Budget 2009
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The details of Finance Minister Brian Lenihan’s much-awaited Supplementary Budget speech.
The Minister, who began his speech to the Dáil at 3.45pm, will be hoping that the €3.5bn plan will go some way towards curbing the expanding deficit in the exchequer.
The Minister said:
*Government must 'lead by example' and said there would be a 10pc reduction in non-mileage expenses for TDs and the axing of long service payments or increments for TDs.
* There will be no pensions paid to sitting TDs and no support for former teachers who put their careers on hold to serve in the Dáil.
* Allowances to chairpersons of Oireachtas committees to be halved
* There will be a major review of pay in the public sector.
The Minister also outlined his 'six point plan' for economic recovery and said we must:
1. Stabilise the public finances
2. Restore our damaged banking system because 'credit is the lifeblood of our economy'
3. Repair our lost competitiveness because our future lies in exports
4. Protect the jobs we have
5. Support and stimulate economic confidence
6. Restore our reputation abroad which was also damaged by our 'rejection of the Lisbon Treaty'
The other main points of the Budget are:
Income levy rates to change:
*The income levy rates will be doubled to 2%, 4% and 6%.
*The exemption threshold will be €15,028. The 4% rate will apply to income in excess of €75,036 and the 6% rate to income in excess of €174,980.
Health Levy – from 1 May:
* The health levy rates will double to 4% and 5%.
The entry point to the higher rate will be €75,036.
PRSI – from 1 May:
The PRSI ceiling will be increased from €52,000 to €75,036.
*Regarding Social Welfare payments:
*No Christmas bonus this year
*Jobseeker's Allowance down to €100 for under 20s
* The Rent Supplement scheme to be reduced
Central Bank's role:
* to be reformed
* headed by Commission, chaired by governor
New Asset Management Agency:
* to take up bad debts of Irish banks
(The potential maximum book value of loans that will be transferred to the Agency is estimated to be €80-€90bn, although the amount paid by the Agency will be significantly less than this to reflect the loss in value of the properties.)
Regarding Child Benefit:
* To be taxed or means-tested from next year
* Introduction of a free pre-school year
* Childcare supplement to be halved from May
* Abolished next year
*The Minister also announced extra resources to aid a clampdown on child benefit fraud by non-residents
Mortgage Interest Relief
* On 75pc of interest paid
* For first 7 years of mortgage only, on principal residence
* will be 'eventually abolished'
Extra excise duty on
* Cigarettes - up 25c on packet of 20
* Diesel up 5c a litre
(But no change to alcohol and petrol prices)
Capital Gains Tax:
* Increased to 25pc
Capital Acquisitions Tax:
* Increased to 25pc
DIRT tax:
Increased to 25pc (and 28pc on other products)
Life Assurance Policies:
* New 1pc levy
Non-Life Insurance Policies:
The current non-life insurance levy of 2% is being increased by 1%.
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