Row over number of renters holds up new tax relief plans as Budget to be unveiled on Tuesday
The Government will unveil an unprecedented €14 billion Budget package on Tuesday — but ministers were last night scrambling to agree business energy supports, relief for renters, cuts to childcare costs and welfare increases.
The Sunday Independent can reveal that significant problems have emerged with a new business energy support scheme (BESS) and a row between the Departments of Finance and Housing over how many people are renting is holding up plans for new tax relief.
The Budget will include €3bn in one-off cost of living measures that will be paid out to households within weeks, along with €6.7bn in tax cuts and spending increases next year, and €4.5bn held in reserve for Covid, Brexit and Ukraine contingencies, but many items are still not agreed.
There are “a lot of holes” in the current proposal for BESS, a Revenue-administered scheme to help retail, hospitality, manufacturing and other high energy users with their bills this winter, a senior Government source said. “Revenue know everyone’s turnover but Revenue don’t know people’s energy bills,” another source explained.
Meanwhile, the Department of Finance claims the Department of Housing is only counting between 50pc and two-thirds of the number of renters in the current market. However, agreement is close on increasing the current €5,000 limit on the amount of tax relief landlords can claim on pre-letting expenses to try to keep them in the market.
Ministers will raise the threshold for the 40pc income tax band by €2,500, with workers saving hundreds of euro a year on average, but there are unlikely to be changes to the USC other than amendments to take account of the increase in the minimum wage. A 50 cent increase in the cost of cigarettes is likely to be announced, but there will be no increases in excise on alcohol.
Health Minister Stephen Donnelly is set to unveil an eye-catching expansion of free GP care to 400,000 more children next year which would mean nearly half the population would now qualify, and announce the abolition of hospital charges. Mr Donnelly will pitch the moves as a significant step on the road to implementing the Sláintecare reforms. However, a Coalition source insisted last night the healthcare budget was still not agreed.
Meanwhile, concerns that plans to cut creche costs by at least 25pc could increase the number of parents looking to access subsidies under the National Childcare Scheme have prolonged discussions on a childcare funding.
On welfare, Fine Gael is pushing for a “cost of living family payment” that could be more than the value of a double child benefit payment and paid in one lump sum in November or two instalments this winter.
Higher Education Minister Simon Harris is said to have secured a €500 cut in student registration fees to apply retrospectively this year. But multiple sources said all final figures were subject to agreement by the three Coalition leaders, who will meet today.