By Cillian Ryan
Minister for Finance Michael Noonan opened his sixth budget on Monday saying that the “economy is in great shape”.
The Limerick TD projected that the budget should be in surplus by 2018, at which point there will be “rainy day fund” of a billion annually set aside to help shield Ireland from turbulent international economic circumstances.
The Minister said that while the budget did increase public expenditure by €1.9bn and included €500m in tax cuts, it was very cautious to “keep faith with the prudent budgets of the last five years”.
Mr Noonan’s €1.3bn budget proposal also aims to get an additional 43000 people back working within the same time frame, including 2500 new teachers, 900 of whom will be resource teachers, and 800 new Gardai to be hired and trained by next year.
The promised USC cuts on all three lowest tiers were delivered upon, in addition to a five percent increase in jobseekers allowance and the social pension, to come into effect next March.
Further changes in the Social Welfare Department included an 85 percent Christmas bonus for social welfare recipients, in addition to a ten cent increase for minimum wage.
In response to the crisis in the property market, several measures were introduced today, including upping the housing department’s budget by 220 percent and the introduction of ‘help to buy’ scheme.
The scheme is aimed at helping first time buyers enter the property market by providing a tax rebate on the deposit of any newly built house.
€ 2.8m was also allocated to provide emergency housing for homeless families.
The capital acquisition tax (commonly known as the inheritance tax) saw a huge cut, with category A (anything willed to a child by a parent) being exempted on anything under the value of €31,000.
The self-employed also saw benefits from this year’s budget, with the earned income tax credit being raised to €950.
Minister for Public Expenditure Paschal Donohoe said that many did not foresee the current government lasting long enough to deliver its first budget, before saying “here we are”.
Limerick TD, Willie O’Dea echoed this sentiment, in particular praising the €5 pension increase, which he claims was partly brought about by Fianna Fail’s involvement in drawing up the budget.