VIDEO: What to expect from Budget 2016

VIDEO: What to expect from Budget 2016

Irish Examiner political correspondent, Juno McEnroe, looks forward to this afternoon's Budget speeches.

UPDATE (12.51): Retailers Against Smuggling (RAS) has strongly crticised the Government’s decision to raise the price of a packet of cigarettes by 50 cent in today's Budget.

RAS spokesman Benny Gilsenan said that one in five cigarettes consumed in Ireland had no Irish tax paid on them and that this figure would continue to rise due to the Budget measures.

“Due to the excise increase, we have now reached a stage where the price of legitimate products are double that of smuggled cigarettes," he said.

"For most consumers, that’s a no-brainer and they will choose the cheap, illegal products.”

UPDATE (12.26): Sinn Féin president Gerry Adams says this morning’s Budget leaks point to a return of "auction politics".

"We have argued strongly that this Government is engaged in the old, old auction politics," he sighed.

"We put forward alternative Budget proposals, which actually show that in a costed way that we can invest in people, invest in the economy, but particularly invest in the very, very necessary public services."

UPDATE (12.16): Director General of the HSE Tony O’Brien has refused to comment on reports that funding to extend the free GP scheme for children will be provided in today's Budget.

"Despite the fact that we seem to be able to read about most things in the Budget in the papers, I'm going to wait until i hear the Minister for Finance's statement before I hear anything," he said.

UPDATE (10.43am): It has been reported that today's Budget will include funding to extend the Government's free GP-care scheme to include children under 12.

Health Minister Leo Varadkar will have to secure agreement with the Irish Medical Organisation (IMO) to implement the programme, however.

UPDATE (10.03am): Environment Minister Alan Kelly has denied assertions that he had a pre-Budget "battle" with Finance Minister Michael Noonan on the issue of rent certainty - and lost.

"No, I wouldn't say that," he said. "Basically, there will be a lot of positive news in relation to housing, which is a core area in my department."

He said that today's Budget will also include extra funding in the areas of local housing, homelessness, "and a number of other measures as well", including "positive news in relation to the contribution of Nama".

He insisted that "looking at ... a package of measures in relation to the rental market is certainly something that I'm determined to do".

UPDATE (10am): Minister Noonan has said that the Government “has more resources than we anticipated at last Budget day, 12 months ago”.

He said that these will be divided “three ways”.

“We’re using €750m approximately to reduce taxes, principally the USC, we’re using €750m or so to increase expenditure in the areas which need extra expenditure, like health and education and justice and so on, and then we’re using a very big tranche of money to reduce the deficit further,” he said.

UPDATE (9.15am): Public Expenditure Minister Brendan Howlin has played down the apparent failure to agree a package of rent certainty measures ahead of today’s Budget.

It has been widely reported that negotiations between Minister Noonan and Minister Kelly could not be completed.

VIDEO: What to expect from Budget 2016

Minister Howlin claimed that rent control is still a priority for Government, however.

“The Budget is not the end of the journey,” he said. “There will be lots of other policy measures to be implemented before the term of this Government will be out – I’m sure that will be one of them.”

The Taoiseach said: “The Minister for Housing and Environment are obviously looking at a package of measures on the supply side which is the real problem here”, saying that the Government is looking for a solution “without interfering with the market to its disadvantage”.

UPDATE (9.10am): The Taoiseach said this morning that Budget 2016 will bring “relief” to middle income earners.

Enda Kenny says the final Budget of this Government's term was designed to increase the take-home pay of households across the country.

“I think you’ve got a lot of comment about that,” he said.

“We’ve made it perfectly clear that for those from €70,000 down, there will be relief given, and I’ve indicated a couple of months back that we’ll get the tax burden below 50%”.

Ireland’s hard-pressed middle income earners are set to reap modest rewards when the Budget is announced this afternoon.

Only weeks or months from the next General Election the electorate is in line for a softening-up with sources in the coalition Government billing the limited restoration to pay packets as “family friendly”.

The €600m tax reform package will include cuts to the deeply unpopular and burdensome income tax levy, the Universal Social Charge (USC).

It is one of the central planks of Budget 2016.

USC rates will be altered, with the top rate cut by 1.5 percentage points bringing it from 7% to 5.5%; the middle from 3.5% to 3%; and the lower from 1.5% to 1%.

The bands will also be changed slightly as the lowest paid will pay the levy only after earning about €13,000 as opposed to the €12,012 as it currently stands.

This is also being done to help those on the minimum wage which is being increased by 50 cent to €9.15.

On the "old reliables", sources said there would be no increases to excise on wine, beer or spirits but cigarettes are likely to be hiked as the number of smokers in Ireland this year fell below one in five for the first time.

All of the measures will be signed off by Ministers at the meeting which gets underway at 10am before the main speeches this afternoon.

Finance Minister Michael Noonan takes to his feet in the Dáil at 2.15pm, followed by a second speech by Minister for Public Expenditure and Reform Brendan Howlin at about 3pm, to outline how the Government will spend its limited resources.

Other major initiatives on the tax front include new credits for the self-employed which are expected to be worth about €500 a year and which will be built on over the next three years.

Ultimately the plan is to create a tax credit worth about €1,600 for those who want to be their own boss.

A new tax rate for the so-called “knowledge box economy” is also being devised by Mr Noonan.

The Government began initiatives on that front over the last year and they are to be cemented with a 6.5% business tax rate for companies that use Ireland as their base for R&D, spend a significant amount of money on research and register patents for newly created products.

Entrepreneurs and start-up enterprises are to be enticed with a reduced capital gains tax rate while there has also been pressure on the Government to move on inheritance taxes.

On the family front, child benefit will increase by at least €5, as promised.

Free pre-school childcare is also to expanded and an announcement is expected on paternity leave to bring Ireland into line with the UK and other European countries.

Other welfare payments should also improve such as the Christmas bonus for the unemployed and the restoration of some of the carer grant.

These limited giveaways follow years of swingeing austerity and will widely be seen as the Fine Gael-Labour coalition Government’s attempts to get the backing of families and middle Ireland for the election.

Taoiseach Enda Kenny gave his clearest indication at the weekend that he remains focused on going to the polls next Spring.

The light relief will also be seen as way to build on the modest growth in consumer spending which many economists believe is the logical next step in Ireland’s economic revival.

Ireland is already enjoying the fastest growth rates in the EU five years after going bankrupt after the property market collapsed, the banks were saved in a €64bn bailout and the International Monetary Fund and the European Commission oversaw fiscal affairs.

On the jobs front, hundreds of new positions are expected to be cleared for teaching and the Garda, a timely investment in the wake of the murder of Garda Tony Golden at the weekend.

There is also expected to be more detail on a housing fund as the homelessness crisis has deepened over the last year.

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