Monday 18 November 2019

Budget 2019: From parents struggling with childcare costs to stunned environmentalists - winners and losers revealed

Green Party leader, Eamon Ryan
Green Party leader, Eamon Ryan
Cormac McQuinn

Cormac McQuinn

THERE are always winners and losers in the Budget.

This time around the prizes for ‘winners’ are modest.

But there are tax cuts for low and middle income workers getting tax cuts, older people will receive increased pension payments, and there's increase childcare supports for some parents as a result of finance minister Paschal Donohoe’s Budget 2019.

And that's better than the wooden spoon on offer for the losers – namely environmentalists and the tourism industry.

But there's more votes among workers and pensioners than there is in tackling climate change and there could be an election on the horizon.

Mr Donohoe said the he has delivered a “caring Budget” that recognises the real social issues faced by citizens and provides funding to address them.

There’s €2.3bn for the housing programme, up €470m over last year’s allocation in a bid to ease the housing and homelessness crisis.

The health service’s Budget next year will be a record €17bn including bringing more families into the GP visit card scheme and an additional €84m to fund mental health services.

Low income and squeezed middle workers will see modest cuts in Universal Social Charge and income tax due to an increase in the entry point to the higher tax rate.

A married couple with one income of €55,000 and two children will be better off to the tune of €11-a-week.

Older people will see a €5-a-week increase in the State pension from March and social welfare recipients will also see a €5 weekly hike in benefits.

And around 16,000 more children will be brought into the targeted childcare scheme which offers increased subsidies depending on their circumstances with the help of almost €90m in increased funding.

But Mr Donohoe is already facing a backlash from the so-called ‘losers’.

A day after dire climate change warnings from international scientists, carbon tax has not been increased.

Mr Donohoe said in his speech it’s his intention to do this in the future and argued that spending commitments in the National Development plan will provide a significant reduction in carbon emissions up to 2030.

Green Party leader Eamon Ryan was quick to interrupt him, saying: “no it won’t” and adding “shame on Fine Gael”.

Meanwhile, in order to raise €466m, the VAT rate on hotels and restaurants is being increased from the reduced rate of 9pc, back to 13.5pc.

There have already been warnings that restaurants will close and hotels in rural areas will be hardest hit by the measure.

And the tourism sector are unlikely to be placated by the extra €35m in targeted supports Mr Donohoe announced as a result of the challenges the VAT rate increase will represent.

There has been much speculation that this would be an ‘election Budget’ due to the threat of going to the polls if the Confidence and Supply deal between Fine Gael and Fianna Fáil is not renewed.

The winners from today’s budget – workers, older people and parents – are voters.

Despite the challenge presented to everyone by climate change – it’s not generally viewed as high on most voters’ priorities.

And while voters may have sympathy for small businesses like restaurants, there won’t be many tears shed for big hotels charging high room rates.

If an election is in the offing in the coming months – expect the government to be highlighting all they’ve done for the winners in Budget 2019 as politicians take to the campaign trail.


Low and middle income workers

Income tax cut int he form of increasing the entry point to the higher rate of income tax for all earners by €750 to €35,300 for a single worker.

Cut in third rate of Universal Social Charge (USC) from 4.75pc to 4.5pc.

A 25c an hour increase in minimum wage to €9.80.

Older people

A €5-a-week increase in State pension from March.

A 50c reduction in prescription charges from €2 to €1.50.


More parents will qualify for targeted childcare subsidies of between €50 and €145-a-week.

€25 increase in Back to School and Footwear Allowance rates.

An extra two weeks of paid parental leave from November 2019


Environmental lobby

Plans to increase carbon tax as part of the fight against climate change have been parked until future Budgets.

Tourism industry

Industry groups have complained about a 50pc VAT hike for hotels and restaurants that's to generate €466m for the exchequer next year.

Online Editors

Also in Business