As the dust settles following the announcement of Budget 2023 yesterday (Tuesday, September 27), farmers will be wondering how it will impact their pocket.
The €11 billion budget outlined by Minister for Finance, Paschal Donohoe, primarily focused on the ongoing cost-of-living and energy crises.
Agriland, along with financial services firm BDO Ireland, have examined several case studies to determine what the impact of the government’s financial measures will be on the farming sector.
Figures in these case studies are based on statistics included in the Teagasc National Farm Survey 2021 and experts working within the industry.
Beef farmer case study
In this article, we consider how Budget 2023 will impact a part-time beef farmer with a herd of 20 suckler cows (including 20 calves and 16 two-year-old animals).
He has a full-time job as a mechanic earning around €35,000 and is farming during the evenings and weekends.
The gross output of the farm is around €42,000, which includes direct payments. Total annual costs are running at €31,000 to leave an annual profit of €11,000.
The farm household also has a secondary income from the farmer’s wife, who works as a primary school teacher.
The couple have two children, aged 19 and 21, both of whom are in third level education.
According to the BDO Ireland analysis, the part-time beef farmer and his spouse will see an increase in their take-home pay of €1,261 to €69,096.
This can be attributed to an almost 7% saving in tax, due to changes outlined in Budget 2023.
The majority of the saving, €1,180, is through adjustments in the income tax bands; the couple will save €81 on Universal Social Charge (USC) payments.
Although the tax credit for college fees for the couple’s two children is included in the income tax calculation, the budget has reduced student contribution fees by €1,000, leading to a saving of €2,000 for our test-case family.
The farm family will also be able to avail of €600 worth of electricity credits which will be allocated to every household.
This will be paid in three €200 installments, the first of which will be made before Christmas.
The farmer will continue to benefit from a double deduction in marked gas oil (green diesel) as there was no change to section 664A in Budget 2023.