Mostly bitter budget with a little sweetener

October 16, 2013October 16, 2013965 Views

Another tough budget designed to save €2.5 billion next year contained an unexpected sweetener of a €500 million jobs stimulus package.

The measures unveiled in the Dáil yesterday by Minister for Finance Michael Noonan and Minister for Public Expenditure and Reform Brendan Howlin are intended by the Government to pave the way for the end of austerity.The budget included a wide range of spending cuts and revenue-raising measures rather than any major change in the tax or welfare system.The “old reliables” were hit, with beer, spirits and cigarettes going up by 10 cent from midnight last night, while the price of a bottle of wine will increase by 50 cent.On the stimulus side, the budget saw the retention of the reduced 9 per cent VAT rate for tourism-related services.

A tax incentive for home improvements worth between €5,000 and €30,000 was introduced, the air travel tax was scrapped and a range of incentives for business and innovation were outlined.

“The purpose of this budget is to continue the progress we have made; to reinforce policies that grow the economy; to establish the conditions which will create jobs, and to prepare for exiting the bailout programme,” Mr Noonan said.

He said there would be no increases in income tax or the universal social charge in 2014, nor would there be increases in excise duty on petrol, diesel or on home heating oil and gas.

Mr Howlin announced a range of public investments that would be made from the €400 million obtained through the awarding of the National Lottery Licence.

While €200 million has already been committed to the construction of the national children’s hospital, the rest will be used next year to fund road maintenance and repairs, sports capital grants, housing for older people and those with a disability and a number of 1916 commemoration projects.

Fianna Fáil finance spokesman Michael McGrath said it was the third budget in succession that had placed a disproportionate share of the burden on those least able to carry it.

Sinn Féin finance spokesman Pearse Doherty said the Government was “pitting grandparent against grandchild” by ending the telephone allowance for pensioners and introducing free GP care for the under-fives. Source: The Irish Times.