Government Needs to Resist Urge for Electioneering Budget

Ibec, the group that represents Irish business, says that Budget 2025 should adopt a strategic focus beyond short-term election priorities to ensure that the economy can cope as global uncertainty intensifies. According to Ibec, the Irish economy is now entering a period of major changes in terms of global volatility, with revenues likely to leave less room for risk.

Publishing their Pre-Budget submission, "Sharpening Our Edge," Ibec said state-driven investment competition, geopolitical tensions, and decreasing trade openness all present considerable challenges.

Fergal O’Brien, Executive Director of Lobbying and Influence:

“Every indication is that the Government will likely have less money for Budget 2025 than in recent years, if they are to align with domestic fiscal rules. There is a natural pre-election temptation for the government to exhaust the entire surplus, or even incur debt, to continue providing benefits to households that do not all need them. This approach would pose a considerable risk to the stability of public finances in the future given the current global context and obvious gaps in economic and infrastructural capacity in the economy.”

"Ultimately, the Government has two choices: use the Budget as an opportunity to set out a vision for the country we are building in the next five years or use the surplus to try to put as much money as possible in people’s pockets. If we really want to maintain our high living standards, we must focus on our inherent strengths and think long-term beyond immediate gain. Budget 2025 should focus on global competitiveness in terms of investment offerings and the innovation landscape, as well as investing in critical skills and infrastructure to drive our economy forward. This can only be achieved by addressing strategic priorities rather than diluting resources with widespread handouts."

Budget 2025 Priorities:

• Ireland's economic model faces a new global context. Despite recent turbulence, the economy is stronger, but state-driven competition, geopolitical tensions, and reduced trade openness challenge small countries like Ireland. Competing with larger countries on subsidies is impossible, so focusing on our strengths is crucial for maintaining high living standards.
• To ensure competitiveness, we must avoid past mistakes and address high costs. The National Competitiveness and Productivity Council highlights our rising costs. Budget 2025 should introduce an Employer PRSI rebate, simplify the corporate tax regime, and re-establish the ‘Better Regulation Unit’ to ease business burdens.
• Balancing low carbon goals with reduced energy costs is vital. Budget 2025 should introduce measures like a low carbon super deduction, expand the capital allowance regime, and ringfence €400 million for a Carbon Contracts for Difference scheme, to be allocated over a number of years.
• Investing in skills is essential. With a €2 billion surplus in the National Training Fund (NTF) by 2025, we should use it to upskill the workforce. Treating NTF spending like other specific purpose funds would support this.
• We must address underinvestment in infrastructure and public goods. Budget 2025 should ensure adequate staffing in regulatory bodies, invest €220 million in care sectors, build affordable housing, and introduce a €200 million National Training Voucher scheme.
• We need to future-proof our business model, we need a renewed focus on productivity, growth, and innovation. Budget 2025 should allocate €300 million for education and training, improve qualification recognition for non-EEA nationals, maintain retirement relief for family businesses, and invest €50 million in research and innovation, as well as €160 million in cybersecurity and digital capabilities.

Ends