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Dublin: 10 °C Monday 17 June, 2019
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Source: TheJournal.ie/YouTube

SO THAT WAS Budget 2018.

Minister for Finance Paschal Donohoe this afternoon made his first solo budget speech.

Among the measures announced were:

  • A €5 across-the-board increase to weekly social welfare payments
  • Reductions to the USC and an increase to the secondary tax band for middle-income earners
  • An additional 3,000 new social housing units to be built by 2021
  • The establishment of a €1.5 billion Rainy Day Fund
  • An increase of €645 million to the health budget, bringing it to €15.3 billion
  • The long-awaited Sugar Tax made its debut
  • 1,300 new teaching roles to be created in 2018
  • 800 more gardaí to be recruited
  • The establishment of a Brexit Loan Scheme to help SMEs deal with Britain exiting the EU

Here’s how it all went down:

Good morning, and welcome to our Budget 2018 liveblog. It’s Christine Bohan here covering the run-up to this afternoon’s announcement.

It’s a bright, sunny day here in Dublin as the countdown is on to the big announcement. We can expect Paschal Donohoe to get to his feet at 1pm in the Dáil chamber, with the speech to last at least an hour (but possibly more – this is the first time in almost a decade that the speech has been given by just one minister rather than being broken up into two speeches).

After that, Fianna Fáil TDs will respond to the speech between 2pm and 3pm, followed by opposition parties from 3pm until around 8pm tonight. In other words: long day ahead for Budget wonks.

The main things to expect in the Budget

It’s been an unusually subdued run-up to this Budget, with both Leo Varadkar and Paschal Donohoe ramping down expectations of any major changes. As my colleague Killian Woods wrote over on Fora.ie:

After several years of bad-news budgets, followed by a few better-news budgets, 2018 could be the first ‘no-news budget’ for some time.

Here’s what we know already:

  • There’s unlikely to be any change in the tax rates, but there probably will be a change in the tax bands, in a bid to help low and middle-income earners
  • USC will be cut from 5% to 4.5% for people earning up to €70,000
  •  The minimum wage is expected to increase by 30c per hour
  • The State pension will rise, probably by €5 per week.
  • The price of a packet of cigarettes will rise by 50c but the cost of alcohol will not change, nor will the price of diesel or petrol
  • A package of measures is expected to be announced to help tackle the housing crisis
  • The sugar tax is likely to be back on the agenda today after being postponed by former minister Michael Noonan last year
  • Stamp duty may be increased on commercial property

'No fireworks' - The Taoiseach is ramping down expectations for the Budget

If you’ve heard any Fine Gael minister talking about the Budget at all over the past week, you’ll probably have heard them promising a quiet Budget with no surprises – and Taoiseach Leo Varadkar is no exception.

Speaking this morning outside Government Buildings, the Taoiseach was giving few details away but promised there would be “further investments in health and education – more teachers, more nurses, more gardaí” along with a “very significant increase on spending on infrastructure – with big increases for housing and transport in particular.”

He described it as a “good Budget overall” albeit one with “no fireworks, no big bonanza.”

“There’s also a tax and welfare package which puts more money back in the pockets of taxpayers, working people,  families, pensioners, people on welfare as well as measures to reduce the cost of living – particularly in relation to childcare and prescription medicines, he said.

Some good news for families: the “average family with two incomes” will be getting an extra €500-€600 per year, according to the Taoiseach. “It is modest but it is real,” he said.

Ok, that’s the main points covered. Now to the crucial issues: what colour tie will Paschal Donohoe wear to deliver the speech?

At a briefing with reporters this morning, the Minister for Finance didn’t wear a tie (just to ramp up the anticipation?).

Place your bets now for what colour you think it’ll be. The winners get the glory of knowing they correctly anticipated Paschal Donohoe’s sartorial choices.

 

What colour tie will Paschal Donohoe wear?


Poll Results:

Blue (150)
Green (105)
A pattern/mixture (81)
Something else (64)
Red (43)





UPDATE 454_90522478 Source: Sam Boal/RollingNews.ie

Speaking of Leo and Paschal…  TheJournal.ie will be hosting a special one-off Facebook Live with the Taoiseach and the Minister for Finance at 8pm on Wednesday night. 

We’ll be putting your concerns and observations about the Budget to them, and digging into the thinking behind the decisions made for the country and what it means for our collective future.

You can watch it live on our Facebook page from 8pm tomorrow night and submit your questions either here on the site from this evening or else directly on Facebook once the broadcast starts.

How are things in Leinster House right now? Our political reporter Christina Finn says TDs and ministers have started to roam around the corridors in the past few minutes. Fine Gael politicians are upbeat – Education Minister Richard Bruton says he’s “all set” and seems pretty happy.

Out of all the quirky little stories that emerge on Budget Day, the Examiner has got one of the best ones so far.

Political editor Daniel McConnell reports that Minister for Public Expenditure Paschal Donohoe will have to write a letter to Minister for Finance Paschal Donohoe in order to get clearance to increase the spending ceiling for his department.

McConnell writes: “Because they remain two departments and technically he is minister for both, under existing rule, the minister for public expenditure must write to the finance minister to approve increases in spending ceilings for departments, as required under legislation.”

giphy (3)

Previous years have seen a heavy garda presence outside Dáil Éireann during and after the Budget speech with large numbers of protesters converging, particularly during the worst years of recession and austerity.

This year, however? Not so much. At least, not yet.

Pat Leahy Source: PatLeahyIT via Twitter

Hello everyone, Cianan Brennan here, I’ll be manning the liveblog for the next couple of hours as political power duo Minister for Finance Paschal Donohoe and Minister for Public Expenditure Paschal Donohoe lead us through our Budget 2018 paces.

We all think we know almost everything there is to know about this year’s no frills entry in advance – but surely there’ll be a surprise or two in store?

Time to shine Paschal.

corportaion tax 920_90522992 Source: Sam Boal/Rollingnews.ie

Immediately after the two Paschals are done outlining the tax and expenditure movements we can expect in 2018, the whole shebang will go live on the government’s own Budget site.

You can check that out here as soon as Donohoe retakes his seat.

The Ceann Comhairle reminds deputies that the budget documents are confidential prior to Donohoe announcing them. Cue much guffawing in the chamber

The Minister is currently outlining the state of Ireland’s financs.

We’ve 19 consecutive quarters of employment growth, says Paschal. Things are looking good.

“This is close to the recognised level of full employment in Ireland.”

“The forecast deficit for 2018 is 0.2% of GDP,” says Donohoe.

“Our debt to GDP levels have come down impressively in recent years, but it needs to come down further.”

Fine Gael’s official Twitter feed is monitoring proceedings too:

We’re still going through the financial fundamentals.

Meanwhile, opposition deputies are using the time to get in some feverish Budget reading.

Ok here we go.

Tax reductions on income are to be introduced worth €335 million.

The Department of Finance is to raise additional revenues of €830 million, giving a total Budget Day package of €1.2 billion.

Donohoe allocating €1.83 billion for housing, increases HAP by €149 million

Paschal is talking housing.

“Commencement notices for new housing are up 47%,” he says.

I am allocating €1.83bn for housing in 2018, 3,800 new social homes will be built by local authorities.

The government will increase the Housing Assistance Payment by €149 million in 2018. An additional 17,000 homes and households are to be accommodated by next year.

Funding for homeless services will increase by to €18 million to €115 million next year.

Donohoe is set to make €750 million of the Irish Strategic Investment Fund available for commercial investment in housing finance.

Stamp duty on commercial property sales is to increase from 2% to 6%, about a percentage point higher than expected.

This is still less than the maximum rate of 9% charged between 2002 and 2008 Paschal stresses.

Increase of €685 million for Department of Health

Now we’re onto health.

Funding is already at record levels says Paschal. But it’s about to go even higher.

He’s set to increase the overall budget for the Department of Health by €685 million to €15.3 billion.

The threshold for the Drugs Payment Scheme is dropping from €144  to €134

The sugar tax is here

As was well flagged (it was put back from last year), a tax on sugary drinks is being introduced, it’ll stand at 30c per litre.

Excise on cigarettes increased by €0.50 on packet of 20

Meanwhile, more bad news for smokers (again, as was well-flagged) – excise duty on cigarettes is set to increase by by €0.50 on a packet of 20.

Source: TheJournal.ie/YouTube

Onto education.

The National Training Fund levy is set to increase from 0.7% to 0.8% to provide additional investment in higher education.

An additional €310 million is to be made available until 2021 to address the infrastructure needs of higher and further education.

Meanwhile, the Minister for Education is set to announce details of an additional €200 million investment in public private partnership in the sector to support regional development.

Onto the gardaí.

8 Source: Rollingnews.ie

800 additional gardaí are set to be hired in 2018, along with an additional 500 civilians.

Donohoe announces the provision of a Brexit Loan Fund

Paschal announces the provision of a Brexit Loan Fund.

It’ll see up to €300 million made available to small and medium enterprises (SMEs) to help them prepare for Brexit.

No change to VAT rate on the tourism and services sector.

Transport and sport now.

€9 million extra is to be allocated for public transport and roads up to €414 million to 2018.

Meanwhile, €111 million capital is being provided for sport next year.

Back to Brexit.

In addition to the previously mentioned Brexit Loan Fund, Donohoe announces an additional Brexit Response Loan Scheme for the agri-food sector.

He’s also set to keep the stamp duty relief of 1% for inter-family farm transfers for another three years.

Childcare.

An additional €20 million allocation will support ‘a range of childcare measures’.

Child and family agency Tusla’s budget increases by €40 million.

Electric vehicles.

In order to incentivise the takeup in non-fossil fueled cars, Paschal is bringing in a 0% rate of Benefit in Kind (BIK) for such vehicles, for a period of one year to allow for a ‘comprehensive review’ of the sector before next year’s budget.

The tobacco industry ain’t happy at the latest increase in excise duty on its products:

tobacco

Social welfare goes up €5 across the board

Source: TheJournal.ie/YouTube

Donohoe announces an increase in social welfare payments across the board of €5, again, as was widely expected.

Those increases will kick in from the end of March 2018.

The Christmas bonus this year, meanwhile, will be 85%.

USC and tax band changes - higher band of Income Tax increases to €34,550

Now onto the USC and tax bands. There’s a fair bit here.

The 2.5% rate of USC will reduce to 2% and its ceiling will rise from €18,772 to €19,372.

The next rate up reduces from 5% to 4.75%.

Income tax bands – the first higher band is increasing from €33,800 to €34,550.

The top rate of tax moves up to 48.75% on income up to €70,044.

Regarding the USC and PRSI – it looks like they’re set to be amalgamated – again, this was widely flagged.

Paschal is establishing a working group to plan over the next year how to bring them together.

And that’s it!

Paschal commends the budget to Dáil Éireann. Now we’ll have a lot of reaction.

First up are Fianna Fáil’s Dara Calleary and finance spokesperson Michael McGrath.

mmc

Michael says he “welcomes the progress made via many of the agreements we made” with Fine Gael via the confidence and supply arrangement.

Will this be the last budget negotiated with regard to that particular marriage of convenience?

McGrath is done with the government, and now has his sights set firmly on Sinn Féin – “they’re the classic hurler on the ditch – when the chance comes to have their say, they run for the hills”.

The Rainy Day Fund is set to be one of the talking points of the Budget just announced – McGrath says it is “the right thing to do”, so you know where Fianna Fáil stands.

It’s not a particularly fire-and-brimstone-y speech by McGrath. By far the most scorn he’s poured has been on his fellow opposition party Sinn Féin.

Something we missed earlier as Paschal raced through his speech – the vacant site levy is set to double to 7%.

Given the ongoing housing crisis, will that be enough to bring stagnant properties back onto the market?

Back in the Dáil, Michael McGrath is still talking.

“Online shopping is exploding,” he says. Not literally we hope.

3

So, what are your initial reactions to Budget 2018?

There’s a lot of new stuff in there, but is it revolutionary, or more a case of as-you-were?

Let us know. Leave a comment on the blog, tweet us @thejournal_ie or mail us at tips@thejournal.ie.

Michael McGrath has concluded his speech. Now it’s time for… Dara Calleary, also of Fianna Fáil. He’s not particularly animated either:

dara Source: Oireachtas.ie

He likewise draws attention to the fact that Fianna Fáil’s “mark is on this Budget”.

Which sums up the party’s problem – it’s had a huge amount of input into this year’s entry, so there’s only so much its representatives can say to admonish the government.

Which makes for dull enough speeches it has to be said.

The Social Democrats’ Catherine Murphy isn’t particularly impressed by what’s going on today – it’s a budget of “squandered opportunities” she says.

She pours particular scorn on the increase in the vacant land levy – saying that if it doesn’t even keep pace with land inflation then what’s the point?

soc

Sinn Féin housing spokesperson Eoin Ó Broin doesn’t think much of the Budget’s housing provisions:

Dara Calleary signs off saying that the Budget “is a lot more ambitious than it would have been if we hadn’t been involved”. Indeed.

Now, it’s time for Sinn Féin’s Pearse Doherty to have his say. Expect this to be a good bit more confrontational.

5

Doherty says: “at the centre of this Budget is a lie”.

“It’s a lie that says you can solve housing and health crises while at the same time lowering peoples’ taxes.”

“Sinn Féin showed you how this can be done, in our alternative budget,” he says to Donohoe.

What does the Budget mean for the child who has to listen to his mother crying in a hotel bedroom, night after night, because she feels like she has failed her child?

pjimage

Doherty wants to know why the Strategic Communications Unit is going to cost €5 million when the Taoiseach had previously argued it would be cost-neutral.

He brands it “just crazy” that in a €1.2 billion budget package the government prioritises tax cuts over building any additional social housing.

As Doherty speaks in the Dáil, the Sinn Féin statements are starting to arrive.

Here’s Eoin Ó Broin on the Budget and housing:

broin

Doherty isn’t impressed with the €645 million in additional funding for the Department of Health in 2018:

“You have failed to run a functioning health service, and are continuing to preside over a litany of failures.”

He raises the plight of a child with scoliosis who was left waiting two years for spinal fusion surgery:

She has no set date as of yet. That is a result of your policies. No one would set out to do that. But when you underfund your health budget that is what happens.

Meanwhile, the various Ministerial post_Budget press conferences are shuffling along.

Business and Enterprise ministers Frances Fitzgerald and John Halligan are currently having their say at Government Buildings:

 

“Today is World Homeless Day,” says Pearse Doherty. “Though I doubt the Minister is aware of that fact”.

“No additional social housing units on existing targets?” he asks incredulously.

3

For all the muted speeches that went before, no-one could accuse Doherty of delivering similar.

He’s been loud, pointed, and angry.

“We’re actually incredulous,” he says of what Paschal Donohoe announced regarding housing and homelessness initiatives, or the lack thereof in his party’s opinion.

“Fine Gael doesn’t believe in social housing. We expected the government to do what it always does. But to do nothing at all. It’s actually incredible.”

Here’s what the Garda Representative Association had to say about the announced increase in Garda numbers for 2018:

garda numbers

6

Doherty’s marathon speech finally comes to an end.

Assuming Donohoe is paying rapt attention, he’s getting a helluva chastising.

“Minister, this could’ve been a very different budget. You’ve done what you always do. You’ve got one eye on the next election. You hope that you’ve done enough to pick up enough people to safeguard a return to the government benches,” he says.

“But Minister we’re elected to lead this country. At a time of crisis we have to prove that we can lead.”

I said I would judge this budget on housing and on health. On both counts you have failed, and failed spectacularly.

I will repeat, I cannot for the life of me understand that no provision has been made to deliver additional social housing compared to what was promised by the previous Housing Minister Simon Coveney.

No more has been given to health to stop that service from running to stand still.

“I am extremely disappointed in this budget,” he concludes.

Labour’s Joan Burton is up now, with Alan Kelly.

The Department of Justice has a specific initiative in store with its additional budget allocation of €63 million.

An anti-terrorism Passenger Information Unit is on the way.

There’s trouble brewing on the health front. The National Association of GPs (NAGP) has reacted angrily to the levels of funding announced by Paschal Donohoe for the Department of Health – specifically a lack of ‘meaningful’ investment in General Practice.

They say that GPs are set to consider industrial action as the government has declined to reverse the application of FEMPI (Financial Emergency Measures in the Public Interest) for General Practice:

gps

joan Source: Oireachtas.ie

Meanwhile, back in the Dáil chamber, Joan Burton says that the Budget shows “an alarming lack of vision”. She’s particularly concerned about rural development.

Alan Kelly, who’s sharing the Labour speaking duties, then gets to his feet.

“Wake up there Minister,” he says. We’re not sure which Minister he was talking to, most of Fine Gael have fled the chamber for press events. But to be fair, it has been a long three-and-a-half hours.

Kelly has brought a prop with him…

… it’s a cup of coffee!

Source: TheJournal.ie/YouTube

For this is the Cup of Coffee Budget, Kelly says, “because the price of a cup of coffee is all you get”.

In fact, it’s a Charlie McCreevy cup of coffee, because it’s once more totally reliant on the property market.

Three hours in and that’s the first prop. For shame.

Kelly takes aim squarely at Minister for Transport Shane Ross:

“I can’t tell what Shane Ross is doing in this government, for the life of me. I can tell by the chairman’s face that he can’t tell either.”

Back to the coffee cup analogy, which is about as close to a diversion as we’ve come unfortunately, Kelly says that the government’s promise to raise social welfare payments across the board by €5 is something of a misnomer:

Will the government stop telling lies when they say they’re giving €5 a week [in social welfare payments]? When you take out the calculator it’s €3.80.

Our sister site Fora spent the duration of the Budget speech breaking down the significant aspects of what Paschal had to say from the point of view of Irish businesses.

You can have a look here.

fora Source: Fora.ie

murp

Solidarity-People Before Profit’s Paul Murphy is speaking in the Dáil now.

Earlier, the allies’ Twitter feed came up with this zinger, which is a stark statistic to put it mildly:

“It’s a state hallmarked by inequality,” Murphy says of Ireland.

In reality the crisis will get even worse, and this Budget will only deepen inequality.

Over in Government Buildings, meanwhile, Housing Minister Eoghan Murphy is talking about, well, housing.

He’s in bullish form. He says that the government’s year-old housing strategy Rebuilding Ireland “is working”.

The Minister says that 5,000 social homes will be constructed next year, up from 3,100 last year, with 900 of those coming from acquisitions.

There are a lot of different interpretations of the government’s housing figures coming out of today’s Budget, it must be said. The government says it’s making progress. The opposition says its gobsmacked at the lack of initiative being shown at the height of a full-blown housing crisis.

It should be noted that it’s not particularly warm today in Dublin. Nevertheless, Eoghan Murphy’s sleeves remain stubbornly rolled-up.

Murphy has just described the Minister for Finance as Paschal the Privatiser.

It trips off the tongue you can’t deny.

3 Richard Boyd Barrett Source: Oireachtas.ie

Richard Boyd Barrett follows Murphy. He says today’s Budget is one “of crumbs”, that does nothing to solve the “huge crises this country faces”.

RBB doesn’t have a prop, but he is armed with Beatles references:

One of Paschal’s favourite words is ‘prudence’ and I feel like quoting a line from the Beatles song ‘Dear Prudence’ to him:

‘Dear Prudence open up your eyes’.

While saying this, his Twitter account posts the following:

Now that’s multitasking.

Health Ministers Finian McGrath and Simon Harris are now holding their Budget presser in Government Buildings.

Health, along with Housing, is attracting more criticism than any other provision in the new Budget:

Boyd Barrett says that the nurses that the State needs to recruit can’t be found “because you won’t pay them Minister”.

You practice pay apartheid.

Ok folks, we’re going to bring the Liveblog to an end here. It’s the end of the blog, but naturally we’ll continue to provide Budget coverage on the main site throughout the evening.

Thanks for being with us, bye.

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