€2.5m adjustment announced in Budget 2014

Tuesday 15 October 2013 17.52
Michael Noonan (left) and Brendan Howlin have revealed the details of Budget 2014
Michael Noonan (left) and Brendan Howlin have revealed the details of Budget 2014

Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin have delivered Budget 2014 in the Dáil where €2.5bn worth of spending cuts and tax increases were announced.

Mr Noonan said that the sacrifices people have had to make in recent years are well known and the help from the IMF and the European authorities came at a high price.

He said the purpose of the Budget is to continue the progress made, to reinforce policies that grow the economy and to establish the conditions which will create jobs.

Minister Noonan stated that the Government will bring in a deficit of 4.8% in 2014, while it also wants a small primary surplus. He said this will demonstrate that Ireland's national debt, which has been rising for so many years, is under control.

He added that one of the primary tasks of the Budget is to lay down the conditions for a successful exit from the bailout programme at the end of the year, adding:

"We're well on our way to doing this."

KEY POINTS

- Home renovation tax incentive scheme to be introduced

- Corporation tax rate remains at 12.5%

- 10c increase on 20 cigarettes

- 10c on pint of beer, 50c on 75cl bottle of wine

- New Start Your Own Business scheme

- No increase in pupil-teacher ratio in free schools

- 9% VAT rate in tourism sector to continue

- No increase in income tax, USC in 2014.

- DIRT rises to 41%

- Rise in prescription charges from €1.50 to €2.50

- Free GP care for children aged 5 years and under

- €8.7billion is being allocated to the education sector

- Provision is being made for the recruitment of over 1250 new classroom and resource teachers for the school system

- A new garda recruitment programme is to begin next year

In total, €700m in new tax measures for next year were announced by Mr Noonan.

They include €150m banking levy, a new 41% higher single rate for DIRT on savings.

The 9% VAT rate for the tourism and hospitality sectors is to be maintained, while the air travel tax is gone from 1 April.

The 6% pension levy introduced to fund a jobs initiative is to be abolished from the end of 2014 but an additional 15% levy on pension funds is being introduced.

Turning to the old reliables, from midnight 10 cent is going on a packet of 20 cigarettes, while excise duty on a pint of beer, cider and a standard measure of spirits is up by 10 cent and 50 cent is going on a bottle of wine.

Mr Noonan also announced the introduction of 25 pro-business and pro-jobs measures totalling €500m in a full year including a home renovation incentive tax scheme.

Minister Brendan Howlin in turn announced 1.6bn in expenditure measures.

€200m from the Lottery sale will be spent on road maintenance, sports capital funding, cultural and tourism projects. That funding will also cover expenditure on some social housing.

Free GP care for under 5s was also announced. However €113m in savings will be made as a result of a review of all medical cards and the eligibility threshold for medical cards for the over 70s is to be lowered.

Lower unemployment benefits for new claimants who are under 26 years of age and the scrapping of the telephone package for older people were also confirmed while maternity benefit will be standardised for new claimants from January 2014

Mr Howlin also revealed the recruitment of classroom and resource teachers and a new garda recruitment programme is to begin next year.