Sunday 4 December 2016

Budget 2017 update: Here is everything we know so far

Published 06/10/2016 | 23:14

Ibec's key priorities for budget 2017 include managing acute Brexit pressures such as matching UK tax incentives
Ibec's key priorities for budget 2017 include managing acute Brexit pressures such as matching UK tax incentives

With the budget for 2017 to be announced next week, here's everything we know so far.

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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 €5-a-week - this will be paid in March
  • Ministers and TDs will get wage hikes of up to €5,000 next year*
  • 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 worth up to €20,000 and apply to purchases of new-build homes.
  • A childcare subsidy for lower income families 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.
  • Funding has also been agreed for 1,000 new nurses, 800 gardaí and 650 teachers
  • 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.
  • The extension of the home renovation scheme

There is around €330m for new tax measures.

They are expected to include:

  • A 0.5pc cut to the three lower rates of Universal Social Charge which will see the 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.
  • Cigarettes will go up by at least 30 cents
  • No hikes to petrol, diesel or alcohol
  • Dirt tax reduced for savers
  • No allowance for possibility that water charges might not be reintroduced once the current suspension period ends in May

*The pay rise for politicians is not part of the Budget as it has already been signed off on as part of the Lansdowne Road Agreement

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