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A LOT OF it had been leaked in advance, but there were still some surprises in Budget 2017.
Finance Minister Michael Noonan and Paschal Donohoe delivered an increase of €5 in almost all weekly social welfare payments, cuts in the lower USC rates, and an increase in the price of cigarettes, among everything else.
- Budget Calculator: See how Budget 2017 affects your pocket
Stick around for all the news, analysis and reaction to Budget 2017. And as always, leave your thoughts in the comments section, tweet at us @thejournal_ie or mail us on tips@thejournal.ie.
It’s Gráinne Ní Aodha kicking off Budget Day with a quick look at what to keep an eye and ear out for:
What do you want to see in this year’s budget? Leave your thoughts in the comments section below.
This year’s budget isn’t expected to hold many surprises.
The reason for this? During the 70-day negotiations to form a minority government earlier in the year between Fine Gael, Fianna Fáil and independents, most of the measures were agreed upon. As a result, most of the main announcements have been made in the media and discussed on the airwaves already.
Leaks are also EVERYWHERE today, leaving nothing to the imagination.
We don’t know if this government is a sinking ship, but it’s certainly a leaking one.
One thing that has surprised us, is An Taoiseach Enda Kenny announcing to his Mayo supporters that he will run in the next general election.
This is a complete u-turn on previous claims he made during the last general election – when he said that it would be his last.
He is confident, you’ve got to give him that.
The total amount the Government spent last year was €75.3 billion: this year, it’s expected that over €1 billion more will be added to that figure.
This is the controversial ‘fiscal space’ that was announced earlier this year, controversial because some people argued that it shouldn’t be spent, and should be kept in reserve.
Others say that if we did accept the €13 billion Apple Tax, the government could afford to provide hospital beds and staff, increase garda pay, and increase the minimum wage (currently at €9.15 an hour) – things that aren’t likely to be done in this year’s budget.
The Government is expected to take in over €70 billion in revenue this year and is likely to exceed record highs reached in 2007 just before the economic crash.
Another area to look out for is a tax refund for first-time buyers.
The government hinted that this would be done to help young people buy newly-built property, but others, including representatives of the construction industry, said that this would push house prices up – and would only benefit developers.
There is also the argument that first-time buyers don’t buy new builds, and would only benefit those who are wealthy.
NewstalkFM presenter George Hook seems worried.
Darragh Peter Murphy here, picking up on Budget Day.
Here’s a reminder of some measures people will be looking out for in Budget 2017:
What do you want to see in this year’s budget?
Leave your thoughts in the comments section below.
Here’s a slightly breathless Taoiseach Enda Kenny on the way into Government Buildings.
“We have a number of items to tidy up,” he said, with the air of a man who could do with a bit of fiscal space himself.
Meanwhile, here’s Enda’s slightly more frightening forebear Charles Haughey back in the day.
Although he looks like he’s about to murder us all, Charlie was actually just preparing the little people of Ireland for a spot of old-fashioned belt-tightening in #Budget1981.
“As a community, we are living a way beyond our means,” he said, although Haughey’s scarcely audible pronunciation of the ‘s’ made it sound like “beyond our mean”.
[Can't see the video? Click here]
Meanwhile, TheJournal.ie‘s Christina Finn has warned that’s about to get messy down in Leinster House, as political correspondents sink their teeth into the Budget details.
That’s politics for you though: the terrifying lows, the dizzying highs – and the creamy middles.
Ooooh this is interesting.
Any guesses as to which party or TD dropped their Budget notes around Leinster House?
“Conjuring trick”, “pro-wealthy options” and a “small elite” suggests it’s a centre-left politician.
What about that shifting segment of the population, the squeezed middle?
Inflation of what constitutes the squeezed middle inflation seems rampant, as the economy improves and disposable income rises.
In a rejection of the recent narrative that middle-incomes are between €35,000-€75,000, Michael Taft of Unite says said that politicians and commentators cynically inflate what exactly constitutes the ‘middle’.
One thing that’s almost certain to happen is a rise in the cost of cigarettes and tobacco.
Hi folks, it’s Christine Bohan here for the announcement of the Budget, which is due to begin any second now.
Michael Noonan and Paschal Donohoe left from Government Buildings for Dail Éireann a few minutes ago.
PS: For anyone who had money on the tie colours – Paschal Donohoe went for the traditional blue while Micheal Noonan went for a purple one.
The mystery of the missing Budget speech has been solved! Solid investigative work by Irish Times journalist Fiach Kelly, who found that the speech belonged to Richard Boyd Barrett.
Ceann Comhairle Seán Ó Fearghaíl begins by reading the opening prayer and then calling on Michael Noonan to deliver his speech. It’s officially beginning.
Noonan begins by easing us in: He says that the economy is in good shape, with sustainable growth forecast for the next few years.
He says the Budget will have €500 million worth of tax cuts, out of a total package of €1.3 billion. The government has gone for increases in expenditure rather than reducing revenue by a margin of 3:1, which, he says, is a sign of the government’s commitment to public spending.
Michael Noonan is now talking about the impact of Brexit, which, he says, has increased risk to the Irish economy. “We must put in place safety nets to protect us against future economic shocks,” he says.
This is interesting: Noonan has announced a new target for Ireland’s debt-to-GDP target. He says he wants Ireland’s debt to be 45% of GDP by the middle of the 2020s.
“We must get away from forever the cycles of boom and bust,” he says, pointing out that they have done “so much damage in the past”.
Noonan says he’s keeping the 9% VAT rate for businesses involved with tourism. This had been a bit of a controversial one – the ESRI called for it to be overhauled, and questions had been raised about whether it was still needed. Noonan notes this in his speech, saying that the rationale for it is not as strong as it was. May be something that will change in next year’s Budget?
This is one for people who are looking to buy a house in Ireland’s chaotic housing market right now. Michael Noonan announces a help-to-buy scheme for first-time buyers. They will be able to get a PAYE refund of up to 5% of the price, up to a maximum cap of €20,000. However, this is only going to apply to new builds.
What do you make of that? Is that what Ireland’s housing market needs right now?
For anyone involved in a business, you can follow all the important business-related developments in this Budget over on our sister-site Fora. (Tell them we said hi)
Here’s one that a lot of people were waiting for: USC
Noonan says he is reducing each of the three lower USC rates by half a percent. So the 1% rate will drop to 0.5%, the 3% will drop to 2.5% and the 5.5% rate will drop to 5%. He’s also increasing the ceiling of the band for the 2.5% rate.
Noonan says that Ireland’s corporation tax is not going to be changed in this Budget.
“Nobody in Europe or anywhere else is asking for it to be changed,” he says. He’s now going through the reasons why it matters so much to Ireland.
DIRT (the Deposit Interest Retention Tax) will be reduced by 2% every year for the next four years. It’s currently 41% so it will be down to 33% by 2020.
A couple more things on housing:
Firstly, Noonan says he is extending mortgage interest relief until 2020 (it was originally due to end in December 2017). However the full details of these won’t be released until next year.
Secondly, and possibly more interestingly, there’s an increase in the tax ceiling for the Rent a Room scheme, bringing it up to €14,000 per year (an increase of €2,000). Noonan says this is to encourage homeowners to rent out any vacant rooms they have.
Michael Noonan in the final minutes of his speech now. Paschal Donohoe is almost up.
SUGAR TAX ALERT. This has been mooted for a long time, but Noonan has an exact date for it now. He says the tax on sugar-sweetened drinks will begin in April 2018 (which is around the time the UK will be bringing in a similar tax).
Bad news for smokers: excise duty on a pack of 20 cigarettes is going up by 50 cents, meaning that they will cost close to €11. Noonan points out that this is the only tax increase in today’s Budget.
Pretty clear what the big issue has been so far:
Noonan ends by pointing to the economic achievements under his watch over the past five years. Unemployment has fallen from 14.3% to 7.9%, while the deficit has fallen from 32% of GDP to an estimated 0.4% next year.
He tells the Dáil:
We have come a long way and the objective set in our medium-term fiscal policy is within our reach, provided we continue to act responsibly and implement prudent fiscal policy.
Final words from Michael Noonan:
Paschal Donohoe up now. He is emphasising the importance of fairness, saying that it has informed how he put together his part of the Budget.
Aside: someone sitting beside Paschal Donohoe keeps coughing loudly into a microphone close to him. They do not sound well.
Donohoe says that there will be €1.2 billion for housing this year, which is more than double the amount allocated to it last year.
Health is also going to get more – an additional €497 million, Paschal Donohoe says, bringing the total spending up to €14.6 billion. This is the highest investment in health in the history of the State, he says.
This has been well-flagged, but now it’s official: There’s going to be a €5 increase in the pension. Good news for the 650,000 people who receive the pension – and good news for Fianna Fáil too, who pushed hard for this.
This had been hinted at, but now it has been announced: it’s not just the pension – ALL weekly social welfare payments, including disability allowance, carer’s allowance and jobseeker’s benefit and allowance, and one parent family payment, will rise by €5 per week in March.
Some big figures for housing: There’s going to be an extra €28 million for emergency homeless accommodation, which is badly needed, as well as an extra €105 million for the Housing Assistance Payment. The Minister says this will help an additional 15,000 households to avail of the scheme.
More news for older people: The €25 cap on prescription charges for people who are over 70 will be reduced to €20 from the start of March.
Some good news for people on social welfare: 85% of the Christmas bonus will be paid out this year.
Polish up the CVs: 800 new gardaí are going to trained up and hired next year, Paschal Donohoe tells the Dáil.
Childcare is getting a big overhaul: The new Single Affordable Childcare Scheme will begin next September, and will provide a universal subsidy to families who use childcare for their children under the age of 3. There will also be means-tested subsidies for children aged between 6 months and 15 years.
Paschal Donohoe says that the cost of restoring pay for all the civil and public servants who had their salaries slashed during the depths of the recession is still too big for the country, but announces the establishment of a commission which will look into how their pay can gradually be restored.
Also, there will be some money towards this in this Budget: he announces €290 million to towards partial pay restoration agreed under the Lansdowne Road Agreement.
For anyone who has ever driven along a terrible road in Ireland (i.e. most of us), here’s something.
There’s going to be €319 million allocated for local and regional roads across the country.
One for anyone living in a broadband blackspot*: €15 million is being allocated to progress the procurement of the National Broadband Plan to provide high-speed broadband to areas of rural Ireland.
*Hi, by the way. Glad you could join us.
Ok, Paschal Donohoe is finished up now so that’s it. We now know what’s in Budget 2017. But how does it affect me, you ask. Well, head over to our Budget Calculator now to see if you’ll be getting more change in your pocket in the coming months.
There’s now going to be seven hours (!) of reaction from the opposition benches. Might want to settle in for the night.
First up is Fianna Fáil’s spokesperson on Finance Michael McGrath.
Here’s more on some of the biggest announcements in the Budget:
You can get a round-up of all the main points here.
Our politics reporter Christina Finn notes that Fianna Fail’s Michael McGrath, who is speaking now in the Dáil, is poking holes in the first-time buyer scheme which has just been announced. He says that it will push up the price of houses.
Two quick points to chew over:
So was John Halligan annoyed about something in the Budget? Our reporter Christina Finn is down at Leinster House and she says that he wasn’t actually shaking his head at the end of Paschal Donohoe’s speech:
It’s understood that Halligan was reading another brief at the time. He wasn’t annoyed and there’s 100% no issue at all, according to someone close to him.
So there you go – no trouble in paradise (or at least, not in this corner).
Solid question from Órla McLaughlin in the comments:
More from Leinster House: Sinn Féin TD Louise O’Reilly says she is very disappointed by the Budget, particularly by the announcements about health.
From our reporter Christina Finn:
She said the government plans to recruit 1,000 nurses – however, they have tried to recruit nurses already and are not receiving the applications.
She said until measures are introduced to better the circumstances for nurses there is no way they will reach their target of 1,000.
“They just can’t do it,” she said.
How does all this change things for you? Well, if you’re making about €30,000 or so, this is what it means. (We’ll be doing more income brackets over the course of the afternoon).
Christina Finn has been speaking to some (non-government) TDs in Leinster House to see what they make of the Budget. Needless to say, they’re not too impressed. She told us:
A TD who was previously in government criticised the fact that there is nothing in today’s Budget about water charges. ‘There’s nothing in those estimates about water charges, nowhere.”
Another TD didn’t mince their words when asked what they thought of this Budget. “Shite”.
“You get more money to stay in bed than you do to get out to work.”
There were a number of good news stories for the self-employed in today’s Budget, writes my colleague, Cianan Brennan.
A section of society that has been less than impressed for some time with the disparity in treatment between themselves and PAYE workers when it comes to benefits among other things, the sector has received a number of fillips today.
Michael Noonan today announced that from January 2017 the Capital Gains Tax (CGT) threshold on earnings for entrepreneurs will be decreased from 20% to 10%.
Also, the tax penalty for the self-employed has been narrowed with the earned income tax credit rising by €400 to €950.
This is however less than the €550 that was widely expected, and also leaves the sector lagging behind the automatic cutoff deduction for PAYE workers of €1,650.
And speaking of business, Fora, our sister site, has been looking at how Budget 2017 affects small businesses – and finds that it hasn’t been great. Paul O’Donoghue writes:
The Budget “failed to deliver for small businesses” with no major movement on key measures such as capital gains tax and share-based pay schemes.
Finance Minister Michael Noonan announced today that the government will reduce the 20% rate of capital gains tax to 10% on disposals of qualifying assets up to a limit of €1 million.
This means that if someone is selling a business for €20 million, they will only pay 10% on the first €1 million, while the standard 33% rate will apply thereafter.
The news is likely to come as a disappointment to many startup and small business campaigners, who were pushing for the relief to apply to the first €10 million of an asset sold.
Back over at Government Buildings, where Mary Mitchell O’Connor and Minister of State John Halligan are giving a post-Budget briefing, the Minister for Jobs has said that she is “pretty sure” that Ireland will be able to deal with Brexit responsibly. My colleague Daragh Brophy got the quick video clip:
The Irish Heart Foundation isn’t too happy about the delay in bringing in the tax on sugary drinks (noting that Noonan made the announcement on World Obesity Day).
“The decision to postpone the introduction of a sugar-sweetened drinks levy to 2018, despite it being a cornerstone measure of the new national obesity strategy, suggests there is still no genuine cross-government commitment to tackling obesity,” said Chris Macey, the head of advocacy at the IHF.
Quick poll: are you in favour of a sugar tax?
Interesting and slightly tongue-in-cheek comment on our Facebook page from a reader asking why smokers are always targeted in the Budget:
Why do they always pick on us smokers? We already pay proportionally more of our income towards taxation and we also tend to die a lot sooner, which results in savings as regards state pensions, etc. Smokers are more cost effective than non-smokers.
Budget Day is always a good day to roll out a word cloud. Here’s what Michael Noonan’s speech looks like if you reduce it to the frequency of how often each word was mentioned:
And here’s Paschal Donohoe’s:
By the way, while we’re all looking at the Budget, Donald Trump is having a massive go at his own party.
A big promise here from Minister for Communications Denis Naughten: he says that the €15 million being allocated to the National Broadband Plan to provide high-speed broadband to parts of rural Ireland will be going towards fiber internet, which will offer speeds of up to 1GB.
One for anyone living in parts of rural Ireland with bad internet connections: what do you make of this promise?
More reaction from Buswell’s Hotel just opposite Leinster House, where Pat Clarke, the CEO of Down Syndrome Ireland, has been talking to our reporter Daragh Brophy about this Budget:
There’s been some criticism of how young people won’t be getting the same social welfare increases as everyone else.
In the speech this afternoon, Paschal Donohoe said all weekly social welfare payments – including disability allowance, carer’s allowance, jobseeker’s benefit and allowance, and one parent family allowance – will be going up by €5 a week from March.
However for people aged 18-24 the increase will be just €2.70 per week, while 25-year-olds will get an extra €3.80 per week.
The National Youth Council of Ireland has called it “mean-spirited” and “miserly”.
The ink is barely dry on the Budget and Willie O’Dea is already out claiming it as a victory for Fianna Fáil. The party will be abstaining from the vote on the Budget in order to allow Fine Gael to pass it, and pushed hard for a number of measures – most notably the €5 increase in the pension – in return for its support.
In a press release, the FF Spokesperson on Social Protection says that his party’s influence has put a stop to five years of regressive budgets.
“Today Fianna Fáil has forced Fine Gael to draw a line in the sand on its regressive budgetary policies,” O’Dea said.
Without the influence of Fianna Fáil, in opposition, Fine Gael would have been free to continue with their right wing agenda when it comes to social welfare.
One of the most-read articles on the site right now is about the Government’s scheme to encourage first-time buyers to purchase new homes, which was announced by Michael Noonan this afternoon.
There has been some criticism of the scheme on social media – and in the comments under the article – with people suggesting that it won’t do anything to solve the problem of over-demand coupled with not enough supply of housing, particularly in parts of Dublin.
However, Housing Minister Simon Coveney is strongly behind the measure, saying that the focus is on supplying new places for people to live.
Pat Doyle, the CEO of the Peter McVerry Trust, has praised the extra €28 million in the Budget for emergency accommodation for homeless people, as well as the increase in the threshold for people renting out a room in their home.
Doyle said:
At the moment people seeking to exit homelessness are often competing with students to secure accommodation. If we can get students out of the private rental market and into other suitable forms of accommodation like the rent a room scheme it hopefully means we can help get more people out of homelessness
Odd that this didn’t get a mention from either Michael Noonan or Paschal Donohoe.
This increase will take the minimum wage up to €9.25 per hour (which was the recommendation from the Low Pay Commission earlier this year), meaning an extra €203 per year for someone working full-time on the minimum wage.
If you’re just catching up on all things Budget, here are all the points you need to know in exactly 1 minutes and 40 seconds.
Michael Noonan was just asked on RTE Radio One’s DriveTime about whether he should start ignoring advice from the construction industry, who are the only people who appear to be welcoming the tax relief for first time buyers. Noonan’s response?
That’s like ignoring doctors for medical advice.
On the sugar tax, Michael Noonan explained his reasoning in delaying it to Mary Wilson (and how Northern Ireland had a big impact on it):
I intended about a year ago to do it this year. I was looking at what they’re doing in the UK and they’re introducing it in January 2018. The supply lines are very connected between the UK and Ireland and very connected into Northern Ireland. The final straw was once Brexit came, I said we need to align the two taxes.
I don’t want boot-loads of soft drinks coming down from Newry.
RTÉ Radio 1 / SoundCloud
A small but welcome part of the Budget: dental and optical benefits – which were taken away from PRSI workers during the depths of the recession – are to be restored.
2.3 million people (all PRSI employees and the self-employed) will be able to avail of free teeth cleaning and money towards glasses. Dazzling white teeth all around!
Strong words from Pearse Doherty, Sinn Féin’s spokesperson for finance, on today’s Budget.
“It has done what Bertie Ahern would have done if he was still in power,” he told RTE Radio One’s DriveTime programme.
“It’s basically made sure that anybody and anyone was satisfied so it’s politically proofed but it doesn’t actually transform anything.”
On Snapchat? So are we. Our editor Susan Daly has been Snapchatting all the main points from today’s Budget with a frankly magnificent array of props. Check us out @thejournal.ie
Ok folks, we’re going to call it a night on this liveblog. Thanks for all your comments, tweets, poll votes and emails – as always, they’re much appreciated. Our coverage on the site will be continuing throughout the evening.
>> Budget Calculator: See how Budget 2017 affects your pocket <<
We’re going to be putting your post-Budget questions on housing and children to Ministers Simon Coveney and Katherine Zappone live on Facebook at 7pm on Wednesday night. Got any questions you’d like them to answer? Send them to editor@thejournal.ie.
Thanks all, and good night.
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