Budget 2019: €300m in tax cuts expected in giveaway election budget

Budget 2019: €300m in tax cuts expected in giveaway election budget

By Daniel McConnell, Fiachra O Cionnaith, Elaine Loughlin

Finance Minister Paschal Donohoe will deliver his giveaway election budget and announce up to €1.5bn in new spending, almost double what he previously said he would spend.

The additional spending will be divided up on a 4:1 basis between €1.2bn in new spending measures and €300m in tax cuts, as opposed to the 2:1 split agreed with Fianna Fáil.

A range of tax increases in VAT, a 50 cent increase on a pack of cigarettes and a doubling of the betting tax have allowed Mr Donohoe significantly increase the scope for new spending measures.

An eleventh hour backlash from Fine Gael backbenchers has forced Finance Minister Paschal Donohoe to abandon planned hikes in excise on diesel and alcohol.

Mr Donohoe will deliver the final of three budgets under the 'Confidence and Supply Agreement'.

Mr Donohoe will take to his feet at 1pm tomorrow and will announce:

  • A full return to the 13.5% VAT rate for the hospitality sector;
  • the back to school allowance will increase by €25 while the qualified child allowance payment will increased by €2.20 a week for children under 11 and will go up by €3 for children over 12 years of age.
  • The budget for Housing Assistance Payment (HAP) will increase by €120, but this is largely to meet growing demand.
  • the health budget will increase from €15.2bn to €17.2bn next year;
  • an extra 100,000 free GP cards by increasing the access threshold by €25, €55m for mental health funding and €75m for the NTPF waiting list reform system;
  • a review of the local property tax which will be limited to vulnerable and older people, a situation that means the squeezed middle will lose out on any reforms;
  • A major increase in homelessness funding to address the ongoing housing crisis;
  • A €25 increase of the back to school allowance;
  • A €2.20 a week rise of the qualified child allowance for those under the age of 11 and a €3 rise for those over the age of 12;
  • a 20c increase of the minimum wage, to €9.80;
  • and a "loosening" of means test subsidised support rules for families with children aged between three and 15 in need of financial help, a move that will cost €90m and will take up most of the €130m department's budget rise.

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