The ‘Cost of Living’ budget will include cuts to childcare costs

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Reducing childcare costs, the biggest welfare package ever and lower taxes will form the basis of October’s ‘cost of living’ budget, the government has said.

Appearing to rule out an emergency budget, Taoiseach Micheál Martin said the measures will have to be “comprehensive and sustainable over a longer period”.

Tánaiste Leo Varadkar said a social benefit package of more than €5 a week on the pension would be needed in the October budget.

Mr Varadkar said there will need to be a substantial social protection and pension package greater than in 2022.

Last October’s budget saw the government announce a package to increase basic social benefits by €5 a week, at a cost of around €450 million. The increase in payments took effect in January.

Although Mr Varadkar said the extent and details have yet to be worked out, the government’s determination to meet the cost of living is clear to all three parties.

Mr Varadkar said that was because the spike in inflation was not temporary, adding “it could last for years”.

Mr Martin said childcare fee reductions could be in place by Christmas while Mr Varadkar said: ‘We are committed to improving the supply of childcare, the quality of childcare, in terms of working conditions and in particular to reduce the cost of childcare for working families.”

Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath briefed the government’s three party leaders on the broad parameters of the October budget, which will be set out in the Summer Economic Statement, scheduled for release in a few weeks.

Ministers are increasingly at odds over whether to introduce cost-of-living measures ahead of the budget.

While Mr Martin, Mr Varadkar, Mr Donohoe and Mr McGrath appeared to rule out any short-term action, other Cabinet members last night said such interventions were ‘fully possible’.

Vacation Earnings

At the Council of Ministers today, ministers will approve a scheme allowing students to earn up to €6,552 over the summer without impacting their scholarship.

Higher Education Minister Simon Harris will seek government approval to allow students to earn more during the summer holidays and ensure students do not lose their scholarship eligibility.

This will increase the disregarded vacation income from €4,500 to €6,552.

The move is also designed to help businesses – particularly tourism and hospitality – facing skills shortages over the coming months.

Supply issues

In the meantime, the European Union has drawn up contingency plans to decide what will happen in the event of a supply shortage, European Commission President Ursula von der Leyen said.

“If we cut the heating in Europe by two degrees, or the cooling, minus the air conditioning, that would offset the entire delivery of Nord Stream 1,” Dr von der Leyen told reporters, referring to the main gas pipeline from the Russia. To Germany.

“We have contingency plans in place that include the full breadth of steps needed, from the efficiency element to energy savings and prioritization of needs.”

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