Country emerging from worst of crisis - Noonan

Wednesday 05 December 2012 18.30
1 of 2
€3.5 billion of measures revealed in Budget 2013
€3.5 billion of measures revealed in Budget 2013
Finance Minister says country's efforts are leading to success
Finance Minister says country's efforts are leading to success

Finance Minister Michael Noonan has said there are manifest signs that the country is emerging from the worst of the crisis and the efforts of the Irish people are leading to success.

Delivering Budget 2013, the Minister said that the country must get back to the markets at sustainable rates.

He said that the NTMA has secured access for some of the country's funding this year but we must be certain of market access as needed.

He repeated that the Government is committed to the task of making sure that Ireland is a country where everyone who wants to work has a job and where our public services are unsurpassed in their quality.

''We will not dither or procrastinate but will drive forward to lead this country out of the despair and despondency and lack of self worth in which we found ourselves in March 2011,'' the Minister said.

Mr Noonan said that the Government will continue to fulfil the conditions of the bail out programme and will carefully plan a full market return. He said they will also build on the strong sectors of the economy and repair the weak sectors until they are strong again.

Tax reform plan for SMEs

Introducing a 10 points tax reform plan for SMEs, the Finance Minister said he is aware that the operating environment in the domestic economy remains difficult.

He said he would reform the three year corporation tax relief for start-up firms to allow unused credits to be carried forward. He said this would help SMEs and start-ups ''navigate their early years''. Under the plan, the cash receipts basis threshold for VAT will be increased from €1m to €1.25m.

The R&D tax credit will be amended by doubling the initial spend eligible for the credit from €100,000 to €200,000 to encourage innovation and business expansion.

''Given the fragile state of the public finances, the individual measures are modest. However, I believe that the combination of the measures will have a significant beneficial impact,'' he said.

The Minister also unveiled a number of credit specific initiatives for the SME sector. These include extending the Credit Review Office so that SMEs seeking assistance receive a ''considered and timely response to their application''.

The National Pensions Reserve Fund is also developing a range of support funds to provide equity, finance and restructuring and recovery investment to the SME sector. The funds are expected to range from €100-400m, Mr Noonan said.

In order to boost the competitiveness of the haulage industry, Mr Noonan said he would introduce a rebate on diesel from July, 2013. ''This policy will be strictly policed so as to ensure that the beneficiaries are fully tax compliant,'' he added.

PRSI base to be broadened

Finance Minister Michael Noonan said that in order to ensure the stability of the Social Insurance Fund, there is a need to broaden the PRSI base.

To this end, he said the the minimum level of annual contribution from the self employed will rise from €253 to €500 while the weekly allowance for employees will be scrapped.

He said the Minister for Social Protection Joan Burton will also bring forward legislation to change PRSI contributions. This will apply in cases where modified PRSI rate payers have income from a trade or profession and such income will be made subject to PRSI from next year.

From 2013, PRSI will also be payable on income generated from wealth such as rental income, investment income, dividends and interest on deposits and savings.