Leo’s vote grab
Varadkar, Martin talk amid election speculation Increases in childcare, health and housing spend €5 weekly boost with welfare hikes and tax cuts
MINISTERS were last night speculating on a general election date after Budget 2019, which aimed to give something to everybody in the country.
Finance Minister Paschal Donohoe sought to target families with measures to reduce the cost of health and childcare.
Within hours of the Budget, Fianna Fáil leader Micheál Martin phoned Taoiseach Leo Varadkar to discuss the confidence and supply arrangement.
Formal talks on a potential renewal of the deal will take place in the coming weeks – but senior sources on both sides were speculating an election could take place as soon as December 7.
The Budget included a €5 weekly boost for workers and social welfare recipients. This will be funded by a VAT hike for hoteliers and restaurateurs, who angrily called on Tourism Minister Shane Ross to resign.
Mr Donohoe denied that his Budget was formulated with one eye on a general election.
He said his primary concern was to raise people’s standard of living.
Asked by the Irish Independent whether he had spread €1.5bn too thinly, the minister replied: “For those who say I have done too little, I say back ‘are they advocating I do nothing at all?’ That’s not tenable with the kind of growth in wages we’ve seen this year.
“If they are not happy with that then are they saying they want the kind of tax policies we’ve seen in the past? I’m not going to do that either, because that played a big role in our economy blowing up.”
Aside from the tax and social welfare benefits announced, households were spared an increase in carbon tax.
It was expected that home and motoring fuel bills would have gone up by about €200 a year, but Mr Donohoe backed away from the idea amid fears of a rural backlash.
Environmentalists were livid that a chance to tackle our emissions was missed.
Overall, families with one spouse caring in the home were the big winners.
The home carer’s credit will go up to €1,500, benefiting 80,000 families who can earn an extra €300 a year before they pay tax.
A single worker will be able to earn €35,300 next year before paying income tax at 40pc, up from €34,550. The 4.75pc universal social charge (USC) rate falls to 4.5pc.
When combined these measures will be worth €5 a week to somebody on a salary of €55,000.
Some 1.47 million people will benefit from the €5 increase in social welfare payments, including pensions, that take effect from March.
Two weeks of paid parental leave will be available from November 2019.
The Affordable Childcare Scheme will see an increase
Scheme will see an increase in the maximum income threshold. It will go up from €47,000 to €60,000 after tax.
Those in the Drugs Payment Scheme will have to spend €124 before the State picks up the rest of the tab, down from €134, while there is be a 50c drop in prescription charges to €1.50 for medical card holders over the age of 70.
Parents will be able to leave €320,000 to children before having to pay inheritance tax, up from €310,000.
Some 150,000 self-employed workers will also gain as the earned income credit will be increased by €200 to €1,350.
Cigarettes went up 50c at midnight, taking the average pack of 20 to €12.70.
Although it was pitched as having a major focus on the housing crisis, Opposition TDs alleged Mr Donohoe’s measures amounted to a “landlord’s budget”.
Some €2.3bn has been set aside for housing, with a focus on ramping-up delivery of social and affordable homes.
Aside from tax breaks for landlords, key measures include a €1.25bn package to deliver 10,000 local authority units; €60m to provide emergency homeless accommodation; and a €310m affordable housing scheme aimed at couples earning up to €75,000 a year.
The Budget must now work its way through the Dáil and Seanad, a process that should take until at least the end of November. Sources indicated this could be fast-tracked if a fresh deal between Fine Gael and Fianna Fáil cannot be agreed.
Taoiseach Leo Varadkar suggested he would like a new arrangement in place within three weeks – but Fianna Fáil sources told the Irish Independent they are in “no panic”. A date closer to Christmas has been suggested.
No major developments are expected before Mr Varadkar attends a crucial EU summit on Brexit next week.
One theory circulating in Fine Gael is that once another Brexit summit in mid-November has concluded, Mr Varadkar could call an election for December 7. This would coincide with the Christmas bonus payment announced yesterday.