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A Budget to help people and support business


All will be revealed on Tuesday

All will be revealed on Tuesday

All will be revealed on Tuesday

The Government will have a total of around €10bn at its disposal in the Budget this week to effect permanent and one-off measures — the primary focus of which will be to ease the cost-of-living burden on households.

We live in extraordinary times. After two Covid-era budgets in which the Government unleashed massive resources to protect public health, businesses and jobs, it finds itself again in the breach — in the teeth of rampant inflation, mostly fuelled by an energy crisis.

The economy showed remarkable resilience to rebound from near-total pandemic shutdown, to such an extent that considerable funds are now available to help tackle soaring inflation.

It is critically important, however, that the Government does not add fuel to the inflation flames by spending in an untargeted manner. The same judicious interventions applied during Covid will be required in the Budget this week.

There is some debate as to how best to help people with massively increasing electricity and gas bills: direct credit, along the lines implemented earlier this year; or a cap on energy prices, as has been adopted in Britain.

In general, the Government would be wise not to follow the path laid out by the new UK government, which has embraced a radical tax-cutting, high-spending economic philosophy that could go spectacularly wrong.

Now is not the time to depart from the tried-and-tested economic model that has proved largely successful here, as evidenced by the economy’s impressive recovery after the pandemic.

With the war in Ukraine expected to continue into the new year, it is difficult to determine when the inflation crisis will begin to pass.

In that context, further energy credits at regular intervals — rather than a cap on bills that could substantially reduce the financial firepower required to contend with next year’s challenges — is the more measured course of action.

The Government should also look to more permanent measures, particularly in the area of childcare, to help struggling families cope with mounting household bills. This crisis, too, will pass — to be followed by whatever comes next. Such events are reported, interpreted and explained to the public by a media that is itself under extreme financial pressures.

While the growth of digital media continues at a rapid and exciting pace, many readers still depend on newspapers to make sense of unprecedented national and international events.

One consequence of the current inflation crisis has been an unprecedented spike in the cost of newsprint. That is just the latest challenge in what is increasingly an existential crisis.

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For years, tech giants such as Google and Facebook have made billions in advertising revenue by using the news content of publishers whose business model has been steadily eroded as a direct result. Against that background, the case for a zero-rate of Vat on newspapers, as is the case in the UK and in Europe, is compelling.

In New York on Friday, Taoiseach Micheál Martin said he is “positively disposed” toward abolishing a tax on information and, ultimately, on democracy.

It was a welcome statement and, we hope, an indication that the value to society of trusted news will be affirmed on Tuesday.

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