Five things that Budget 2024 got right... and five it got wrong

MICHAEL McGrath is an accountant. And accountants like to see balance. But looking at the successes and failures of Budget 2024, do the good moves surmount the bad ones less than 18 months out from the next general election?

There was certainly room for innovative use of funding and targeted provision of finances to help an electorate struggling to see the benefit of record windfalls.

We did see some success in education and for childcare provision, but in the key areas that will win or lose an election – housing and health – the Government failed to deliver.

FIVE SUCCESSES 1. FREE HOT MEALS

THE Budget 2024 measures in education are a shining example of how a Government can introduce innovative projects at a relatively low cost.

Social Protection Minister Heather Humphreys will provide a hot meal to every pupil in 1,000 primary schools by 2024, and the other 1,000 eligible schools in the two years after that.

Parents, grandparents and families that aren’t the traditional nuclear family will all benefit and think favourably of the Coalition when it comes to the ballot box. It’ll cost about €100milion a year, but is incalculably beneficial, especially for lower-income households. Additionally, it will provide business in remote and neglected area for companies that will provide the meals.

2. FREE SCHOOL BOOKS

FREE books for all students (bar those in private schools), up to the Junior Cert, will be extended from the already hugely well-received scheme for primary schools. Politicians speak of a ‘Donogh O’Malley moment’ (the decision of the pioneering 1960s Education Minister to provide free education), and these two aforementioned education measures are the closest we have had to that of late.

3. REDUCED USC

THE reduction in the hated Universal Social Charge from 4.5% to 4% may appear relatively minor, but it could be significant on some wage slips. And any cut to this tax – the bank bailout tax as many refer to it – is a good one for taxpayers. It also brings Fianna Fáil a little further along the road to redemption for its past economic sins.

4. WELFARE RISES

THE extra €12 for social welfare recipients also means more money for pensioners, a politically essential move for a centrist coalition the polls say will be overwhelmingly reliant on older voters.

The increases in weekly social welfare payments across the board are permanent, so while the rises are considered by many to be modest in the face of 6% inflation, at least people will keep getting them. And any extra money in a social welfare payment is valued by the hard-pressed in society.

5. RETIREMENT RELIEF

THE move to extend the upper limit of retirement relief on capital gains tax from 66 to 70, as part of the effort to allow people to work longer into life if they choose, is an intelligent one.

If you pass on a farm, business or property up to the value of €750,000 to a child, you don’t have to pay tax. It means it could make sense for a farmer to pass on the farm but continue working on it.

FIVE FAILURES 1. HOUSING

IN his Budget speech, Minister McGrath – again repeating a mantra we are tediously familiar with – acknowledged that ‘housing is the biggest domestic challenge we face today and remains a priority for Government’. So where is the urgency on this, the big one, 18 months out from an election?

There isn’t a single new scheme and no increase to the capital spend at the Department of Housing. Landlords will be underwhelmed with their credit. There was an announcement of €207million to the Croí Cónaithe scheme for cities to bring ‘vacant and derelict units’ back to life for muchneeded housing. I don’t have room here to list all the reasons I have heard from bureaucrats, politicians and county managers for why these schemes can’t (and won’t) be executed. The Coalition has effectively announced here that it has given up on housing.

2. HEALTH

PASCHAL Donohoe spent years as Finance Minister overseeing massive spending overruns by Fine Gael Health Ministers. Suddenly, now he’s Public Expenditure Minister, with power over a Fianna Fáil minister, Stephen Donnelly, we have had months of leaks about the ‘deep concern’ over lack of value at the HSE. When, I ask, was it a highly tuned model of efficiency? The overall spend on health this year is down a billion since last year. There will be contortions with bailouts and all, but we do not, again, have an innovative scheme to tackle glaring problems in the sector. No energy, no urgency… it appears they’ve given up on the other big one, too.

3. THE BANK LEVY

THE levy banks have to pay the Government has been increased to €200million. Two surviving banks (the primary reason you’re still paying USC) – Bank of Ireland and AIB – made €1.2billion and €765million in profit respectively last year. And the latter’s profits soared to €854million for the first half of this year. Anger at this kind of lenient punishment of the banks led to near-terminal damage to Fianna Fáil, but it appears to have forgotten. A huge error.

4. POLICING

THE chairs on the Dáil press gallery aren’t designed for long-term sitting, and I find my football injuries start playing up after an hour. So maybe it was fatigue and frustration or the fact that both ministers had to fill 45-minute slots, but I felt at least 75% of Paschal Donohoe’s speech, the second one, was padding. Justice was passed off without thought. The Government said it funded the recruitment of 1,000 new gardaí, but Templemore hasn’t the capacity to train large number of guards quickly. And gardaí don’t want to follow managements instructions to go to Dublin, because they can’t afford to live there, or find a house. Shameful neglect of a vital area.

5. TRANSPORT

ANOTHER key area discussed just for the sake of it. There was talk of the Carlingford Lough Greenway and its impending completion. But there has been funding in place for at least five years, and plans for about 20 years for a greenway between Malahide, where I’m from, and Donabate, where I live in north Co. Dublin. We’ve been talking about a metro for 20 years, Dart extensions for ten. This is another major area where the Coalition has given up on execution, or even on trying. Innovative, short-term efforts, schemes and focused funding would have been possible and abundantly welcome. If they can’t execute on housing and infrastructure because they can’t find enough builders, where were the innovative schemes to find the workers? They’re out there; some have escaped here from war.