MINISTER FOR FINANCE Paschal Donohoe has said the government won’t “make the mistake” of lowering personal taxes in this Budget in case they might have to increase it in future due to the effects of Brexit.
Speaking to RTÉ Radio One’s Morning Ireland, Donohoe reiterated that Budget 2020 will be based on a no-deal Brexit.
While increases to social welfare had become a regular fixture in recent Budgets, the minister said that any increases will be “very targeted”.
At last year’s Fine Gael Ard Fheis, Taoiseach Leo Varadkar committed to increasing the point at which people pay the top rate of tax to €50,000. Given the looming threat of Brexit, that won’t be happening any time soon.
Donohoe said: “I was saying that as well… [but] we need safe national finances. We won’t make the mistake of decreasing the tax the one day and having to increase it the next.
We have to make a choice now because the risk is simply higher than we could’ve expected.
On the potential for a carbon tax, Donohoe said he was “actively considering what way this can be done”. Fianna Fáil leader Micheál Martin said on Tuesday that there would “need to be” a carbon tax in Budget 2020.
Turning to the supports that would be available to businesses most at risk due to a no-deal Brexit, the minister said these would be “highly targeted” to companies that need support.
“The rainy day fund is one of the options I’ll consider,” he said.
Donohoe added that a “better performance” is required in public expenditure with overruns last year in health and other departments “not acceptable”.
Budget 2020 will be announced on 8 October.
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