Normally, budgets are a balancing act between raising and cutting taxes, balancing spending and keeping the deficit from soaring. Ireland has no such problems: the budgets announced today have rained millions on the country’s citizens, thanks to huge tax spending by tech multinationals, with Apple at the helm. Free money for everyone, paid for by Silicon Valley.
Dublin has a staggering surplus of 8% of GDP. The main reason is the fine of 13 billion euros imposed on Apple for non-payment of taxes, ordered by European justice after the rejection of the Irish government itself. His defeat in court earned him an avalanche of money which is added to the more than 10 billion euros in surplus which it already had previouslygiven the rise in profits reported by Dublin-based multinationals. Ireland is the preferred destination for big companies in the EU thanks to a combination of English, one of the lowest corporate taxes in the bloc and its proximity to the major continental powers.
And taking advantage of the fact that they are on the eve of the elections, scheduled for early 2025, the Minister of Finance, Paschal Donohoe, decided to throw money at citizens like he was a royal page throwing candy in a cavalcade. Suddenly, the minimum salary greater than 1,000 euros per yearannounced that he would deliver 250 euros to all citizens to pay electricity bills, he froze VAT on electricity at 9%, deflated income tax brackets (i.e. it will be necessary to charge more than before to pay the highest rates), removed taxes on “bonuses” for workers who earn less than 1,500 euros and reduced social security contributions by 3%.
To this is added a avalanche of help to all types of people: 200 euros for people living alone, rental assistance, 400 euros for low-income families with children, 400 euros for disabled people, double payment for dependency, free textbooks and meals for children in compulsory education, free public transport for children under 10 and over 70, and a 650 euro increase in unemployment and pensions.
As if that wasn’t enough, there will also be a strong 10% increase in the health budgetto create 500 new beds, improve ambulances and finance in vitro fertilization sessions and hormonal therapies. They will also finance 10,000 new social housing units and 6,4000 affordable housing units, the construction of 350 new schools and the hiring of more than 2,300 teachers.
This whole avalanche of spending would be spectacular in itself. But Donohoe also promised save Apple’s 13 billion in a special funda sort of “sovereign fund”, and, over the years, uses all this money and the profitability it provides to finance a renewal of the country’s infrastructure.
The indiscriminate injection of money can be a major asset for the government in the next elections. The centrist coalition between the two large traditional parties of the center and center-right (Fianna Fáil and Fine Gael) and the Greens is once again close to an absolute majority in the polls. In contrast, left-wing Sinn Féin, which was once well ahead in the polls two years ago, has fallen to third place. Governing and budgeting is not so difficult when you have money saved.
