Government finalising Budget 2013 details

Tuesday 04 December 2012 11.31
Govt ministers have denied that there were divisions between the Coalition parties over Budget plans
Govt ministers have denied that there were divisions between the Coalition parties over Budget plans

Work on finalising Budget 2013 will continue over the next two days, following agreement at the weekend between the Coalition parties on the main details.

The scale of the adjustments has been broadly dictated by the Troika, but most of the choices have been made by the Government.

With €3.5bn to be cut, ministers decided economic competitiveness would be best protected by a ratio of 2:1 between spending cuts and revenue generation.

Six months into office, Taoiseach Enda Kenny and Tánaiste Eamon Gilmore pledged not to touch basic tax or social welfare rates, so there is limited room for manoeuvre and tough choices will be inevitable.

However, with €500m to be cut from the Social Protection budget, there is bound to be changes in social welfare eligibility and benefits.

There will be a property tax of around 0.2% of value, with speculation about a so called "mansion tax" at a higher rate.

Child benefit is set to be cut by €10, and motor tax could increase by 15%.

PRSI will be extended to so-called unearned income, such as rent, and the threshold for the payment is set to drop.

The coalition partners insist discussions have been cordial. Fianna Fáil, however, said a coherent budgetary strategy is unlikely.

Reports of the new "mansion tax" for homes valued at more than €1 million have been dismissed by Sinn Féin as a "gimmick".

Sinn Féin's Mary Lou McDonald claimed the tax had been introduced to spare Labour's blushes, and she called for a fair and equitable Budget.

Minister for Finance Michael Noonan will begin delivering his Budget speech in the Dáil at 2.30pm on Wednesday.