Farmers across the country are still digesting the contents of Budget 2023, which was presented by Minister for Finance Paschal Donohue to the Dáil yesterday (Tuesday, September 27).
The €11 billion budget saw the government outline various economic and welfare measures focused on the deepening 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 have on the farming community.
Figures in these case studies are based on statistics included in the Teagasc National Farm Survey 2021 and experts working within the industry.
Dairy farmer case study
In this article, we consider how Budget 2023 will impact a full-time dairy farmer who manages a 90-cow herd.
The farmer’s annual gross output is estimated at €282,000, which includes direct payments. Total annual costs are running at €183,000, with an annual profit of €99,000.
The household has a secondary income from a spouse, who is employed off-farm. She is earning an annual salary of €45,000.
The couple also has three children, aged 6, 8 and 10.
According to the analysis by BDO Ireland, the family’s combined take-home pay will increase by €1,661 to €97,753, as a result of a 3.47% tax saving due to changes in Budget 2023.
The income tax paid by the couple, after tax credits are deducted, will fall from €36,080 to €34,550, a difference of €1,580, while they will pay €81 less in Universal Social Charge (USC).
The farm family will also be able to avail of a range of budget supports, including €600 worth of electricity credits which will be allocated to every household.
Minister for Public Expenditure and Reform Michael McGrath confirmed that this will be paid in three €200 installments, the first of which will be made before Christmas.
The dairy farmer may also avail of the Temporary Business Energy Support Scheme (TBESS) which was introduced in the budget to help businesses and farms with their energy costs over the winter months.
The scheme, administered by the Revenue Commissioners, will be open to businesses that carry on a Case 1 trade, are tax compliant, and have experienced a significant increase in their natural gas and electricity costs.
BDO also noted that the dairy farmer will continue to benefit from a double deduction on marked gas oil (green diesel) as there was no change to section 664A in Budget 2023.
This measure aims to insulate farmers from any carbon tax increases above the rate of tax that applied in 2012.
There will be a once-off double child benefit payment in November, which will be worth an extra €420 to our test-case family.
From autumn 2023, the family will be able to avail of free primary school books, resulting in an estimated annual saving of €330.