Monday 18 December 2017

Seven key talking points ahead of Budget 2017

Ibec's key priorities for budget 2017 include managing acute Brexit pressures such as matching UK tax incentives
Ibec's key priorities for budget 2017 include managing acute Brexit pressures such as matching UK tax incentives
Cormac McQuinn

Cormac McQuinn

This weekend is crunch time for the remaining Budget talks.

Here’s seven key talking points ahead of Michael Noonan and Paschal Donohoe’s big announcement on Tuesday.

1.The fiscal space may have miraculously grown. Reports suggest there’ll be up to €200m extra to splash around. The minority Fine Gael-led government has agreed a 2:1 split between spending and tax measures with Fianna Fáil. If the amount of cash available is now €1.2bn, that means there’ll be €800m for new spending in health, education and other services and €400m for tax measures like cutting the Universal Social Charge (USC).

2.Just when will the expected pension increases – as well as a raft of social protection benefit increases sought by minister Leo Varadkar – kick in? It’ll cost €150m for a €5-a-week pension increase sought by Fianna Fáil. But Mr Varadkar is clear he wants more money for carers and families in poverty as well. There’s a suggestion that the increased payments won’t be introduced until the middle of next year to reduce the cost of each hike and allow for a broader cohort of people to benefit. Fianna Fáil have said they won’t tolerate a six-month delay in a pension increase. Expect this to be one of the key issues thrashed out in the coming days.

3.While older people look set to get a pension increase of some description, what’s in the Budget for young people? There looks certain to be a childcare subsidy scheme that will benefit low income families. An expected increase in teachers will help reduce class sizes. The funding of third level institutions has been a major issue lately and Fianna Fáil are pushing hard for some Budget measures in this regard. Young couples looking to buy their first home should get a boost from a promised help-to-buy scheme that could be worth up to €20,000. But will there be any houses to buy amid the current shortage?

4.Health minister Simon Harris seems happy with the extra cash he’s getting for health. He’s vowed that the health service will balance its books this year, and promises that the extra money he’s secured in negotiations will make a tangible difference for patients. Measures to tackle hospital waiting lists have been promised. We’ll see what’s delivered on Tuesday.

5.Watch the Independent ministers over the coming days, particularly those of the Independent Alliance. They are very keen to put their stamp on the Budget to show their supporters the decision to enter government has paid off. Children Minister Katherine Zappone is focused on her childcare plans while Alliance junior minister Finian McGrath wants increased support for people with disabilities. There are seven Independent ministers at junior and senior level and they’ll all have to be kept happy or there will be trouble ahead for Taoiseach Enda Kenny’s government.

6.Finance Minister Michael Noonan is an old hand at Budgets at this stage, but it’ll be Public Expenditure Minister Paschal Donohoe’s first outing. He arguably has the tougher job to do this weekend. Sure, he’s got most of the cash - as much as €800m – to dole out. But it’s to be split between several government departments as well as directed to areas that keep the Independents and Fianna Fáil onside. He’s got a big job in this government that could lead to a very bright future for the Dublin Central TD. The next 72-odd hours will be crucial to how well he’ll deliver on his first big test.

7.Most of the ‘old reliables’ – alcohol, petrol and diesel – seem safe from excise hikes this time around. But with as much as 30c to be slapped on a pack of cigarettes, there make be some stocking up and panic buying among smokers in the coming days. Perhaps it’d be a good weekend to decide to quit. 

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