

That is because the cost of heating and lighting homes rises from autumn onwards.

One area where they might be some movement before the Budget is in relation to the back-to-school allowance.

The cost of buying clothes for children returning to school in September places a huge financial burden on families already struggling with rising food and energy costs.

Mr McGrath told RTÉ's Six One that there was awareness of this issue in Government.

It is likely that a rate increase on the allowance will be approved by Government soon.

But the opposition is adamant that a far more extensive list of financial supports should also be approved swiftly.