Budget 2015: Win some, Lose some

Michael Noonan entered the Dáil chamber yesterday afternoon sporting a bright purple tie to give his fourth budget speech. Budget 15 marked the first time since 2008 that anyone listened with a sense of optimism as the annual rumour mill had already leaked that this was to be the first of three giveaway budgets.

Minister Noonan began by stating firmly that the 12.5% corporation tax rate was to stay and that the current scheme for start up companies would be extended further. The Double Irish arrangement for non tax resident companies is to be abolished for new companies from January 2015 and for existing companies in January 2020.

A number of incentives around the area of farming were announced including additional CAT and leasing relief and an extension of income averaging. An agri taxation review was also published.

The giveaways continued with a commitment to abolish all pension levies by 2015. The tourism related reduced VAT rate of 9% was maintained.

In an effort to appease some of the hardship of first time buyers since the announcement that a 20% deposit was required for all mortgages from January 2015, a rebate on DIRT deducted on savings for first time buyers was announced.

In another appeal to the masses, some relief was announced in relation to water charges. A tax credit of 20% in the year after payment is to be provided on water charges of up to €500, resulting in a maximum relief of €100.

The burden on lower to middle income earners was eased somewhat by the news that changes to the universal social charge; the marginal rate of tax and the lower rate cut off point were all to be altered to the benefit of the worker. Altogether a single person earning €40,000 per year could expect to receive an additional €446 per annum in their pay packet.

These taxation measures, alleviated somewhat by 40c on a packet of 20 cigarettes, are to cost the state an additional €585m.

Minister Howlin then stepped forward to announce that a 25% Christmas bonus for those in receipt of social welfare is to be introduced alongside a €5 per child increase in child benefit. 1,700 new teacher and SNA posts were introduced.

Unfortunately, much if not all of the above gains for workers are to be undone by the official introduction of water charges. The budget was commended to the house to rapturous applause from back bench government TD’s and the now obligatory heckles from the opposition benches.

Hopefully, Ireland has turned a corner.

Follow the link for full details of the budget summary.