Ireland to deliver two budgets in one year; one-off package

DUBLIN Reuters -- Ireland will deliver two budgets in one on Tuesday, making the usual spending increases and tax cuts while helping firms and consumers pay soaring energy bills in what they hope will be a one-off intervention.

As one of the few European Union countries that are expected to deliver a budget surplus this year - in Ireland's case due to surging corporate tax receipts - ministers will be able to spend more next year while keeping public finances in the black.

The budget package will be boosted by the government in July to 6.7 billion euros $6.5 billion to increase spending and the amount of money people can earn tax-free to help offset the effects of inflation hitting a near 40 year high of 10%.

It also promised a one-off package that includes grants for companies and cash for households to pay energy bills. The negotiations are close to a conclusion and that will come in at around 3 billion euros, according to two sources.

The budget surplus for 2021 will be less than the 0.9% GDP predicted by the finance ministry, while the provisional 2.2% forecast for 2023 does not include budgetary measures, with most of the one-off payments to be made within a few weeks.

In May, the European Commission predicted that Denmark would be the only country in the EU to deliver a surplus this year, with Sweden, Ireland and Luxembourg joining in 2023.

Ireland would not be taking in less money without the corporate tax haul generated by its large multinational sector. Finance Minister Paschal Donohoe is expected to announce that he's going to stash some excess receipts into the state's currently empty 'rainy day' reserve fund.

The rest will help with additional child benefit payments and allowances that protect people against fuel poverty and hikes to social welfare rates, cuts in childcare costs and a public sector pay deal, and a public sector pay deal.