Budget 2023 has passed without any major changes for Irish drivers and the Irish car industry. The only significant change made was an increase in Carbon Tax, which would have driven up the price at the pump of unleaded and diesel, but which was nullified by a reduction in the National Oil Reserves Agency levy. The amount would only have been 2c per litre in any case, driven by the increase in Carbon Tax from €41 to €48.50 - hardly a serious imposition given the levels of recent price hikes.
Excise duty cuts extended
The recent cuts in excise duty on petrol and diesel will be extended, but only until February of next year (2023), which puts something of a ticking clock on fuel prices unless an end to the war in Ukraine can be found by then, not to mention increases in oil production from the major OPEC producers.
In policing terms, funding for an additional 1,000 Garda officers has been introduced, which will hopefully have an impact on the visibility of traffic units, and hopefully a reduction in the reliance on mobile camera vans.
A €375 million allocation has been made for 'energy efficiency' but what that might mean for sustainable electricity production, or the introduction of further electric car charging points, remains to be seen.
Continued cut in public transport prices
In public transport, Minister for Finance Paschal Donohoe announced that the recently-introduced 20 per cent reduction in prices will be extended through to the end of 2023.
Before the Budget, the Society of the Irish Motor Industry had called for purchase supports for electric vehicles to remain in place unchanged, and that appears to be the case for now - although it's worth pointing out that EV subsidies are not something that needs to wait for an annual Budget statement if they're going to be changed. Reductions and changes to EV grants are on the way, they just haven't formed part of this Budget.
Fuel costs remain high
Speaking on behalf of the AA, Paddy Comyn said that the organisation welcomed the extension of excise duty relief on fuel. "There wasn't much in the Budget for motorists specifically - the big question was whether or not there would be relief on petrol or diesel, well there was and there wasn't in equal measures because while there was a reduction of the NORA (National Oil Reserves Agency) Levy on fuel, which amount to two cents, this was wiped out by an increase in Carbon Tax by the same amount.
"However, there was a welcome extension of the excise relief on petrol (21 cents) and diesel (16 cents) until the 28th of February 2023. So while there are no increases, the average motorist is still paying around €2,000 per year now to fuel their car. The AA welcomes the extension of the reduction in public transport fares (of 20 per cent) until the end of 2023, which will encourage more use of public transport, but there still remains too much variance in the quality of public transport services between urban and rural areas."
Tough winter ahead
John Manning, head of Ford in Ireland, also responded to the Budget, saying: "In the context of the cost of living crisis, it is welcome that the Minister did not increase taxes on petrol or diesel; however, motorists will be dreading February 2023 when the reductions in excise rates that were put in place last March - 20 cent per litre of petrol and 15 cent per litre of diesel - will cease. We would kindly request that the Minister keeps under review the decision to remove the fuel excise duty supports until we see how we as a country get through what will be economically, the toughest winter for decades. In relation to electric vehicles, we were disappointed that the Minister did not include any improved incentives aimed at encouraging the move to electric or partial-electric vehicles. Last year's abolition of the grant for buyers of plug-in hybrid electric vehicles (PHEVs) was a retrograde step as experience has shown that many motorists often first opt for such a hybrid option before choosing a full electric vehicle.
"Another measure that would have really helped to allow many more drivers make the decision to go electric would have been to look at reducing the threshold in the purchase price of EVs in order to qualify for an SEAI grant. Currently, if the cost to the customer for a new EV (including all optional extras, paint and delivery costs) exceeds €60,000, then the customer does not benefit from an SEAI grant. That threshold of €60,000 was established at a time when very few EVs were available and when an even smaller number cost more than €60,000. However, as EVs have become more mainstream with all of the latest safety and driver assistance technologies, many of the latest EV models, when you take into account all of those cutting-edge technology options that are available, exceed that price threshold, thus meaning the customer cannot benefit from the SEAI grant. The move to electric motoring is a key part of the Government's own Climate Action Plan and increasing the threshold for the SEAI grant is one clear way in which motorists could be encouraged to take the electric option."