What we can expect in Budget 2020

Finance Minister Paschal Donohoe, who has confirmed that he will prepare the State's budget for a no-deal Brexit. (Cate McCurry/PA Wire)
Finance Minister Paschal Donohoe, who has confirmed that he will prepare the State's budget for a no-deal Brexit. (Cate McCurry/PA Wire)

Budget 2020 will be a "safe" and "careful" with targeted supports to help counteract the impact of a no-deal Brexit Finance Minister Paschal Donohoe has said. Here is what we know so far about next month's budget:

BREXIT MEASURES

What we can expect in Budget 2020

The Government has now decided to focus on a budget which assumes Britain will crash out of the EU without a deal.

Mr Donohoe will use whatever flexibility he has to ensure resources are in place " to help our country get ready for a shock that may occur as we approach the end of October, or in a number of other scenarios that could occur across 2020".

While Mr Donohoe's hands have been tied to a certain extent, Brexit measures will be prioritised.

"There will be things that many people would want me to do that indeed and other circumstances I would like to do that I will not be doing. I will be using the benefits of those decisions to then lay out how we will form the kinds of supports that will be needed to to give interventions into our economy if we have to deal with a no deal Brexit."

CARBON TAX

What we can expect in Budget 2020

While Mr Donohoe did not go into the detail of carbon tax, the Government has long flagged the fact that they intend to increase the tax by €10. Fianna Fáil have gone into pre-budget negotiations calling for a more modest increase, but this is unlikely to change.

TAX CUTS

What we can expect in Budget 2020

Bad news for workers expecting a reduction in the amount of USC they pay or those who were expecting changes to income tax bands next month.

Reductions in personal taxes have been firmly ruled out and any tax changes in other areas will be "minimal".

"I have seen from our not too recent history, what happens if you make a set of taxation and social welfare decisions that we find out three months later the country cannot afford, I see the huge difficulty involved then in undoing them and it just prolongs the period of adjustment that is then needed," Mr Donohoe warned.

CAPITAL PROJECTS

What we can expect in Budget 2020

Promises to increase capital spending will be honoured meaning an already flagged extra €900m for capital projects will be made available next year.

"This is exactly the point in time in which we would want to be increasing capital investments. If we do get into dealing with a no deal Brexit, I want to be going ahead public projects.

"I want to be co-funding private projects that will be employing people who otherwise might be a risk and that will be bringing work into parts of our country that might be particularly affected by a no-deal Brexit," Mr Donohoe said.

SOCIAL WELFARE

What we can expect in Budget 2020

Increases to universal social welfare payments, such as an extra €5 for pensioners or are unlikely to feature in next month's budget.

While Mr Donohoe will have some wriggle-room when it comes to social welfare payments, he has made it clear that any changes will be targeted towards the most vulnerable.

PUBLIC SECTOR

What we can expect in Budget 2020

With an aging demographic and a population explosion at the other end of the spectrum, additional teachers and health care workers will be required just to maintain pupil teacher ratios and standards in our hospitals.

Mr Donohoe has said Budget 2020 will make enough resources available to ensure we have the teachers and nurses that we need to respond to changing demographics.

"It's also a budget that will ensure that the commitments that we have in different parts of our country and our economy, including to our public servants, that those needs can be met," he said, referring to already agreed public sector pay increases.

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