Budget 2024 Ireland: How Budget is Created and What is in it?
Ireland Budget 2024 was announced on Tuesday, 10 October 2023. This areas of big impact on the Irish people was taxation, cost of living supports, supports for energy costs, social welfare, health, housing, education and employment
Article 11 - Irish Constitution
“All revenues of the State from whatever source arising shall, subject to such exception as may be provided by law, form one fund, and shall be appropriated for the purposes and in the manner and subject to the charges and liabilities determined and imposed by law”.
The one fund as stipulated by the article 11 is the central fund called the Exchequer. All government revenues is paid into this fund and the government expenditure is funded from this source.
Irish Economy Revenue Sources?
Taxation: Taxes paid by people and businesses remains the main and largest source of revenue for the Irish government. Income taxes, corporation tax and VAT makes up a very large part of the tax revenue.
Appropriations in Aid: This is the Day-to-day revenue received by government departments and retained to meet expenditure instead of being paid into the Consolidated Fund. It represents some funds that is generated by Government Departments and bodies for their own use. Appropriations in aid contributes significantly to the revenue sources for Ireland.
Non-Tax Revenue Sources: The revenue sources in this category includes:
- Income from the Central Bank of Ireland
- Dividends from shares owned by Government
- The National Lottery
Capital Receipts: These receipts income include
- Receipts from EU
- Loan repayments to the Exchequer.
How the Government Revenue is Spent?
The Irish Government spends money typically in delivering public goods and services to the Irish people. These Government spending is categorised in 2 areas.
- Current Expenditure
- Capital Expenditure
Current expenditure covers day-to-day expenses on wages and pensions of public/civil servants; running costs of government departments, agencies, and non commercial state bodies (e.g. light and heat), social welfare payments (e.g. old age pensions) and interest payments on the National debt.
Capital expenditure includes spending on acquisition, upgrade and maintain long-term physical assets (such as roads, bridges, hospital buildings and schools) and on non-physical assets (such as software).
The Budget Process
The Oireachtas (parliament of the Republic of Ireland) plays an important role in the budget process. As the budget is key to decisions on how natural resources are allocated in Ireland, the Oireachtas participation is crucial. They play a fundamental role in authorising business decisions and budget scrutiny to ensure that the government is held into account. The parliament carries out this role through the Committee on Budgetary Oversight. Their responsibilities include
- Carrying out ex-ante (before the event) scrutiny of revenue and expenditure options before the budget
- Carrying out ex-post (after the event) scrutiny to evaluate budget measures or to assess how budgeted spend or revenue projections compare with outturns
- Monitoring macroeconomic developments and fiscal risks
- Engaging with the Irish Fiscal Advisory Council (IFAC) to receive its regular fiscal assessments
- Preparing a pre-budget report each year
The budget process begins in April of the year before the budget year begins.
April: Stability Programme Update (SPU) : National update under EU Stability & Growth Pact: sets fiscal rules & budget timetable. It is provided to Committee on Budget Oversight for comment
June: Spring/Summer Economic Statement (SES): An update on fiscal space estimate is provided to the Committee on Budgetary Oversight to review and comment
June: National Economic Dialogue (NED): An open and inclusive exchange dialogue on competing economic and social priorities is arranged. This forum is attended by a selection of NGOs & environmental groups, representatives from business, trade
unions, academic & research institutes, and the diaspora.
July: Mid Year Expenditure Report (MYER): Reports on expenditure trends; sets expenditure ceilings and basis for changes since budget day; updates projected expenditure
July: Tax Strategy Group Papers (TSG) published: This report includes costed options on (primarily) tax and welfare measures and circulated to relevant sectoral Oireachtas Committees
June-September: Estimates Process: Bilateral negotiations between Dept. of Public Expenditure & Reform and Departments. Based on spending limits in MYER, cost of providing existing level of service (ELS), along with any new/additional initiatives
October: White Paper on Receipts and Expenditure: Published Friday before the budget
October: Budget Day: Continue established practice of incrementally improving Budget Book information, including distributional impact where possible. Departments of Finance, Social Protection produce distributional analysis using SWITCH – the
ESRI’s tax-benefit simulation model – possibly before passage of Finance & Social Welfare Bills
During the annual Budget process an allocation of spend for the coming year is agreed between each Department and the Department of Public Expenditure and Reform. This amount is then voted on (approved) by the Dáil and is called Voted Expenditure.
Non-Voted expenditure is not subject to annual Dáil approval but is allowed for under existing laws. It includes spending such as interest on the National Debt and Ireland’s contribution to the EU Budget. It also includes costs such as the Houses of the Oireachtas and the salaries of judges.
Pre Budget
This phase takes place from April to early october. The Budgetary Oversight committee receives inputs and submissions from several department and groups. For instance they are informed of the evidence-based research and analysis carried out by the independent Parliamentary Budget Office (PBO). They also receive fiscal assessment from IFAC (Irish Fiscal Advisory Council). Finally they publish a white paper on receipts and estimates
Budget Day
This is a very important day in the Houses of the Oireachtas calendar. On budget day, the Minister for Finance and the Minister for Public Expenditure, NDP Delivery and Reform present the Budget Statement to Dáil Éireann. This outlines the general economic and fiscal outlook and the changes the Government proposes to make to taxes and spending. TDs have the opportunity to make speeches in response to the Budget Statement.
After the Budget Statement, the Government moves financial resolutions, and Dáil Éireann debates these resolutions. The debate may be held over a number of days. If the Dáil does not agree to the Government’s financial resolutions, a vote is called and the resolutions are declared carried or lost.
Post Budget
In order to implement the changes it proposes in the Budget Statement, the Government may need to ask the Houses of the Oireachtas to amend certain legislation. It does this by introducing Bills. For example, to change the amount of tax levied, the Government introduces a Finance Bill and to change social welfare payments, the Government introduces a Social Welfare Bill. These Bills are normally debated and passed by the Houses of the Oireachtas by the end of the year.
Budget 2024 Expenditure
In the budget 2024, the voted expenditure was €96.6 billion and non-voted expenditure €13.8 billion, with €2,195 unallocated resources to be allocated to department at a later date.
2024 Budget Allocation
Social Protection
€25.2 billion
Health
€22.5 billion
Housing
€6.9 billion
Education
€10.5 billion
Transport
€3.6 billion
Justice
€3.5 billion
Debt Servicing/EU Pmts
€13.8 billion
Additional Departments
€22.1 billion
Social Welfare Support
Budget 2024 allocated funding for income supports, as well as employment and community services to enable people to participate in society in a positive way and to alleviate poverty. There was provision for additional funding for some increase in a wide range of weekly social insurance and social assistance income support schemes such as:
- Pensions;
- Working age income and employment supports;
- Income supports for illness, disability and carers;
- Child Benefit payments; and
- Assistance with key household bills.
>> More: Budget 2024 Ireland Social Welfare
Cost of Living Payment Support
- Electricity: €450 Electricity Credits (3 x €150) for all households paid between 2023/2024 in three instalments
- Fuel Allowance: €300 lump sum payment to be paid in winter 2023
- Living Allowance: €200 lump sum payment to be paid in winter 2023
- Child Benefit: Double month to be paid in winter 2023
- Working Family Payment: €400 lump sum payment in the winter of 2023
- Qualified Child Increment: €100 lump sum payment in the winter of 2023
- All Weekly Welfare Schemes: Double week in Jan 2024
- Lump Sum Payment: €400 Lump sum payment in winter 2023
- Foster Carer Allowance: Double payment in winter 2023
- €250 million Higher Education Student Contribution, Schools Capitation, School Transport, State Exam Fees
- €250 million Business Supports
>> More: Working Family Payment Budget 2024
Frequently Asked Questions
Lynda Unogu MBA IMC (CFA UK) PMP
Lynda holds an MBA from University College Dublin and worked previously in product roles within financial services and technology firms like Mastercard, Citi Bank and JP Morgan. She constantly seeks to apply her expertise in financial services to the field of personal finance with the goal of helping people navigate the complexities of the finance.