Budget 2027

3. Deputy Mairéad Farrell asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation to give an update on the way in which public expenditure within budget 2027 will impact on workers and families struggling with the cost-of-living. [74674/26]

Can the Minister update the House on how public expenditure within budget 2027 will impact on workers and families struggling with the cost of living? I noticed that he used the term "a better State". I like that term but I hope it is something we can achieve. I know it is a bit off topic. I am concerned it will not be if everyone is struggling with the cost of living, as they are.

Budget 2027 builds on the sustained investment provided by the Government over recent years to support household living standards. It focuses on providing a package of permanent tax and expenditure measures, including broad-based and targeted changes. This will deliver sustained improvements in living standards, greater certainty for households and enhanced supports for more vulnerable households. In relation to social protection, budget 2027 provides an additional €2 billion, bringing the total allocation to €30.9 billion in 2027. The main measure is a €10 increase in weekly social protection rates for more than 1.6 million recipients. This will maintain the adequacy of welfare rates against inflation. The fuel allowance will increase by €5 per week, helping more than 460,000 households. We have also increased the living alone allowance, benefiting older people and others living alone. The budget also provides for a new cost-of-disability payment of €500 to support 238,000 people in receipt of long-term disability payments. These measures reflect the value of targeting support through the social protection system and directing resources towards households where they can have the greatest impact. Overall, this funding will reinforce Ireland's strong social safety net, which is one of the most effective in the EU at reducing the at-risk of-poverty rate. It also provides a range of additional supports to ease pressure on families. Increasing the higher rate entry burden of income tax by €2,500 and increasing tax credits will reduce the tax burden for many families. The €30 per week increase in the working family payment income threshold will support lower-paid families. Higher levels of investment in childcare will support enhanced affordability for parents. Maximum childcare fees will fall from €735 to €550 per month, saving families over €2,000 a year. There will also be a permanent reduction in the student contribution fee of €150. These measures are complemented by wider investment in public services and infrastructure to support households and address living costs. This includes investment in housing and measures to improve energy efficiency, with more than €750 million being provided to address specific housing needs including the retrofitting of social homes and €655 million in capital funding for SEAI residential and community energy upgrade schemes.

I was there on budget day when the Minister went through the measures. There was an expectation on budget day that something would shift and there would be a change for people in terms of the immense pressure they are under. I do not recall in my few years in the Dáil there ever being quite as much focus on what would come out of budget day in the hope that it would help people. People were let down. They felt genuinely disappointed. A key example is in relation to home heating oil. In the run-up to the budget, it was promised that the Government would get the balance right on home heating oil. There was an announcement of €43, which is just nothing in terms of the actual impact of the cost-of-living crisis. Since the start of the year, a fill of home heating oil has increased by €713 or 75%. Does the Minister feel that perhaps the Government did not get it right in finding a genuine shift for people on the cost of living?

My colleagues and the Tánaiste in the Department of Finance made the decision around what was possible in the taxation of home heating oil. One has to look at all the measures in the round, including the interventions we made on fuel allowance and all the other rate changes targeting the cost of living as a specific issue, in particular for low-income groups. My Department and the Department of Finance model the impact of budget measures through the ESRI SWITCH model. It offers a robust view of the distributional effects. It shows that the lowest two income deciles had the strongest improvements, ensuring that investment is targeted towards households most in need. That has to be critical to how we make decisions as we moderate day-to-day spending. I know Deputy Farrell has a different view on that. She wants to exponentially increase spending but that is not sustainable, affordable or something we can deliver in the medium term. We have targeted investment and supports. We know the distributional impact is best concentrated in the lowest two income deciles and rightly so.

The Minister can talk about my priorities but I will talk about his. The ESRI was in front of the Committee on Budgetary Oversight this week. A key thing it speaks about is child poverty. We keep hearing that child poverty is a core objective of this Government. If it is one of its core objectives, it is failing miserably on it because 22.7% of children live in poverty once housing costs are included. That is an outrage. It is quite shocking that there is not more outrage about it. We should be caring for our young people and children. Not only that, the ESRI said in relation to this budget that child poverty is at a standstill. Although it is apparently a priority and apparently this budget did all these wonderful things for the cost of living, the reality for children - we are talking about children - is that it was a standstill budget in terms of child poverty. If the Government cannot look after the children, there is something fundamentally wrong with how it views how a budget should be done.

We did make progress and specified a lot of priority in the social protection package for child poverty. The child support payment and the working family payment have increased. The Minister of State, Deputy Butler, has taken measures with respect to early invention for youth mental health services. Youth diversion programmes have received increased funding with respect to the Department of education and the Department of justice. We have early intervention programmes in terms of new family resource centres. Additional support has been given by the Minister for education with respect to DEIS plus and home school liaison. Equal Start measures are also being continued with an expanded roll-out. We prioritised child poverty not only in the Department of Social Protection but also in other Departments as part of a collective approach led by the unit in the Department of the Taoiseach. This will continue to be a priority over the next series of budgets.