Donohoe rejects claims of boom-and-bust funding hikes
Finance Minister Paschal Dono hoe has flat ly rejected claims his near € 400m commercial stamp duty fund will lead to boom- and- bust funding increases for the economy.
The Fine Gael minister said current spending would only increase by 3.4% and that he was confident the measure would see its committed income arrive. He was confident the stamp duty would be collected-despite opposition claims the 6% level of the stamp duty was a move to ‘Charlie Mc Creevy-type’ spending politics.
Mr Donohoe announced the tripling of the stamp duty payable by purchasers on commercial property transactions, up from 2% to 6%.
While there was some surprise in Fine Gael circles about the 4% rise in the stamp duty, Minister Donohoe said that he was undoing a tax concession that had helped the commercial sector recover, after it wasp reviously dropped down from 9%. The move was part of broadening the tax base, he said.
The construction industry had expressed concern over the stamp duty changes, which it claimed may “have a dampening effect on investment”.
There will also be a scheme to refund commercial stamp duty to purchasers of residential sites as long-as they commence the building of homes within 30 months.
He also said that he would be passing legislation for the rainy day fund soon. This will see at least €1.5 billion transferred to it from the Ireland Strategic Investment Fund. Annual contributions of €500 mf or it from the government will start in 2019, after the country has achieved its medium- term objectives for 2018 and balanced the books.
Minister Donohoe described how key decisions on the big spending departments during the budget negotiations had been made over the weekend, for departments such as health and social protection.
Asked why he had not increased betting taxes to help fund addiction services, as requested by Independent Alliance Minister John Halligan, he said that the increase could have impacted on smaller bookies.
He also defended a decision not to increase child benefit for families, saying the Government had not been able to afford it.
Minister Donohoe also said he believed that the minority government would go on to negotiate a third budget next year, with the current confident and supply ar rang ements with Opposition party Fianna Fail.
Earlier, during his budget speech in the Dáil, Mr Donohoe outlined how the budget was fair, targetted and the limited increased spending was to safeguard our national finances while also creating long-term benefits.
Further details of the transport budget are expected to be unveiled today while capital and long- term projects will also be outlined by ministers this week.
Last night, the commercial stamp duties and a 50c rise in cigarettes were set to be voted in by the Dáil, as is traditional with some excise and duty or tax areas after budget day.
Fine Gael Minister for Finance and Public Expenditure and Reform Paschal Donohoe launches Budget 2018 at Government Buildings. He announced the tax and spending measures for 2018 in the Dáil yesterday.