Conor O’Brien, Partner and Head of Tax and Legal Services, KPMG in Ireland:
“This budget is cautious and prudent in its approach – no new personal taxes, some modest USC relief on the first c €70,000 of income and efforts to improve access to housing.
“While a halving of the CGT rate applicable to qualifying disposals by entrepreneurs to 10% is to be welcomed, there will be some disappointment that an opportunity has been lost to make Ireland more attractive to entrepreneurs particularly in relation to the relatively low €1m limit that applies to such gains when compared to STG£10m in the UK.”
Jim Clery, Head of Real Estate, KPMG in Ireland:
“The key measure is the Help to Buy scheme, which we hope will assist first time buyers raise the necessary deposit to acquire their first home.
“It is highly targeted at first time, new build, owner occupiers with 80%+ mortgages. We think it should help supply to increase.
Alan McQuaid, Merrion Economics:
“The fiscal package contained much anticipated spending increases and tax cuts. There were no great surprises in Tuesday’s announcement as a lot of the details were leaked to the media in advance.
“The Minister for Finance Michael Noonan delivered some positive income-tax adjustments for hard-pressed workers, which should boost consumer spending in 2017 and limit the damage to GDP growth from “Brexit”.
“The centre-piece of the tax changes was a half percentage point cut in the three lowest Universal Social Charge rates. However, the main thrust of the fiscal package was spending increases in the key Departments of Health, Education and Social Welfare.”
Davy:
“Budget 2017 measures were broadly as expected – a €1.3 billion giveaway, split 3:1 in favour of spending rises over tax cuts.
“The deficit is expected to fall to 0.9% of GDP in 2016 and 0.4% in 2017, with the debt/GDP ratio likely to decline to 76% by end-2016.
“The new Help-to-Buy scheme will provide a 5% tax rebate on the purchase price of newly built homes, worth up to €20,000 on homes capped at €600,000.
“Another positive for the housing market is an increase in mortgage interest deductibility on buy-to-let lending from 75% currently to 100%.”
Philip O’Sullivan, Chief Economist Investec Ireland:
“This is the third successive expansionary Budget for Ireland. Given that the country is sitting at the top of the EU growth charts (we currently forecast that GDP will expand by 4.8% this year and by 3.5% in 2017, the Department of Finance (DoF) projects growth of 4.2% and 3.5% respectively), at first glance the case for such a fiscal approach appears weak.
“However, given the risks to growth are tilted firmly to the downside (chiefly due to the deteriorating external environment), now is probably not the time to be tightening policy.
“A major focus of today’s Budget relates to measures to bolster activity in the housing market. The main one of these relates to a new ‘Help to Buy’ scheme, which takes the form of an income tax rebate.
“Given the surge in prices and rents in recent years (a function of a chronic lack of supply), we are not persuaded by the economic case for measures to stoke demand.
Kathrin Muehlbronner, Senior Vice President and Lead Sovereign Analyst for Ireland at Moody’s:
“Ireland’s 2017 budget is broadly in line with our expectations as the government’s growth assumptions are cautious, with real GDP growth forecast similar to ours at 3.5% for next year.
“While the combined amount of tax cuts and spending increases is higher at €1.3 billion than the €1 billion muted in Ireland’s Summer Economic Statement, the budget deficit remains on a clearly decreasing trend.
“We consider the deficit and debt projections realistic, with our forecasts closely in line with the Government’s in today’s budget.
“However, our key concerns with regards to Ireland’s credit fundamentals remain unchanged. The economy’s high level of volatility due to the openness and large presence of multinational corporations implies that Ireland needs larger fiscal and financial buffers to deal with economic shocks than most of its peers.”
