Vat reductions for small businesses and changes to carer's allowance to form part of the budget

Reductions in education, health, and childcare costs also planned

Tánaiste Simon Harris has also indicated that he will be strongly pushing for a cut to third-level fees. Picture: Liam McBurney/PA Wire

Vat reductions for small businesses, changes to carer's allowance, as well as reductions in education, health, and childcare costs will all form part of the budget, the Tánaiste has told his party.

Simon Harris has also indicated that he will be strongly pushing for a cut to third-level fees as part the budget, which goes against the view already expressed by higher education minister James Lawless.

Mr Lawless has all but ruled out future cuts to student fees claiming they are “not fair or proportionate” and take hundreds of millions from universities and colleges.

The Fianna Fáil minister told the Irish Examiner in March that universal cuts of €1,000 to the student contribution fee in the last two budgets “may not be the best use of public monies”.

However, referencing the fact that he is a former higher education minister, Mr Harris told a private meeting of the Fine Gael parliamentary party that he believes education costs across all levels should be cut.

While he stressed that no decision has been yet made, Mr Harris indicated that he would like to see student fees reduced, but added that if this happens it may come into force at the slightly later time of January.

Mr Harris said one normal budget will be announced in October, which will be "responsible and responsive", with most of the measures taking effect from early next year. 

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He added that it would be an expansionary package.

One source said a permanent reduction in the Vat rate to 9% for small businesses is now all but "bolted down" after Mr Harris said he and his party colleagues remembered very well what it canvassed on at the last general election.

Mr Harris said childcare fees for many families are like a second mortgage and these costs must be permanently reduced over the lifetime of this Government.

It is understood Senator Seán Kyne told the meeting that many parents have benefited from previous cuts to childcare costs, however, there are many families who either cannot get a creche place or whose provider has not signed up to core funding. 

He asked whether tax measures or other supports would be introduced to take this into account.

Mr Harris acknowledged that some parents cannot avail of the significant state subsidies when it comes to childcare.

The meeting also heard that the revised National Development Plan will come before Cabinet towards the end of July and members should make the case for the inclusion of specific projects as soon as possible. 

However, he said the plan will not contain an exhaustive list of projects.