Tuesday's Budget is set to be the largest for several years with tackling the cost of living being the number one priority.
Government ministers have promised a multi-billion Euro package to ease the pressure. Some measures will take effect very soon after Budget day with others kicking in in the new year.
A key goal is taking some of the hit out of soaring energy bills with many new supports to help households and businesses.
The political battle lines have already been drawn with many opposition parties including Sinn Féin insisting that capping bills is the best approach as it offers consumers certainty. However, the Government has slammed that measure as akin to writing a blank cheque.
What's different in this Budget is that it will be split into two main parts. There is the usual recurring tax and spend measures covering new initiatives and the increasing costs of running existing public services which are also being hit by inflation.
Alongside that is a package of specific cost of living measures made up of once-off supports. The aim is to target help while not baking in extra payments to future spending.
This would give Government flexibility to add more next year as required while lessening the burden on the public finances.
Political focus will centre on the size of the cost of living package and whether it is sufficiently targeted. The price tag has risen sharply from an original expectation of €1bn, then €2bn and now somewhere around €3bn.
In all, this is set to be one of the most consequential budgets for some time as the Government grapples with the hit of inflation. It also wants to see off the political threat posed by the cost of living crisis - seen as a boon for the Opposition.
Here are some of the changes expected so far with details still being finalised.
MAIN BUDGET 2023
Income tax
Recent budgets have introduced gradual rises to the point at which people pay the higher rate of tax. A similar move is expected this year. This would see the current standard rate band go up from €36,800 for a single person with a similar hike for married couples and civil partners. It's also expected that tax credits will be increased.
Tánaiste Leo Varadkar flew a Budget kite earlier this year about the possibility of a third tax rate of 30%. While this is being examined, it will not be part of the upcoming budget given that it would involve a huge system overhaul.
The sell from the Government will be that increases in the bands and tax credits will put more take home pay in people’s pockets. The question is whether this year could see a bigger than usual hike to tax bands given the pressure from soaring inflation.
On USC, there is likely to be an increase to lower bands to ensure that those getting the new higher minimum wage rate will remain outside the top rates of tax.
Excise
In April, excise on petrol and diesel was cut by 15c and 10c. This is in place until October 11. It is expected to be extended for several more months.
Alcohol and beer
Last year’s Budget brought another 50c on a packet of 20 cigarettes although alcohol escaped any price hike. It’s not yet clear whether the old reliables will be hit in Budget 2023.
Social welfare
There have been repeated calls for a €15 increase to weekly payments to help the most vulnerable tackle rising prices. It is now thought that an extra €10 is more likely.
That will help to put a lid on the hikes to recurring spending. The sweetener is likely to be much-flagged double payments for many supports including child benefit. These will be part of the cost of living package.
Childcare
Cutting the cost of childcare has been hailed as a major ambition for the coalition.
Minister for Children Roderic O’Gorman has vowed to reduce bills for parents by half over the next two Budgets. Fees will be subsidised through the National Childcare Scheme.
It has been speculated that fees could drop by 25% next year, but the exact cut has not yet been agreed upon. Parents should see reductions in their monthly bills a few months after the Budget.
Tourism VAT rate
The hospitality sector has been campaigning hard for the retention of the reduced 9% VAT rate which is due to end in February. It’s understood this is still being considered.
Rental sector
In the face of soaring rents, tenants are thought likely to benefit from a new tax credit. This was a feature in the past but was abolished in 2017. However, the exact figure is still under negotiation.
The picture for landlords looks less clear. Lobby groups have been making the case for a reduction in tax due on rental income to keep small landlords in the market. Politically, however, this is a tougher sell depending on whether it can be calibrated to avoid accruing additional benefit to large institutional landlords.
Housing
Housing Minister Darragh O’Brien has publicly said he would like to see the extension of the Help to Buy scheme beyond the end of this year.
The initiative is designed to help first-time buyers fund the deposit for their homes. It’s thought any extension would see a narrowing of the scheme as it has been criticised in the past for not being sufficiently targeted.
Student grants
Higher Education Minister Simon Harris is seeking a widening of the eligibility for student grants. This would come into effect next year.
Windfall tax
Government leaders have repeatedly said they want to introduce a windfall tax on the super-profits of fossil fuel and renewable energy producers.
These generators are benefitting from exorbitant gas prices. However, it is awaiting clarity from the European Commission on its proposals and what that would mean for Ireland. This is unlikely to be clear by Budget day.
COST OF LIVING
Government ministers have promised immediate help in this year’s Budget and the cost of living package will contain those supports. Rather than waiting until January 2023 or later, households and businesses will get this help between now and December.
Energy
Help paying energy bills will be a big part of the package. It seems certain now that the Government will go the route of more energy credits rather than capping bills as proposed by Sinn Féin and others.
Current expectations centre on three extra credits spread across winter. At least one of these will happen before Christmas. They will possibly be worth €200 each but the figures have not been finalised.
An extra fuel allowance payment or increased eligibility is also under consideration.
Social welfare
On the welfare side, in addition to increased rates from next year, it’s expected that there will be double payments soon after the Budget. This is likely for many weekly payments including the state pension as well as the monthly child benefit. This is in addition to the usual Christmas bonus.
Business
Tánaiste and Minister for Enterprise Leo Varadkar has said his Department is working on three measures to help businesses.
The European Commission has already approved two of those - low-cost loans and grants for manufacturers and exporters who have seen a dip in profits.
The third element however is aimed at the bulk of SMEs to help them pay their energy bills. This would be a broad measure applying to the retail, hospitality and leisure sector.
However, this is proving difficult to draft. Mr Varadkar has said it could possibly take the form of a flat cheque or discount off bills. Another area under examination is a possible clawback for businesses making large profits.
Farmers will also benefit from these schemes according to the Tánaiste.
College fees
Higher education minister Simon Harris is seeking a reduction in the current third-level contribution fee set at €3,000. The aim is for any cut to take effect for the current academic year so it is viewed as a cost of living measure.
Public transport
From April, public transport fares were cut by 20% until the end of the year. The Green Party has been pushing in Government for these reduced fares to stay in place for longer as an environmental measure.
