Business News

Donohoe says absolutely no surprises in Budget 2020

Donohoe says absolutely no surprises in Budget 2020

The Minister for Finance has said there will be “absolutely no surprises” in the Budget to be outlined this afternoon.

Speaking as he arrived at the Department of Finance this morning, Paschal Donohoe said all of the main features of Budget 2020 are well known.

He said this was “a particularly challenging budget” because of the need to make some changes before Brexit.

Minister Donohoe also said the expenditure measures that will be announced are broadly in line with what he had expected.

A range of measures aimed at helping the sectors most at risk from a hard Brexit will be included in Budget 2020.

Other measures are expected to include spending increases in healthcare and social welfare, as well as an increase in the carbon tax.

The Budget had been expected to be a package worth €2.8bn, but it is understood that the increase in carbon tax and changes to other taxes, such as the dividend withholding tax, could push it closer to €3bn.

Minister Donohoe concluded his discussions last night with a Fianna Fáil delegation, following talks with the Independent Alliance on its key concerns.

It is understood that some of both parties’ key budgetary demands were met.

An expansion in the medical card scheme for the over 70s and other health and social welfare spending increases are expected.

However, changes in personal taxation beyond adjustments for increases in the minimum wage are unlikely.

In a new development, the Government will also produce a citizen’s guide to the Budget for the first time.

Mr Donohoe is expected to outline details of a contingency fund of €650m that it will have on standby to help prop up sections of the economy most exposed in a crash-out Brexit scenario.

It will also spell out the timelines within which such funding will be made available.

It is understood that Minister for Business Heather Humphreys has secured agreement for a number of schemes and initiatives designed to support vulnerable but viable firms at particular risk from the UK exiting the EU without an agreement.

These would be activated on day one of a no-deal Brexit and the money behind them would become available to qualifying companies immediately.

The schemes include, for example, a new €45m Transition Fund that would be used to support businesses in the manufacturing and internationally traded services sector that need to adapt their business model and adjust their trading arrangements.

It will see supports of between €200,000 and €1m being made available to small or medium-sized firms with ten or more employees.

The funding will be offered either through a grant, loan or equity investment, depending on which is most appropriate.

It is also expected that a range of others schemes will be offered to further vulnerable sectors by other departments in the event of a no-deal Brexit, including in the areas of agriculture and tourism.

The Department of Social Protection looks set to receive additional funding to help with an expected increase in the numbers unemployed in such a scenario.

If there is a hard Brexit, the Exchequer is expected to move into a deficit of between 0.5% and 1.5% of GDP next year.

Some of this will be accounted for by spending on these Brexit mitigation measures. However, the contingency fund will only be used if there is a hard Brexit.

Additional financial assistance is also expected from the European Commission. Yesterday, Ibec said €1.5bn would be required over three years to assist companies most at risk from Brexit.

The discussions on Budget 2020 concluded just before 9pm last night, after more than an hour of talks between Minister Donohoe and a senior Fianna Fáil delegation, led by its finance spokesman Michael McGrath.

RTÉ News understands that some of Fianna Fáil’s key budgetary demands were met, including the recruitment of hundreds of additional gardaí.

It is believed Fianna Fáil has secured one million additional home support hours, at a cost of €45m, and a €25m boost in the budget for the National Treatment Purchase Fund.

One other concern, an increase in staff focused on special needs education, was also signed-off.

Earlier, representatives from the Independence Alliance held talks with the minister and it was agreed that thousands of additional people over 70 would become eligible for a medical card by increasing thresholds.

Article Source: Click here

< Back to Business News