Finance Minister Paschal Donohoe has been revealing details of Budget 2018 in the Dáil this lunchtime.
The budget will amount to €60.9 billion for 2018 – That’s €12,700 per person in the country.
Current Spending for 2018 is €55.6 billion. Capital Spending of €5.3 billion in 2018, up €790 million on 2017.
The Finance Minister says the economy will grow by 4.3 percent this year and 3.5 percent next year.
Outlining budget 2018 in the Dail, Paschal Donohoe says that unemployment is to fall to 5.7% in 2018.
Total tax reductions in budget 2018 on income will be €335 million.
Rainy Day Fund
The Finance Minister is introducing a rainy day fund with a 1.5 billion euro injection to kick start it.
He says this is another important step in strengthening the country’s finances in a changing and risky world especially in light of Brexit.
Housing
€1.83 billion will go towards housing in 2018.
3,800 new social homes will be built next year while the Housing Assistance Payment scheme will also be increased by 149 million euro supporting an additional 17,000 households in 2018.
There will be an additional €18 million for emergency accommodation bringing the spend to €116 million, while there will be an extra 31 million for social housing expenditure – totalling 115 million.
500 million euro will go into the Direct Build Program with 3000 new social houses by 2021.
NAMA
€750 million from Ireland Strategic Investment Fund for commercial investment in housing through new entity – Home Building Finance Ireland
Nama will still be wound down, HBFI will comply with state aid rules but will use NAMA expertise.
Stamp Duty
Commercial Stamp duty is tripling from 2% to 6% from midnight tonight.
The figure is still well below the previous rate of 9%.
The Finance Minister said the reduction, to get the commercial property market moving again, worked and now the time is right to focus resources elsewhere.
Vacant Sites
There will be a 3% levy for the 1st year of vacant site to more than double to 7%. Any landowners who don’t develop in 2018 will pay 3% in 2018 but 7% from 2019 on.
7-year owners must retain assets to enjoy full relief of CGT to be lowered to 4-years.
Mortgage Relief
Mortgage relief will be lowered to 75% for 2018, 50% 2019 and 25% in 2020.
Health
There will be an increase of €685million in Health spending in 2018 bringing total to €15.3bn for 2018 – a 5% increase.
The National Treatment Purchase Fund is being given and extra €55m – treble that of 2017.
There will be funding for an extra 1,800 frontline staff.
A reduction in prescription charges for those under 70 years from 2.50 to 2 per item.
The Drugs Payment Scheme threshold will be lowered from €144m to €134m.
An extra €471m to be made available for Primary Care between 2018 and 2021.
The VAT rate on sunbeds has been increased to 23 percent – a rise of 9.5 percent. The Finance Minister made the announcement as a matter of health, citing the direct link between cancer and sunbeds.
Cigarettes and Alcohol
There will be an extra 50c charge on a pack of 20. A typical pack of cigarettes will now cost you around 12 euro.
Sugar Tax
A sugar tax is being introduced in line with the commitment made in the programme to Government and a full consultation process.
The levels are consistent with the rates being introduced in the UK and will commence at the same time in April next year subject to State aid approval.
There will be a 30 cent tax on a litre of fizzy drinks with 8g per 100ml and a 20 cent tax on a litre of fizzy drinks with 5-8g per 100ml.
Education
1300 extra teaching posts in schools for 2018. The student teacher ration will be lowered to 26:1
There will be 1000 extra special needs teachers by Sept 2018 bringing total to 15,000.
Gardaí
800 extra Gardai will be recruited in 2018. An additional 500 civilians will also be hired into the force.
Brexit
Brexit Loan Scheme for SMEs announced – €300 million will be available to them at competitive rates.
Total Department Business, Enterprise and Innovation Budget of €871m next year.
Tourism and Transport
The lower 9% VAT rate on tourism & services sector WILL NOT change.
The Department of Transport & Tourism will have budget of over €2bn – €112m for tourism and marketing the country.
Sport
The Department of Transport, Tourism & Sport will get €111m for sport in 2018.
Gaeilge
An extra €2.5m for Irish language training in 2018.
Agriculture
The Department of Agriculture will get extra €64m bringing the total in 2018 to €1.5bn
Children
Tusla will get extra funding of €40m for child protection bringing total to €754m
Childcare
20 million euro is being invested in ensuring a full free 2 year pre-school programme.
Social Welfare
An extra €5 per week in all weekly social welfare payments from the last week of March 2018. While the Christmas bonus will stay at its current level.
Tax
Low to middle income workers will no longer be penalised for working overtime.
The threshold for entry to the higher rate of income tax is to rise by 750 euro from €33,800 to €34,550.
The entry point to USC remains at €13,000.
The 2.5% rate is being lowered to 2% with the ceiling for this rate raised from €18,772 to €19,372. This keeps minimum wage earners out of it.
The 5% USC rate lowered to 4.75%
147,000 self employed to see Earned Income Credit raised €200 to €1150 in 2018
The Home Carer Credit to increase €100 in 2018 to €1200 a year.
Watch reaction to today’s announcement, which will continue here until the end of Dáil proceedings tonight:
Oireachtas webcasting is provided by the Houses of the Oireachtas Service, in association with HEAnet, Ireland’s National Educational and Research Network.
