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Budget 2023

This afternoon Ministers Donohoe and McGrath presented their 2023 cost-of-living Budget.

As we all know only too well Covid, war, energy price increases and the return of inflation have slowed growth and demand in our domestic economy.  On the other hand, record levels of employment and levels of corporate and personal tax and VAT receipts have buoyed up the public finances.  All this has meant a surplus of €1 billion this year and an even bigger surplus projected for next year.  Such surpluses, we were warned, are not for frittering.  As well as paying for our increased costs of living, they will be used to bolster reserves and lower the national debt, safely.

We’re working through the detail of Budget 2023 but here are today’s headlines.

Arts Council 2023 award
In the Arts and Culture section of the Expenditure report that accompanies the Budget, it’s heartening to see the continued ‘support of arts, artists and the arts sector as a whole including the Basic Income for the Arts Pilot and maintaining Arts Council funding at €130m for 2023’ along with support for Night-time Economy initiative.  Maintaining Arts Council programme funding at current levels is a good starting point and hopefully, an additional capital allocation for funding the development of workspaces for artists is yet to be confirmed.

For our sector, it remains to be seen how increased costs on so many fronts will impact on production budgets, including artist and arts worker pay and fees, and programmes. For companies negotiating fees with artists and arts workers, note the increase in the National Minimum wage to €11.30 from January 2023 with the Living Wage likely to be in the region of €13.70. Paying the Artist and taking account of cost-of-living increases will be important to ensure artists’ pay does not to fall behind the sector and national rates.

Energy cost supports for public services, community and arts organisations
Like households and SMEs arts organisations, especially arts centres and theatres, are seeing the severe impact of increased energy bills.  Minister McGrath assured us that not-for-profit and voluntary organisations in the Arts, Sports, Gaeltacht and the Community and Voluntary sector, are woven into the fabric of community life across Ireland.  He is making €60 million available in 2022 to ease the pressures for community, sport and arts organisations. We have asked the Department when the energy cost support framework will be in place, how arts organisations can access these energy cost supports and what are the plans for continued support in 2023.

SME 40% Energy Scheme
The much-anticipated Temporary Business Energy Support Scheme (TBESS) 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.  The scheme contributing 40% of increased energy costs up to a maximum of €10,000 in a given month will be administered by the Revenue Commissioners, will operate on a self-assessment basis, and businesses will be required to register for the scheme.  We are checking the eligibility of arts organisations* which are/are not VAT registered and/or registered charities for the TBESS.

The VAT rate for the hospitality industry will increase from the pandemic reduced rate of 9pc to 13.5pc on 23 February 2023.

The combined effect of increased energy costs as well as this VAT increase will add to increased costs of running cafés and bars in arts centres and theatres, a case which we will also be making to the Department in the coming days. Understandably, the hospitality sector will rue their return to the 13.5% rate compared with the 0% Vat rate that will apply to defibrillators, some hormone, nicotine replacement and period products as well as newspapers from January 2023.

SEO cost halved
In line with a commitment in the Programme for Government to modernise licensing laws and support for the Night Time Economy, Minister Donohoe announced that the cost of applying for a Special Exemption Order, which late night venues require in order to open, will be reduced from €110 to €55. Hopefully, this is only the first part-measure suggested by Give us the Night to support the night-time economy with more to be announced when the General Scheme of the Sale of Alcohol Bill is published in the coming months.

Personal Taxation
Employees are hopeful that the tax rate threshold increases along with other increases in tax, energy, and renter credits will go some way to offsetting the escalating costs of energy, childcare, housing and living.

This has been billed as a cost-of-living budget with measures to build economic resilience. Still, it feels like we’re landing into 2023 on a wing and a prayer.  Let’s all hope the measures announced today are enough to support the arts and culture sector and artists through and beyond this latest cost of living crisis.