Delivering Budget 2020, the Minister for Finance Paschal Donohoe, TD, said a no-deal Brexit will mean a slower pace of growth in Ireland.
“The Government is clear about the challenges posed by Brexit,” Minister Donohoe said.
The Minister said that while employment growth will slow, the economy can still expect an extra 19,000 new jobs to be created next year.
“The unfunded tax cut of today is the unwelcome tax increase of tomorrow”
Some €1.5bn is to be transferred from the Ireland Strategic Investment Fund into the Rainy Day Fund as the risk of a no-deal Brexit is increasingly likely. Originally €500m had been earmarked for transfer into the Rainy Day Fund but the boost in funding was considered more appropriate given the challenging economic environment Ireland is facing.
The Finance Minister has revealed a Brexit package of €1.2bn. In the event of a no-deal Brexit some €220m will be deployed immediately.
In the event of a no-deal Brexit €650m will be allocated for agriculture and tourism, €85m has been allocated for beef farmers, €14m will be allocated for the fishing industry, €6m will be allocated for the livestock and mushroom industry and €5m has been earmarked for the food and drinks industry. Some €365m will be provided for extra Social Protection expenditure while €45m has been earmarked to assist people to transition to new work.
Corporation tax rate of 12.5pc will not be changing. The Minister said that there was a 13.2pc increase in corporation tax receipts in 2019.
Capital Acquisitions Tax
The lifetime Group A tax-free threshold that applies to transfers between parents and children has been increased from €320,000 to €335,000.
Agriculture and rural economy
A €2bn in investment in rural Ireland farm restructuring relief has been extended to December 2022.
There has been an increase of €690m for the Department of Employment Affairs and Social Protection in 2020. There will be a Christmas bonus for all social welfare recipients in 2019.
The Living Alone Allowance has been increased by €5, there has been a €15 increase for the One Parent Family Payment and Jobseeker Transition income and a €10 increase for the Working Family Payment income threshold.
Carbon tax and transport
There will be a €6 increase in the price of carbon which the Minister said is a first step towards the Government’s commitment to increase the price of carbon from €20 to €80 per ton.
From midnight (9 October) there will be an increase of €6 per ton in petrol and diesel.
The Minister said that an oxide charge will replace 1pc diesel surcharge
€20m will be allocated for a new energy efficiency scheme that will be targeted initially at social housing stock with the aim of creating sustainable new jobs in the process.
The Finance Minister is allocating €5m for peatland rehabilition – a 250pc increase – to support the reduction of greenhouse gas emissions and help to enhance biodiversity.
R&D tax will be increased from 25pc to 30pc for micro and small companies.
The Minister announced up to €600m supports for businesses.
Some €40m of funding will be provided for tourism
The Minister announced a €1bn increase in health spending to €17.4bn.
Children under eight will receive free GP care while children under six will receive free dental care.
Prescription charges for all people will be cut by 50pc.
Some 56,000 extra medical cards will be allocated for people over 70 while there will be a €100 increase in home carers’ credits, bringing the value of the credit to €1,600.
Housing and homelessness
The Government is allocating capital funding of over €1.1bn to cover 1,000 new social homes next year with 12,000 additional units planned for 2020.
To tackle homelessness, €20m is being allocated to bring total funding to €166m next year.
“Turning to our taxation system, I will not commit to across-the-board personal tax cuts at this time of economic uncertainty as to do so could potentially undermine the sustainability of our public finances,” Donohoe said.
“The unfunded tax cut of today is the unwelcome tax increase of tomorrow.”
Main image: Pascal Donohoe, TD, Minister for Finance
Written by John Kennedy (firstname.lastname@example.org)
Published: 8 October, 2019