Kieran Coughlan: What the Budget leaks so far mean for Ireland's farmers
There may be some sparing for motorists should the government hold off on re-instating the full amount of excise on petrol and diesel.
There’s one for everyone in the audience. No, I’m not referring to Patrick Kielty carrying the baton of traditions of The Late Late Show, rather I’m referring to the giveaway budget set for October in a little over two weeks’ time.
Over the past few weeks, there have been more leaks than Irish Water has had to contend with. If one were to go off the rumours, the Budget will take the following shape. There will be some cuts to the dreaded Universal Social Charge along with a widening of the lower rate tax band meaning the hard-pressed middle class will suffer a little less taxes at the top rate in 2024.
Farmers will see major tax reliefs extended. Renters will benefit from an increased tax credit, and landlords will see a token reduction in taxes payable either on the income tax from or perhaps a reduced capital gains tax regime should they stick in the market for the medium to long term. An expansion of the universal childcare subsidy, and a repeat of the energy subsidy granted to households, albeit at a reduced level.
There may be some sparing for motorists should the government hold off on re-instating the full amount of excise on petrol and diesel, albeit the carbon tax on the other hydrocarbons will probably increase again from May of next year. It’s undeniable that the economy is going well but looking a little closer there are definitely fissures and I’m not sure that this year's Budget will be radical enough to address these issues.
Sure many of the problems are associated with an economy going full tilt coupled with an expanding population along with a rapid increase in those needing emergency accommodation fleeing from Ukraine.
Some of the problems are long-standing and seem intractable such as the lack of supply of housing. With house prices having surpassed the Celtic Tiger boom, a time when we as a nation were constructing 90,000 houses per year, supply still seems to be lacklustre. The issues around planning, the cost of construction and the sourcing of labour are the constraints affecting supply.
Sure there has been a great scheme to help would-be buyers such as the help-to-buy scheme and the home renovation scheme. However, little innovation has been proffered on the supply side, particularly to encourage an uplift in those employed in the sector.
Incentives such as Nil employers PRSI, a double deduction for apprenticeship wages or a tax credit scheme to encourage employees to consider construction as a career could encourage an expansion of the construction sector which in turn would result in an uplift in supply and a reduction in the costs of developing projects.
This isn’t something that we haven’t used before. Double deductions for wages were available historically for employers taking on staff who were coming out of long-term unemployment. Nurses and other qualified healthcare professionals, many of whom emigrate, should be encouraged by way of tax incentives to stick it out in the Irish health sector for a minimum period after their qualification.
In any organisation, the more one loses quality staff the less attractive it becomes for those who remain leading to a spiral of exodus of talent. Similarly, there seem to be issues with recruitment for An Garda Siochana.
Tax credits already exist for certain industries, such as the fishers tax credit and seafarers tax credit, and to some extent, the old “flat-rate” expense allowance was a means of granting some sectors in society a little extra grace. When sectors of society are dysfunctional it is the responsibility of governments to restore functionality and the tax system is a great way of doing this quickly and efficiently.
On the farming front, farmers are reeling from a bad year, bad weather and high tax bills coming off the back of 2022, but possibly the biggest issue facing farmers is the lack of confidence in the future of farming with additional constraints being heaped on farmers at what seems like an accelerating pace.
We can deal with the weather; we can deal with the vagaries of the markets; but we can’t deal with the carpet being pulled out from under us. It’ll take more than this year's Budget announcements to fix this issue for farmers.
