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Leo Varadkar defends smaller package of one-off budgetary measures

TAOISEACH LEO VARADKAR has defended the government’s approach of having a smaller package of one-off measures in the upcoming Budget.

Varadkar said inflation has moderated and wage increases across the economy have outpaced rising prices since last year.

Speaking to reporters at a Fine Gael enterprise conference at South East Technological University in Waterford, he said: “Since the last budget, there’s been a 7.8% increase in the minimum wage – gone up faster than the prices are rising.

“That’s not true for everyone, of course, but that is what’s happened since the last budget.

“So there will still need to be one-off measures, but it isn’t going to be possible to have them at the scale that we had them last year.”

The Fine Gael leader acknowledged that prices are rising, but at “roughly half the rate at which they were rising last year”.

It was put to him there are still grocery and fuel price increases, health insurance rises and the cost of borrowing has gone up, and he replied: “That’s not to say for a second that people aren’t still struggling to make ends meet. Of course they are.

“That’s why there’ll be one-off measures in the Budget which will be in people’s pockets before Christmas.

“And there’ll be a whole set of measures announced in the Budget that will kick in in January: pension increases, welfare increases, a further increase to the minimum wage and income tax reductions which will help working people in particular to pay the bill essentially in January, February.”

Varadkar said there will also be measures to help households with energy costs.

Minister for Public Expenditure Paschal Donohoe said the reduced one-off measures “will still be meaningful” and that helping with the cost of living will be a “really important feature of the Budget”.

Asked about mortgage relief and support for landlords, Mr Donohoe said the Government recognised “a need to do more” for the rental sector.

“Any such help does need to be targeted because while we are aware of the challenges that many are facing at the moment, the Government’s also seeking to respond back across a whole variety of different issues.”

Asked if the government would be putting aside at least €6 billion from a projected corporate windfall of up to double that, Varadkar said some of the money will be used for a future infrastructure fund, paying off debt and protecting against an ageing population.

“There will be a surplus of around 10 billion this year and we anticipate and can reliably anticipate a surplus of around 10 billion next year,” he said.

“We’re going to set up funds for the future, ones that will help pay for future pension costs, because our population is ageing. We want to be able to maintain the buying power of pensions.

“And then secondly, a fund that we can use for future infrastructure, because one of the big mistakes we’ve made as a country, if you look back over the past couple of decades, is any time the economy goes down the first things that get cut are the capital budgets.”

He said building up an infrastructure fund will allow projects to go ahead in the event of a future economic downturn.

“That has an economic benefit as well because that’s precisely the time you want to be pumping money into the economy, when it’s slowing down or when it’s in recession, because that’s when you need to create employment and also when you need to give sectors like the construction sector a boost.”

He expressed caution over making promises on figures.

Varadkar also said the government will be examining ways to reduce prices for businesses.

Enterprise Minister Simon Coveney added: “We want to, as a government, use both one-off measures between now and the end of the year, and also in next year’s budget, to be able to target and support businesses where we can to make sure that we can help with their cash flow, and obviously help with the cost of doing business, which has increased in Ireland in recent years, despite the economic growth that we’ve had.”