Noonan prepares to deliver Budget 'without dramas'

Finance Minister Michael Noonan has predicted no dramas as he prepares to unveil his latest Budget.

Working parents, pensioners and house hunters are hoping an estimated €1bn tax and spending package for 2017 will leave them with more cash in their pockets.

It will be the first Budget announced by a minority Government in the Republic's history and, in a sign of that precarious balancing act, negotiations on make-or-break decisions ran down to the wire.

Key to the Budget's success or failure was Mr Noonan's Fine Gael party securing necessary support from the main opposition party Fianna Fail and a collection of independents who share cabinet seats and junior ministries.

But the minister played down any prospect of a last-minute row, adding: "We'll have a Budget that'll go through tomorrow without drama."

One stumbling block appeared to be the timing of a €5 hike to the state pension, with Fine Gael trying to push it out until the middle of next year amid calls for it to be introduced in January, or before April at the very least.

Another contentious issue was an easing to the cost of childcare, but discreet talks over the last month look to have secured agreement on a new system, which might be means tested and paid directly to creches and nurseries.

Another talking point will be any initiative to make it easier for first-time buyers to compete for property in the face of bidding wars and restrictive lending rules.

A scheme to give them a €20,000 rebate has been mooted, while builders will be watching closely for changes in VAT and other incentives to get more houses built as the country suffers under an unprecedented housing shortage a decade since the property bubble burst.

Smokers can expect to be hurt in the pocket again, with cigarettes potentially up 30c a packet, making Ireland second only to Norway for the dearest tobacco in Europe. There have also been suggestions that excise will be hiked on the cheaper brands.

Booze went untouched last year and, with tax on wine among the highest in Europe, drinkers will be hoping Mr Noonan takes the same approach again for the next 12 months.

Duty on diesel is also expected to be increased amid growing demand for diesel motors in recent years and concerns over the health implications from the increased emissions.

A sugar tax has been on the long finger for some time and the Government may be keen to set a date for its introduction.

Overall, about €1.2bn has been set aside for tax cuts and spending increases. Around two-thirds of this figure will be spent on measures to improve welfare, allowances for the most vulnerable, health, education, justice and housing.

Elsewhere, questions remain over whether the children's allowance will increase, if the Government will adopt calls for the minimum wage to become a living wage, and how ministers will handle changes to inheritance tax thresholds.

Details are expected on other initiatives, including how Mr Noonan proposes to close tax avoidance loopholes being used by vulture funds, and what measures are being taken to Brexit-proof the Irish economy.

Workers will be on the lookout for any changes to the deeply unpopular and burdensome income tax levy, called the Universal Social Charge, which was introduced originally to meet the cost of bailing out the banks and the state's finances during the recession.

Last October, steps were take to exempt about 42,500 lower-paid workers from the levy, and Mr Noonan may extend this over the coming year.

But it will be the hard-pressed middle - couples, families and other earners who fall into the bracket of earning less than €70,000 - who will be looking out for any small payback.

Mr Noonan will deliver his Budget in the Dáil at lunchtime, then his finance colleague Paschal Donohoe, the Minister for Public Expenditure and Reform, will outline how the minority Government will spend its limited resources.