Belfast Telegraph

Tax-and-spend measures worth 1bn euro to be revealed in budget

Ireland's minority Government will unveil a budget tomorrow with tax and spending measures worth about a billion euro.

Following last-minute talks with the king-makers on opposition benches, all eyes will be on modest cuts to income tax, initiatives to ease the country's unprecedented housing and homelessness crisis and modest welfare rises.

Finance Minister Paschal Donohoe's first budget in the Fine Gael Government is a delicate balancing act as he is reliant on the support of Fianna Fail to get it through.

It is the second year in the Republic's history that those in power will have negotiated with their traditional political rivals, leaving few surprises to announce on the day.

And much like last year, the critics on the opposition benches will be watching closely to see how well the Government has thought to Brexit-proof Ireland's economy.

Among the flagged reforms are an easing of the tax burden on average working families.

The so-called squeezed middle will be closely counting cuts to income tax and the deeply unpopular Universal Social Charge, which hits the pay packets of all but the lowest earners.

There are some suggestions that a modest payback - up to 0.5% on the two middle bands of the rate - could return about 250 euro to annual salaries.

Income tax bands are also being tweaked with workers set to pay the top rate of tax on wages above 34,500 euro, compared to 33,800 euro as it is now.

Older people should also enjoy some improvements. Five euro is due to go on the old age pension, and a bereavement grant, which helped covered the cost of a funeral until it was abolished a few years ago, is also expected to return.

Prescription charges are likely to be cut and dole and other welfare benefits are likely to see a Christmas bonus this year.

There will also be a package of measures to improve the lives of carers and people with disabilities to ensure Ireland lives up to commitments under a UN rights charter.

A huge chunk of the money available to Mr Donohoe will come from hikes in stamp duty on commercial property deals.

It is currently at 2% and every percentage increase is set to yield about 100 million euro.

Tax incentives for corporations to lodge intellectual property rights in Ireland will be reduced to bring in about 150 million euro.

A sugar tax is also on the menu.

It will target sweetened drinks specifically and is forecast to make up to 40 million euro, and it will be timed to coincide with the UK's levy.

A question mark remained at the eleventh hour on whether a reformed betting tax was over the line and whether the funds raised could be ring-fenced.

Land owners who hoard development sites as they wait for prices to climb can also expect to be penalised under a new and long-awaited tax.

It is due to be included in a package to alleviate the housing and homelessness crisis.

More than 8,000 people have been forced to live in emergency accommodation such as hotels and B&Bs after losing their homes, while social housing waiting lists have soared to about 90,000 families.

The old reliables rarely get away untouched.

Smokers can expect to be hurt in the pocket again, with Ireland second only to Norway for the dearest tobacco in Europe.

Alcohol went untouched last year and there is little to suggest it will be treated any differently this year.

Other duty and taxes on everyday life will also be closely watched, including changes to excise on diesel and home heating fuel.

But the green lobby will also be looking on to see if this minister goes further than predecessors by trying to encourage micro-generation and waste reduction levies.

Mr Donohoe will deliver his Budget in the Dail at lunchtime, and in doing so he becomes the first minister since the worst years of Ireland's recession to get the limelight all to himself.


From Belfast Telegraph