Pre­scrip­tion charge cut of €5 is planned for the Bud­get

The Irish Mail on Sunday - - NEWS - By John Lee PO­LIT­I­CAL ED­I­TOR john.lee@mailon­sun­

PRE­SCRIP­TION charges for med­i­cal card hold­ers un­der 70 are to be cut by €5 a month in Tues­day’s bud­get.

A hous­ing agency that lends funds to con­struc­tion com­pa­nies to build houses will be another ma­jor fea­ture, along with a freeze in al­co­hol taxes and in­come tax cuts.

Fi­nance Min­is­ter Paschal Dono­hoe will also an­nounce a huge cap­i­tal ex­pen­di­ture plan that will con­cen­trate on the con­struc­tion of hous­ing, roads and schools, the Ir­ish Mail on Sun­day has learned.

Cab­i­net sources last night

An ex­tra €700m has been found to spend

said that due to rev­enue-rais­ing mea­sures, about €700m ex­tra has been found to spend.

This will bring the Gov­ern­ment to­tal purse for ad­di­tional cur­rent spend­ing and tax cuts to €1bn.

Sources at the Depart­ment of Health said Health Min­is­ter Si­mon Har­ris would re­ceive a greater al­lo­ca­tion than ex­pected.

The Health Min­is­ter, it is un­der­stood, has agreed with the Fi­nance Min­is­ter to re­duce pre­scrip­tion charges for med­i­cal card hold­ers un­der the age of 70 by 50c. Last year, pre­scrip­tion charges for the over 70s were cut by the same amount.

‘At the mo­ment you pay €25 a month max­i­mum if you’re un­der 70, and this would bring it to €20 a month max­i­mum. So it will save you €60 a year on pre­scrip­tion charges,’ a Depart­ment of Health source said. The ex­tra €700m will also al­low the Gov­ern­ment to pay the so­cial wel­fare Christ­mas bonus out of this year’s rev­enue streams. Last year the Gov­ern­ment paid 80% of the pre-crash Christ­mas bonus.

There will be at least €5 in­crease on the old-age pen­sion and that may be repli­cated across all wel­fare pay­ments.

Al­co­hol duty will not be in­creased, ac­cord­ing to source at the Depart­ment of Fi­nance, and in­creases in the tax on a packet of cig­a­rettes will not be as sub­stan­tial as in the past.

A su­gar tax will also be in­tro­duced but is un­likely to come into force un­til April.

A €300m tax pack­age is yet to be fully agreed be­tween the Gov­ern­ment and Fianna Fáil. But it is all but agreed that there will be an in­crease in the thresh­old at which peo­ple en­ter the top in­come-tax band. It will rise by at least €1,000 from €33,800.

Much of the ad­di­tional rev­enue will come from a sub­stan­tial in­crease in stamp duty on com­mer­cial build­ings. A one per­cent­age point in­crease would bring in al­most €100m, and it is ex­pected to rise by sev­eral points.

Mea­sures to tackle the hous­ing cri­sis will form a ma­jor part of the Bud­get day speech. The Gov­ern­ment is ex­pected to in­crease next year’s hous­ing fund by €400m. Fund­ing for such cap­i­tal ex­pen­di­ture is not classed as part of the €1bn in day-to-day spend­ing.

A new agency is ex­pected to take charge of fi­nance for hous­ing con­struc­tion but will draw on Nama’s ex­per­tise.

Cab­i­net sources said last night that In­de­pen­dent Al­liance Min­is­ters Shane Ross and Finian McGrath were still locked in ne­go­ti­a­tions.

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