Budget 2017: The Main Points

Minister for Finance Michael Noonan has finished speaking in the Dail, and among the budget headlines for 2017 are a new help-to-buy scheme for first-time buyers, a retention of the 9% VAT rate on tourism and hospitality, an increase of 50 cent per pack of 20 cigarettes, and a €5 per week increase in the pension from March next year.

Minister Noonan sys the national debt peaked at over 120% of GDP during financial crisis.

It will be down to 76% of GDP at the end of this year and we will continue to reduce it to achieve the target of 60% of GDP in accordance with the European Stability and Growth Pact.

He said a new domestic target of a debt to GDP ratio of 45% will hopefully be reached by the mid-2020s depending on economic growth.

 

USC

There will be a 0.5% cut in the three main rates of Universal Social Charge, as detailed in the Budget announced by Minister for Finance Michael Noonan.

It sees the 1% USC rate will be brought down to 0.5%, and the 3% rate drops to 2.5% payable from €18,668 to €18,772. The 5.5% rate meanwhile will fall to 5%,

 

Education

In Education, the government has committed to increase funding for 2017 to €9.5bn.

“There is no element of our national life that has not been transformed by the increased educational attainment of our people,” he said, with expenditure to include 2,400 extra teaching posts of which 900 will be resource teachers.

On childcare, there will be a Single Affordable Childcare Scheme from September 2017.

This will included means-tested subsidies based on parental income for children aged six months to 15 years, and universal subsidies for all children aged six months to three years.

 

Housing

To help address the current housing crisis nationally, the Minister announced too that 47,000 new social homes will be built by 2021, with €1.2bn in funding for Housing in 2017.

There will be an extra €28m for sheltered housing for homeless

The first-time buyers scheme, excluding second-hand properties, will provide a rebate of income tax paid over the previous four tax years, up to 5% of the purchase price of a new home up to a value of €400,000.

The Home Renovation Incentive Scheme meanwhile has been extended by two years to the end of 2018.

 

Welfare

The State pension is set to rise by €5 from March, with a rise too in all weekly social welfare payments. The Christmas bonus for all those on social welfare will rise to 85%, and jobseekers aged between 18-24 are set to see an increase of €2.70 from €100/week to €102.70.

 

Security

It has been announced that 800 new gardaí to be recruited in 2017, with more civilian staff to be appointed too by way of freeing-up currently desk-bound officers.

Funding for the Department of Defence is to increase by €16 million.

 

Business

The Start Your Own Business scheme has been extended for further two years, with a reduction of the 20% rate of Capital Gains Tax to 10% on disposals of qualifying assets up to €1 million.

The Earned Income Tax Credit for the self-employed is to be increased by €400, bringing it to €950.

Corporation tax will be unchanged at 12.5%.

 

Farming

The farm restructuring relief scheme is extended to the end of 2019, with payments under the new raised bog restoration incentive scheme exempt from Capital Gains Tax.

 

Health

The government will introduce a tax on sugar-sweetened drinks, to coincide with a UK tax in April 2018.

There will be an increase in excise duty on a pack of 20 cigarettes by 50 cents, bringing the price up to €11.

There will be increased spending of €497 million for health, with the medical card coverage extended to all children in receipt of a Domiciliary Care Allowance, a €25 cap on prescription charges for those over 70, and €15m is allocated to the National Treatment Purchase Fund to reduce waiting lists.

 

Rural Development

The budget for Rural Development Programme has been increased by €107 million, from €494m in 2016 to €601m in 2017. This includes €25 million to help fund a new Animal Welfare Scheme for Sheep.

 

Fine Gael Senator for Cavan/Monaghan, Joe O’Reilly commented that the government had ensured that Budget 2017 will help hard pressed working families, with measures designed to protect the economy and improve people’s lives.

“Fine Gael is using Budget 2017 to protect the progress we have made and build a strong economy. The gains we have made as a country are hard won and fragile, especially in the context of Brexit, but we are in a position to use some of the resources from our growing economy to help hard pressed working families in Cavan.

“One particular highlight of Budget 2017 in this regard is the significant investment in childcare, designed to make it more affordable for working families. Parents of a child between 6 and 36 months in full time formal child care will receive support to the value of €960 per year. There will also be a targeted subsidy scheme for low to middle income parents with children between 6 months and 15 years. This announcement is in addition to the steps already taken to help parents get back to work. Last month we rolled out a second free year of the Early Childhood Care and Education Scheme (ECCE) and introduced two weeks of paternity leave,” he said.