Childcare subsidies will be increased in new budget

The Irish government has used its budget to announce measures to help with energy and childcare costs.

Taxes on heating oil and gas will be cut and then frozen for the lifetime of the government.

Temporary tax cuts on petrol and diesel, which were introduced earlier this year, will be extended.

Childcare subsidies will be increased which will be worth up €2,220 (£1,882) per child per year.

Minister for Public Expenditure Jack Chambers and Minister for Finance Simon Harris

Finance Minister Simon Harris and Public Expenditure Minister Jack Chambers announced a budget package worth a total of €8.65bn (£7.33bn), €7bn (£5.93bn) on spending and €1.65bn (£1.40bn) in tax changes.

Harris raised the threshold at which people start paying the higher rate of income tax from €44,000 to €46,500 (£37,307 to £39,418.05).

He said that, alongside other changes, a single person earning €50,000 (£42,395) a year will pay €700 (£593.25) less in personal taxes.

Harris added that the government had heard "loud and clear" the importance of an income tax package for middle earners.

"People are working hard and doing their best. They need the government to work with them and we get that."

Ireland is in a stronger fiscal position than most European countries as an ongoing corporation tax windfall means it is collecting more in taxes than it is spending on services.

Harris said the government expects to run a surplus of €6.7bn (£5.7bn) this year and a surplus of €9.5bn (£8.1bn) in 2027.

Some of the surplus is being invested in national wealth funds to help with future spending commitments.

A spending watchdog, the Irish Fiscal Advisory Council, has previously criticised the government for not saving more.

Harris said an extra €1bn (£847m) of the surplus would be invested in 2027 on top of the already planned transfer of €4.8bn (£4.1bn).

Other new measures announced on Tuesday include a new tax-free savings scheme, similar to the UK's stock and shares ISA.

It will allow people to invest up to €50,000 (£42,395) tax free, with sums above that taxed at a flat rate of 1% a year.

There will be a new €15m (£12.7m) fund to help keep rural pubs open, with the details of grants and eligibility to be developed in coming weeks.

Chambers restated the government's commitment to fund a range of cross-Irish border projects through the Shared Island Scheme.

These include the Narrow Water Bridge and a teaching block at Ulster University in Londonderry.

He said there would also be €11m (£9.3m) for the Reconciliation Fund, which supports cross community projects in Northern Ireland and additional money for next year's Belfast Fleadh.

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