Dono­hoe re­jects claims of boom-and-bust fund­ing hikes

Irish Examiner - Supplement - - BUDGET 2018 - Juno McEn­roe

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.

Photo: Ea­monn Far­rell/

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.

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