Saturday 10 December 2016

The Budget: Here is what we know so far

Published 29/09/2016 | 02:30

Finance minister Michael Noonan and Paschal Donohoe, the minister for Public Expenditure. Pic Tom Burke
Finance minister Michael Noonan and Paschal Donohoe, the minister for Public Expenditure. Pic Tom Burke

Budget 2017 will be delivered by ministers Michael Noonan and Paschal Donohoe on October 11. Both have warned that there are limited resources and have sought to reign in the expectations of ministers and the public.

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There is expected to be 'fiscal space' of approximately €1bn for new measures.

The Government agreed a 2:1 split for spending and tax measures with Fianna Fáil.

Around €670m is set to be allocated for new spending measures.

They are expected to include:

  • A rise in the State pension by as much as €5 a week.
  • Hikes in the fuel allowance and the living alone allowance.
  • A 'Help-to-Buy' scheme for first-time-buyers that would take the form of a tax rebate. €10,000 is being mentioned as the sum and it would apply to purchases of new-build homes.
  • A childcare subsidy to be paid directly to creches. Details of whether it will be allocated by income or age of child are still under negotiation.
  • The extension of Social Protection benefits to the self-employed.
  • €50m to tackle hospital waiting lists, including €15m ring-fenced for a National Treatment Purchase Fund.
  • Funds for the recruitment of 650 nurses.
  • A cut in the €2.50 prescription charge.
  • The funding of 800 new gardaí.
  • A 'rainy day' fund for farmers.
  • An overhaul of how the 'Fair Deal' nursing home scheme applies to the assessment of farmers' assets to cut their bills.
  • Funds to retro-fit homes for energy efficiency.
  • Some movement on increasing funding for third-level education, a key demand of Fianna Fáil.

There is around €330m for new tax measures.

They are expected to include:

  • A 0.5pc cut to the two lower rates of Universal Social Charge, which will see them go down to 2.5pc and 0.5pc respectively.
  • A rise in the inheritance tax exemption by €40,000 to €320,000.
  • A 5pc increase in tax relief for landlords
  • A capital gains tax reduction for start-up companies to 10pc on earnings up to €10m as part of Brexit-proofing measures.
  • Doubling the €550 income tax credit for the self-employed.
  • A hike in excise on cigarettes and diesel.

Irish Independent

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