Budget 2018 Q&A: This will be a balanced affair that will give some helpful benefits to voters

Fiachra Ó Cionnaith looks at who the winners and losers of Budget 2018 are likely to be. 

Q: What can we expect in the budget?

A: After weeks of kite-flying and more than a few bum steers, Finance Minister Paschal Donohoe will finally publish his budget 2018 plans at 1pm this afternoon.

While staying within the €350m fiscal space remains the priority, tax and USC cuts, €650m worth of new taxes, adapting Nama to kickstart house building, across the board welfare increases, and an extension of free childcare are expected.

Q: Who are the winners?

A: Income tax cuts, USC reductions, welfare rises for pensioners, lone parents and those on the dole, and the extension of free childcare for thousands of toddlers mean much emphasis will be put on claiming hard-pressed households are the big winners.

However, this is still a Fine Gael budget, and that means doctors and developers will hardly be unhappy either.

This will be particularly true for doctors pleased with the sugar tax introduction and rise in cigarette costs for the eleventh year running; and developers given fresh house-building incentives.

Nama is likely to be given an extra remit to help developers — a move which will needle those who have struggled ever since the 2008 property crash.

Q: And who are the big losers?

A: A planned vacant housing tax — due to be flagged in the budget and introduced at a later stage — will hardly lead to a positive response from those hoarding properties to take full advantage of the market.

Equally, the sugar and cigarette industries will also be irate at news of the new tax and price hikes for their products.

However, the most interesting losers will be companies which are likely to be hit with an increase in stamp duty when they sell commercial properties.

Q: What does this mean for the public?

A: Regardless of your circumstances, budget 2018 is likely to lead to a small increase in the majority of household’s incomes over the coming 12 months.

However, while an extra €5 per week in your pocket is always welcome, a number of advocacy groups have underlined the fact this will do little if services fail to be improved or the housing crisis is not addressed.

Q: What does this mean for the Government?

A: In keeping with Paschal Donohoe’s approach, this will be a balanced budget. And in political terms, this means giving some helpful benefits to voters while ensuring no one will be able to throw their toys out of the pram, just yet. Leave that for budget 2019.