Noonan tells of plans to phase out USC over five years in first public appearance since hospitalisation
* Finance Minister Indicated that he doesn't intend to increase VAT rate on hotel rooms * Said he doesn't think scrapping VAT on condoms would lower rate of STI transmission
Published 20/09/2016 | 12:15
Finance Minister Michael Noonan has told an Oireachtas Committee he had "no expectation that taxpayers will be throwing their hats in the air on Budget night."
Mr Noonan is this morning being quizzed by TDs at the Budget Oversight committee.
It's his first public appearance since his brief hospitalisation last week for cellulitis. The effects of the painful skin condition are clearly visible on his face.
Fine Gael TD and committee member Kate O'Connell said she was glad to see him well.
Mr Noonan warned that there was "a lot of things that are desirable that are not affordable" in next month's Budget.
Fine Gael and Fianna Fáil agreed that there will be cuts to USC for low and middle income workers during Budget negotiations.
Mr Noonan told the committee: "It will not be possible to phase out USC completely over a three-budget cycle, but it would be possible to phase it out over a five-budget cycle."
Ms O'Connell asked if Mr Noonan would consider reducing the VAT rate on condoms to 0pc.
Michael Noonan says he doesn't think scrapping VAT on condoms would lower the rate of transmission of STIs. There you go now— Gavan Reilly (@gavreilly) September 20, 2016
Mr Noonan said he didn't think lowering the VAT rate would change behaviour or help in the reduction of sexually transmitted diseases.
Mr Noonan was asked about his plans for the 9pc VAT rate that applies to the hospitality sector. It was reduced from 13.5pc during the economic crisis to help boost the industry.
He noted that hotel prices have been rising, particularly when special events are taking place.
However, he indicated that he does not planto return the VAT rate to 13.5pc saying: "you get vengeance, but it doesn't reduce costs".
Sinn Féin's Pearse Doherty spoke about the government's plans to introduce a Help-to-Buy scheme for first-time homebuyers. He raised concerns that this will increase house prices.
Mr Noonan responded: "It's an open secret that we're working on proposals to help couple buy homes" but added that the details will be released on Budget Day.
Mr Doherty said there's 250,000 people that plan to buy a home in the next three years and again asked the impact of a Help-to-Buy scheme on prices.
Mr Noonan replied: "You're pre-empting the Budget debate. I'm not prepared to debate the Budget here."
Green party leader Eamon Ryan said he thought the point of the committee is to debate the Budget.
Meanwhile, Mr Noonan ruled out an inheritance tax bonanza.
There has been speculation a new threshold of inheritance tax that would apply only to family homes could be as high as €500,000.
Mr Noonan said it was the Government's intention to eventually raise the threshold to €500,000, but it would not be done "all in one leap".
He said it was more likely to be "done gradually" over the course of a few budgets.
"It is not going to happen in one Budget, but I would like to do something on it," he said.
Mr Noonan announced that the budget would take place on October 11.