Sunday 24 June 2018

Colm McCarthy: Shadow of Brexit clouds view of Budget priorities

The minister has resisted pressure to slow down the economy as expansion continues but questions remain over its long-term stability, writes Colm McCarthy

Choices: Minister of Finance Paschal Donohoe avoided a listing of planned capital projects in his address. Photo: Collins Dublin, Gareth Chaney
Choices: Minister of Finance Paschal Donohoe avoided a listing of planned capital projects in his address. Photo: Collins Dublin, Gareth Chaney
Colm McCarthy

Colm McCarthy

The fifth straight year of economic expansion, and with labour market conditions already tightening, there was no case for an expansionary budget and every reason to target a modest surplus in 2018.

The Government has chosen to resist the temptations of prudence for another while, ignoring advice to slow things down a little. Government expenditure will increase faster than last year and the figures have been made to add up through an unexpected (which means leaked only late in the day) hike in the stamp duty on commercial property.

There is hidden new revenue from the expected increase in personal incomes - unless allowances and tax bands are improved, rising pay rates are the taxman's friend.

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