AROUND THIS TIME tomorrow we’ll be getting ready for Michael Noonan to take to his feet in the Dáil and begin announcing the details of Budget 2015.
The leaks have not flowed as freely as they have in previous years with the focus in recent weeks having centred on the ‘McNulty-gate’ affair and the two Dáil by-elections at the weekend.
But over the weekend and today some details have begun to emerge on just how the long-flagged tax cut will breakdown and what sort of extra spending we will see given there is no longer a need for extra taxes or spending cuts to hit the deficit target next year.
So here’s what we know so far…
The tax cut
The tax package on the table has been agreed by the high-powered Economic Management Council of the Taoiseach, Tánaiste and two finance ministers and will go to Cabinet for approval tomorrow.
In a bid to ease the 52 top marginal rate of tax (when income tax, PRSI and USC are combined), the government will take a two-pronged approach with changes to income tax and Universal Social Charge (USC). The top income tax rate of 41 per cent is expected to be cut to 40 per cent and the threshold at which people enter this new higher rate will rise from €32,800 to €33,800.
On USC, the government is expected to increase the bands rather than make any changes to the rates. This will be aimed at helping low and middle income earners who currently pay 2 per cent USC on the first €10,036 they earn, 4 per cent on earnings over that amount and 7 per cent their earnings above €16,016.
These will form part of a three year tax plan that Noonan is expected to inform the Dáil of tomorrow.
Water charges
The significant anger over water charges expressed by thousands of people on the streets of Dublin on Saturday means there was a timely leak of details about changes to the Irish Water regime this morning.
On the table are plans to widen the number of welfare recipients who can qualify for the €100 payment that had been planned for those on the household benefits package. Long-term unemployed and those in receipt of the Fuel Allowance stand to benefit, according to the Irish Independent today. There are also plans for Irish Water customers to be able to claim tax relief on their water bills of up to €100 a year.
Cigarettes and alcohol
Some of us are probably still reeling from the €1 on the bottle of wine that Noonan announced two years ago, but the good news is that there are no plans for further increases in excise duty on alcohol this year. But smokers will have to spend 20c extra on a pack of cigarettes.
The pension levy
Noonan has been the subject of much lobbying on this, particularly from his own backbenchers. Introduced in 2011, the levy on private pension funds was originally applied at 0.6 per cent annually but was increased to 0.75 per cent for this year. The plan is for it come down to 0.15 per cent next year, but could the Finance Minister scrap it altogether?
Spend, baby, spend
It won’t be like Budget 2005, but this will be the first budget in many years to announce some spending increases with plans for the Department of Education to get money to fund the hiring of 1,000 teachers and new SNAs.
A major social housing building programme is also due to be announced, possibly not until next week, with some €200 million in exchequer funding to be allocated. While Leo Varadkar is said to have secured an extra €500 million in health spending.
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