FOLLOWING WEEKS OF speculation, Budget 2020 will be revealed by Finance Minister Paschal Donohoe this afternoon.
Donohoe will take to the Dáil chamber at 1pm – with all TDs expected to be in attendance – where he will read his Budget speech outlining the fiscal measures for 2020.
Some of the measures, such as the mooted increase in VAT for cigarettes and carbon tax, are expected to come into effect at midnight tonight, while others will be phased in next year.
With €2.1 billion committed to existing projects, as outlined in the Summer Economic Statement, it was thought the remaining €700 million would be earmarked for tax cuts and increased spending.
Donohoe, however, sought approval from Cabinet to deliver measures that will mitigate against the potential economic fallout for Ireland if the UK leaves the EU without a deal on 31 October.
A statement from the Department of Finance at the time said the budget aims “to give certainty to businesses and citizens” and “supporting sectors and regions most exposed to Brexit-related disruption”.
Cabinet approved the minister’s request last month and so the ‘no-deal Brexit budget’ was born.
At the Fine Gael presidential dinner on Saturday, Taoiseach Leo Varadkar said “this Budget, because of Brexit, has to be different”.
“We will not be able to afford tax and welfare packages on the scale of our last three Budgets. There will, however, be a modest and targeted welfare and a minimal but targeted tax one,” he said.
Proposals
In recent months, political parties and organisations across the country have been submitting their proposals to the Government ahead of Budget 2020.
No measures will be officially confirmed, however, until Donohoe makes his speech in the Dáil chamber today.
Following that speech, members of the opposition parties will take to the floor for up to one hour each to make a statement on the budget measures.
Meanwhile, ministers from various government departments will attend press conferences throughout the day, addressing those measures which relate to their own departments.
What can we expect?
Income Tax was set to be the big selling point for Budget 2020 – floated by Taoiseach Leo Varadkar earlier this year – but it looks like there will be little-to-no change for workers this year.
At the beginning of the summer, Varadkar had suggested raising the income tax threshold by €2,500 over the next five years from its current level of €35,300, in the case of a single worker.
The traditional €5 increase to social welfare payments, including the old age pension, has effectively been ruled out, with the Government suggesting other measures such as home benefits will be announced to support groups like pensioners instead.
The tight spend on social welfare also prompted concerns that the Christmas bonus might be facing the chop this year.
But Donohoe indicated late last week that the payment would not be reduced or scrapped, and would be paid at the same rate of 100%, just like last year.
Discussions around the carbon tax have been ramped up in recent weeks, as groups like Extinction Rebellion – which is engaging in a week-long protest this week – call for new measures to tackle climate change.
All measures come against the backdrop of the Brexit, and speaking on Saturday, Varadkar said “there will be a very substantial package to helps business and jobs that are viable into the future but vulnerable because of a hard Brexit, especially in sectors like tourism and agrifood.”
TheJournal.ie will keep you posted on how it all unfolds – with rolling coverage, a liveblog and reaction to the Budget 2020 package as all measures are announced later today.
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