Wednesday 16 October 2019

Philip Ryan: 'Living in the shadow of Brexit blamed as taxpayers, older people and renters lose out in Budget 2020'

Minister for Finance Paschal Donohoe TD with Budget 2020 at Government Buildings, Dublin
Photo: Gareth Chaney/Collins
Minister for Finance Paschal Donohoe TD with Budget 2020 at Government Buildings, Dublin Photo: Gareth Chaney/Collins
Philip Ryan

Philip Ryan

THE key message from Finance Minister Paschal Donohoe’s Budget speech was we are all living in the “shadow of Brexit” but the Government “stands ready” to tackle the challenges posed by the UK’s decision to leave the European Union.

Unfortunately this means there was little or no good news in the minister’s budget plans for hard-pressed taxpayers, social welfare dependent older people or those struggling to pay extortionate rents.

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With 20 days to the latest Brexit deadline, Mr Donohoe outlined a €1.2bn bailout package for sectors which will be worst affected if the UK crashes out of the EU later this month. 

The Government hopes it will not have to access this funding, most of which is borrowed, but with the outcome of Brexit becoming more perilous with each passing day they believe they have no choice but to prepare for the worst.

He was sparse on detail but the minister said €650m will be made available to the agriculture, enterprise and tourism sectors in the event of a no-deal Brexit with €200m dished out almost immediately.

He said the deployment of €390m would be “determined closer to the time” but you would hope he has some idea about how he intends to spend nearly half a billion of our money.

Even more worryingly, €365m is being set aside to deal with an increase in unemployment resulting from a disorderly Brexit.

Brexit fear mongering aside, Mr Donohoe did say the economy is in good shape.

Tax revenue is up 8.7pc to €40.7bn, unemployment stands at 5.3pc and the economy, all going well, is forecast to grow by 0.7pc next year.

At this point of the minister’s speech, Kerry TD Michael Healy Rae shouted across the Dail chamber that not all parts of the country are feeling the benefits of the improved economy.

His brother Danny was similarly exercised when Mr Donohoe announced plans to increase carbon taxes by €6 per tonne which means the cost of petrol and diesel goes up tonight and the hike will apply to other fuels such as home heating oil in May.

The minister said he knew this measure would “not be easy for everyone” but insisted “bold and new decisions” are needed to tackle climate change.

The money he raises will be ring-fenced for climate action measures with a specific fund for people living in the midlands who the Government seems to think will be more impacted by the tax than those living in other areas of rural Ireland. 

Other environmental policy changes will see more taxes on diesel cars coupled with incentives to purchase electric vehicles. There are some small increases to fuel allowances for the elderly.

Business owners are also being hit with higher electricity costs.  However, there were some sweeteners for the self-employed and business owners through tax credits and investment schemes.

There were no tax cuts for anyone else and the minister blamed the “economic uncertainty” of Brexit for his decision.

“It is important to avoid a situation in which decision made this year might be reversed tin the future,” Mr Donohoe said. 

First-time buyers will be happy to hear the Government decided to retain the Help-to-Buy scheme but those trying to save for a mortgage while paying extortionate rents will rightly feel aggrieved.

All the minister announced for renters was a couple of million for Residential Tenancies Board which means little to people forking out thousands of euros a year to live in cramped apartments.

Mr Donohoe did say he planned to target the so called international cuckoo funds who have bought up apartment blocks in the capital and rented them at inflated rates while paying very little tax.

The minister was light on detail but said he planned to ensure these companies will pay the “appropriate level of tax”.

Social welfare payments were tapered to focus on increases in the living alone allowance and measures aimed at children living in poverty. Pensioners, disabled people and unemployed will see no increases in their weekly payments.

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