THE BUILD-UP TO Budget 2015 next week has been slightly different to previous years with the political world having been obsessed with ‘McNulty-gate’ for the past fortnight.
That means there has been very little talk about what ministers Michael Noonan and Brendan Howlin will be announcing in the Dáil on Tuesday week.
But with just over seven days to go the speculation and the debate is now set to intensify as the government looks to give something back to hard-pressed taxpayers who have known nothing but austerity and extra charges over the past few years.
Here’s a round-up of what we know so far…
1. Austerity is over
Don’t expect to hear these words coming out of the mouths of anyone in government, but for the first time in six years, the government will not have to think about taking money out of the economy. A ‘broadly neutral’ Budget is now expected to be delivered by Michael Noonan next week.
2. Which means some extra spending
Public Expenditure and Reform minister Brendan Howlin has told Cabinet colleagues that we can afford around €600 million in extra spending next year due to better than expected exchequer returns. But ministers are pushing for more having been starved of extra resources for several years.
3. Health will again come under scrutiny
New minister, but the same old problems in the Department of Health with budget overruns again a feature of the debate this year. Leo Varadkar is said to be looking for an extra €500 million for next year to bring his spending into line with what it is expected to be this year when you include the overrun. But don’t expect him to get it all his own way.
4. A plan for the next three years
The coalition is expected to unveil not just its budget plans for next year but for the next three years in much the same way that Fianna Fáil laid out the four-year plan in 2010.
5. A tax cut of some sort is on the way
This is well-flagged with ministers dropping hints about easing the burden on ‘Middle Ireland’ for months now. Just how it is done is not yet clear. Taoiseach Enda Kenny is thought to favour a simple cut in the higher rate of income tax while Finance Minister Michael Noonan wants to adjust the bands and deal directly with the issue of people paying 41 per cent tax on earnings over €32,800.
What’s most likely to be announced is a suite of measures involving changes to income tax, PRSI, and the USC. Leo Varadkar speculated last month that this could mean ‘an extra fiver or tenner’ in your pocket every week but his ‘slapping down’ has meant we’ve not heard anything more on that.
6. Something will be done to increase housing supply
The Irish Independent this morning carries a pretty substantial story on measures the government plans to introduce to get the construction industry moving again. The dire need for housing will see builders get a tax cut for starting work on a site within 18 months of getting planning permission, the paper reports.
A vacant site tax will be introduced – a measure already flagged last week – and landowners who sell sites for housing will avoid large tax bills. There will also be more funding set aside to build social housing.
7. The leaks really begin now
It was all about a man called McNulty for the past two weeks but with just over a week to go, expect the leaking to become as intense as the negotiations between Finance officials and various government departments but nothing will be confirmed until Michael Noonan stands up in the Dáil on the afternoon of Tuesday, 14 October.
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