Wednesday 13 December 2017

Paschal Donohoe has spoken - here is everything we know so far

  • Total government spend in 2018 will be €60.9bn, or €12,700 for every person in the country
  • Funding for homeless services will increase by €18m to over €116m
  • Stamp duty is to rise to 6pc with effect from midnight tonight
  • 1,300 extra teaching posts and 1,000 special needs assistants have been announced
  • Minimum wage to increase to €9.55 from January
Paschal Donohoe
Paschal Donohoe
Independent.ie Newsdesk

Independent.ie Newsdesk

Finance Minister Paschal Donohoe has delivered his Budget 2018 speech to the Dáil, announcing a number of measures including new funding to tackle the housing crisis and a two-tier sugar tax.

Taking to his feet shortly after 1pm in the Dáil Chamber Minister Donohoe told assembled TDs "Budget Day offers the opportunity to reflect on a journey made".

"This budget will safeguard our national finances and help to re-balance our economy," he said.

The Fine Gael Minister also gave a nod to Fianna Fáil for their contribution to the Budget, which complies with the Confidence and Supply agreement. This is the second budget of a promised three under the agreement.

Ahead of introducing the full Budget package Mr Donohoe referred to a falling unemployment rate as sign of a recovering economy, while adding that there is "much to be done".

"Balancing our books in 2018 will mean we can devote extra resources to tackling national needs in 2019," he said.

A rainy day fund is to be set up with €1.5bn from the existing Strategic Investment Fund.

The total government spend in 2018 will be €60.9bn, or €12,700 for every person in the country.

The Minister confirmed €4.3bn for new capital expenditure over next four years.

Revenue raising measures in today's Budget will total €830m, meaning the full budget package is €1.2bn.

Tax reductions on income will total €335m.

Housing

Minister Donohoe said housing is a priority for the Government as he outlined a number of measures to address the housing market. These include:

€750m to be made available for commercial investment in housing finance.

In a significant move stamp duty is to rise to 6pc with effect from midnight tonight. For land used for residential developments the Government is introducing a stamp duty refund scheme subject to certain condition.

The planned vacant site levy for 2019 will now be 7pc – not the 3pc previously announced.

“The message to vacant site owners… you need to get on with developing your lands urgently," Minister Donohoe said.

Funding for homeless services will increase by €18m to over €116m.

€1.83bn is also being made available for additional housing delivery in 2018 - 3,800 new social homes next year 2018.

Housing Assistance Payment funding is to be increased by €149m in 2018, allowing an additional 17,000 household to be supported next year.

Mortgage Interest Relief for boom-time buyers to be cut by 25pc in 2018.

Health

Health funding is to rise by just under 5pc, or €685m, bringing total funding to €15.3bn. This includes funding for 1,800 new frontline staff.

Cigarettes

The cost of a box of cigarettes will hit €12 for the first time, following a 50c increase.

Sugar Tax

30c per litre for drinks with more than 8g of sugar per 100ml and 20c per litre for drinks with 5-8g of sugar per 100ml. The tax will be introduced in April 2018, in line with the UK.

Sunbeds

Sunbed VAT is to increase to 23pc.

Education

In education, 1,300 extra teaching posts have been announced for 2018, which will reduce pupil-teacher ratio to 26:1. Extra funding has also been made available for 1,000  additional special needs assistants.

Meanwhile the levy paid by employers toward National Training Fund is to be raised by 0.1pc next year and again in 2019 and 2020.

Gardaí

An extra 800 Gardaí are to be hired along with 500 civilians. The total allocation for the Justice Department is €63m.

Business

A ‘Brexit Loan Scheme’ is to be set up with €300m for SMEs who need to innovate.

Tourism

There will be no change to the special 9pc VAT rate for the tourism sector. The minister noted “prices in Dublin continue to rise” but said policy cannot be dictated by just one place, no matter how big.

Irish language

Increase of €2.5m in the allocation for Irish language and the Gaeltacht in 2018.

Agriculture

Another €25m is to be set aside for Brexit response loan scheme for agrifood sector. Meanwhile, the Minister for Agriculture gets €50m for Brexit response measures in 2018.

Childcare

Childcare is to receive an extra €20m to support extension of free pre-school programme and other measures.

Motoring

On top of existing reliefs the Benefit In Kind tax on electric vehicles will be reduced to 0pc.

Carbon tax

A review of carbon tax is to be carried out with a view to making changes in next year’s budget.

Overseas development aid

Echoing Taoiseach Leo Varadkar's view that "Ireland is a country at the centre of the world", funding is to be increased for both the Department of Foreign Affairs and the Department of Defense.

There will be an increase of €13m for Overseas Development Aid.

Social welfare

There will be a €5 increases to social welfare payments including pension, dole and disability allowance from last week of March 2018.

Tax

The entry point for higher rate of tax is to increase by €750. Cuts to two rates of USC. In total the changes are worth around €250 a year to the average worker.

There will be a €200 increase in Earned Income Credit for self-employed, bringing it to €1,150 in 2018.

A working group is to be established to begin process of amalgamating USC and PRSI over “medium term”.

Minimum wage

The minimum wage to increase to €9.55 from January.

Home carer tax credit

Home carer tax credit up to €1200 to be made available. This applies to all stay at home parents.

More to follow...

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