Budget 18 set to focus on childcare, housing and tax cuts

The extension of free childcare services to thousands of toddlers, tax and USC cuts, across the board welfare rises, €5-10 more back in the pocket of most households and a new housing agency to kick-start property development will form the basis of the Government's budget announcements this afternoon.

Finance Minister Paschal Donohoe is set to reveal the widely flagged measures in the Dáil at 1pm today as part of a financial package he and Taoiseach Leo Varadkar hope will spread the small amount of money available the widest.

As revealed in this morning's Irish Examiner, a key part of the budget will be the extension of the free pre-school year to all three- and four-year-olds amid concerns more toddlers are missing out of the service than being able to access it.

The move will help bring down creche costs for hard-pressed families and is expected to cost €30m.

Welfare increases agreed with Fianna Fáil last night will be introduced from the end of March and involve what has been described by both Fine Gael and Fianna Fáil sources as "modest" rises across the board.

This means that €4-5 increases can be expected for pensioners from mid-spring alongside an increase to the Christmas bonus and possible return of the bereavement grant, while welfare claimants and lone parents are also due to be given €2.50c more in the qualified child payment - bringing the rate to €32.30c per week for a child.

As has been widely expected, the budget will also include a rise in the threshold for when someone starts paying the highest rate of income tax, and a marginal cut in the two highest bands of USC, which will be merged with PRSI.

Other tax changes will include a sugar tax, a further drop in DIRT tax by 2%, a 50c increase in the price of cigarettes, and the retention of the special tourism VAT rate of 9% for hotels.

Among the most high-profile changes, however, will be the creation of a new national homes agency which will be given wide-ranging powers to take over Nama lands and building projects - helping to kick-start property development.

While the help to buy scheme is likely to only be slightly changed, Government will also invest a further €149m for the housing assistance payment scheme and controversially provide cheap loans to developers to encourage them to build homes and apartments.

Speaking as they went into cabinet this morning, both Taoiseach Leo Varadkar and Finance Minister Paschal Donohoe said the budget will be focused on balancing the country's finances while also helping to give money back to those in need.

See www.irishexaminer.com, the Twitter hashtags #iestaff and #budget18, and the Twitter handles of the @irishexaminer political editor Daniel McConnell @mcconnelldaniel, political correspondents Fiachra Ó Cionnaith @ocionnaith and Juno McEnroe @junomaco and political reporter Elaine Loughlin @elaine_loughlin for updates throughout the day.


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