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Oct 15, 2014 - 4:44 PM
Irish Budget 2015: With Michael Noonan, finance minister, due to begin his Budget speech at 2:30 pm to be followed by Brendan Howlin, spending minister, the final big leak has been reported.
Joan Burton, tánaiste and minister for social protection, will announce a €5 increase in Child Benefit in today's Budget.
It has also been leaked that the Christmas Bonus for pensioners and social welfare recipients will be partially restored, up to around 25% of the weekly payment.
It was abolished some years ago.
So an early Christmas is not expected but it will appear like that today.
Earlier Tuesday report from Finfacts: Irish Budget 2015: Small income tax cuts; €100 for pensioners & Double Irish axed in 6 years
Main Points as delivered
- The minister said gross current expenditure for 2015 will be just over €50bn. This figure represents an increase of €429m over the 2014 Revised Estimates.
- He announced an overall capital investment of over €2.2bn for social housing provision for the next three years. This will involve three main strands.
- Headline unemployment to fall to just over 10 per cent next year and 2m will be at work in 2016.
- The 2015 deficit target is 2.7% of GDP.
- Total government revenue in 2015 will be €65.2bn while total general Government expenditure will be €70.5bn.
- Growth will be 4.7 per cent this year and 3.9 per cent next year following today's budgetary measures.
- The 12.5% corporate rate remains the key part of foreign investment incentives.
- The Double Irish tax dodge is to be abolished.
- From Jan 01 2015 all new Irish companies will become tax resident.
- Existing beneficiaries of overseas Irish letter-box companies can use them until the end of 2020.
- Noonan said a road map on tax reform will: 1) improve Ireland's R&D regime by fully phasing out the R&D base year from the 1st of January 2015 2) enhance Ireland's existing intangible asset tax provisions to make Ireland an even more attractive location for intellectual property 3) improve SARP, the special assignee relief programme and 4) increase the resources of the Revenue Commissioners in its role as 'competent authority.'
- The minister said farming is our largest indigenous industry with an annual turnover of about €26bn and 170,000 employees.
- While there will be no milk quotas from 2015 leading to new opportunities that we can exploit but we need to make additional land available to young and active farmers.
- He proposed 1) raising the income tax exempt thresholds by 50% and introducing a new threshold for leases of 15 years and over 2) allowing relief where the lessee is a company 3) removing the current 40 years of age threshold for leasing relief 3) extending stamp duty relief for non-residential land transfers between certain close relatives 4) removing stamp duty on agricultural leases in excess of 5 years.
- Noonan said given the positive outcome of the Agri-taxation review, a similar exercise for the Marine sector.
- He said a new Irish film tax credit scheme is due to commence in 2015 and he said he will consider in the context of Budget 2016 a possible increase to the €50m cap on eligible expenditure, subject of course to resource constraints.
- The reduced 9% rate of VAT on tourism-related activities has resulted in an extra 23,000 employed in the sector since mid-2011 and will continue.
- Noonan said that he was ending the 0.6% Pension Levy at the end of 2014. "The additional 0.15% Pension Levy I introduced for 2014 and 2015 will expire at the end of 2015."
- Capital Gains Tax relief introduced to incentivise the purchase of property between the 7th of December 2011 and the end of 2014 has been scrapped.
- With effect from the 1st of January 2015, the 80% windfall tax applying to chargeable gains on the disposal or development of land which are attributable to planning decisions made since October 2009.
- The 33% rate of Capital Gains Tax and other standard taxation arrangements will now apply to the property market as it does to other normal functioning capital asset markets.
- First time buyers will be able to save for their first home and retain 100% of the interest that they earn on their savings.
- This refund will apply from Budget night and will run until the end of 2017 in respect of savings up to a maximum of 20% of the purchase price.
- Noonan said he will launch a public consultation on hoarding development land; "I will examine what taxation measures might be taken to penalise land owners who do not develop land that is already zoned and serviced."
- The Water Charges Relief will be worth up to €100 per household per annum when claimed in the following year.
- To alleviate the burden of the new water charges on working families across the country, income tax relief will be available at the Standard Rate in respect of water charges up to a maximum of €500 per household per year.
- The Strategic Banking Corporation of Ireland, which is expected to be formally launched at the end of this month, will raise the availability of loans of longer duration coupled with more flexible conditions and potentially at lower cost.
- The Seed Capital scheme will be re-launched in the coming months.
- Noonan said that developing a considered and focused tax reform plan that reduces the 52% marginal tax rate on low and middle income earners in a manner that maintains the highly progressive nature of the Irish tax system is a key part of this commitment. This will be delivered over a number of Budgets.
- The tax system changes include: Increasing the entry point to the Universal Social Charge to just above €12,000 removing 80,000 low income workers from the charge altogether.
- Other tax changes include: 1) cutting the 2% USC rate to 1.5% 2) reducing the 4% USC rate to 3.5% 3) increasing the Income Tax Standard Rate band by €1,000 to €33,800 for single individuals 4) reducing the top rate of Income Tax from 41% to 40% 5) reducing the top rate of Income Tax from 41% to 40%.
- Noonan said tax changes enhance the progressivity of the income tax system with the top 1% of income earners now paying 21% of all income tax and USC collected. In contrast, the bottom 76% of income earners will pay 20% of the total.
- 1) A part-time worker earning €12,000 will continue to face no income tax and now no USC charge; 2) a minimum wage worker will now face a maximum USC rate of 3.5% 3) a working family with three children where both parents earn €50,000 each will have an additional €100 per month in their pocket 4) all employees with incomes in excess of €70,000 will continue to face a marginal tax rate of 52%.
- The measures announced today will cost an estimated €585m next year and this cost has to be paid for.
- So, with effect from midnight tonight, the price of 20 cigarettes will increase by 40 cents, with a pro-rata increase on other tobacco products. This will bring the price of cigarettes in the most popular price category to €10.
- Gross current expenditure for 2015 will be just over €50bn and represents an increase of €429m over the 2014 Revised Estimates.
- This increase is targeted primarily at critical areas in social protection, health, education, justice and housing.
- Howlin announced an increase of €210m in capital spending for 2015, to over €3.5bn. There will be further increases in 2016 and 2017.
- He said there will be an overall capital investment of over €2.2bn for social housing provision for the next three years.
- This will involve three main strands: 1) over €1.5bn will be directly invested from the Exchequer by 2017 2) Public Private Partnerships will be used to invest €300m in social housing units by 2017 3) an off-balance sheet financial vehicle will provide at least €400m from 2015 onwards to the Approved Housing Bodies.
- Howlin announced that he was allocating more than €800m for the housing programme in 2015.
- He said more than €450m of this will be capital expenditure. Further measures will be taken in 2016 and 2017.
- Howlin said it is the intention of the Government that €400m of public investment would be available, including from the proceeds of the sale of the Bord Gáis energy business.
- He said this will leverage private finance and provide for at least another 2,000 housing units over the period 2016 to 2018.
- An additional €10m will be provided for accommodation and related services for homeless persons.
- This will increase the annual expenditure for tackling homelessness to €55.5m next year.
- €12m has been allocated for the JobPath initiative in 2015.
- The Government is doubling the number of positions to 6,000 for the long-term unemployed on the wage subsidy scheme, JobsPlus.
- €19.4bn is available for Social Protection for 2015.
- Howlin told TDs about the importance of sustained investment in research, development and innovation.
- The combined research and development funding provision for Enterprise Ireland and Science Foundation Ireland next year is more than €260m.
- A low pay commission will be established
- Howlin said the capital allocation of €450m for the Department of Jobs, Enterprise and Innovation in 2015 will ensure continued strong support for job-creation.
- A new Back to Work Family Dividend will be launched to provide an additional incentive for families to move from welfare to work.
- This will allow families to retain the full Qualified Child increase of €29.80 per week per child for 12 months after their return to work and 50% of the payment in the second year.
- Child benefit to increase by €5 per child in both 2015 and 2016.
- A 25% Christmas bonus will be paid to welfare recipient s in December.
- Howlin said the Water Subsidy worth €100 per annum will be expanded to include all recipients of the Fuel Allowance schemes, who are not already covered by the Household Benefits measure.
- Howlin said the Coalition will provide €13.1 billion for health services in 2015.
- €8.3bn will be spent on education and €2.2bn has been allocated to Justice - Howlin pledges no increase in class sizes and an additional 1,700 new full-time teaching posts, including 920 teachers and 365 special needs assistants.
- EU Structural Funds totalling €1.2bn for Border Counties over next seven years + an extra €212m for the Arts.
- Howlin announces €600m allocation for Development Assistance humanitarian fund, including €10m annually "to support the Palestinian people" after Israel's bombardment of Gaza.
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