Budget 2020 is announced by Minister Paschal Donohoe

Budget 2020 is announced by Minister Paschal Donohoe
Minister for Finance, Public Expenditure and Reform Paschal Donohoe at Government Buildings Dublin as he holds budget day documents. Photo: Sam Boal/RollingNews.ie

Minister for Finance Paschal Donohoe has opened his speech on the 2020 budget for Ireland with a reference to Brexit.

"This is a budget without precedent, in bringing it to this house we seek to manage the risk for our nation, while aiming to make progress on so much, from the health of our national finances, quality of our public services and the challenge of climate change, these are also times without precedent, and as we respond, we do so with the resources of a well-won economy and the purpose and certainty of good government and responsible politics," he said.

"This is a budget developed in the shadow of Brexit and the context for Brexit has shifted to no deal as our central assumption, this does not mean no deal is inevitable, but equally we stand ready if it does happen.

"In preparing for no deal we can ensure the Government has the necessary resources to meet the impact of Brexit, keeping our public finances on the credible path they have been on since 2011."

Mr Donohoe added: "This year we have eliminated our deficit and projected a surplus of 2% of national income.

"If the UK leaves the EU with an agreement we will continue to build on this surplus.

"In the event of no-deal we will intervene in a sustained and meaningful way to support jobs and our economy.

No increases for pensioner couples in Budget 2020. 2006. 20/2/2006 Photo/RollingNews.ie
No increases for pensioner couples in Budget 2020. 2006. 20/2/2006 Photo/RollingNews.ie

"We stand ready to act."

He said there is large uncertainty around a surplus given the "unprecedented nature of a disorderly Brexit".

"The rate (at which) we create new jobs may be slower which may influence tax we collect, while currently low, the cost of borrowing can shift rapidly, so the Government is clear about the challenges posed by Brexit, it's why we've been preparing since before the referendum in 2016," Mr Donohoe added.

Mr Donohoe continued: "We must increase the level and range of supports to ensure our economy is protected and this is why we are announcing over 1.2 billion euro, excluding EU funding, to respond to Brexit.

"This is two parts.

"I am making approximately 200 million euro in Brexit expenditure available next year across departments to increase staffing and upgrade ports and airports.

"This is to ensure we are ready for Brexit whatever form it takes.

"We will intervene to protect our economy. It will be borrowed money. If we do not need it we will not borrow it.

Extinction Rebellion launches a Budget for Climate Justice Outside Government Buildings. Photo: Leah Farrell/RollingNews.ie
Extinction Rebellion launches a Budget for Climate Justice Outside Government Buildings. Photo: Leah Farrell/RollingNews.ie

"A no deal is unpredictable. It will impact different sectors in different ways. Our response will demand flexibility.

"650 million euro will be made available to support agriculture and tourism and those most affected regions."

Mr Donohoe's Brexit interventions in the budget will include:

- A 45 million euro Transition Fund 

- A 42 million euro Rescue and Restructuring Fund 

- 8 million euro Transformation fund for Food and Non Food businesses 

- 5 million euro extra for Micro Finance Ireland 

- 5 million euro for Local Enterprise Offices Emergency Brexit Fund 

- 2 million euro extra for Intertrade Ireland 

- 3 million euro for Regulatory bodies 

110 million euro will also be provided through the Department of Agriculture, Food and Marine in the event of a no deal.

An additional 40 million euro of funding for tourism in the Irish budget will be provided from the 650 million euro contingency fund, which will target the British market, dedicate promotions in North America and Europe and encourage direct access through regional airports.

In addition:

- 85 million euro will be provided to beef farmers 

- 14 million euro for fisheries 

- 6 million euro for other livestock and the mushroom sector 

- 5 million euro for the food and drinks processing industry

"As we prepare for Brexit, I can confirm to the House that our economy is in a strong position," Mr Donohoe added.

"After a long and difficult journey, balance was finally restored to the public finances last year.

"Despite many challenges, our economic growth is broadly based.

"Public capital investment will increase by 22% this year.

"The unemployment rate has fallen to 5.3% from the peak of 16% in 2012.

"We expect to meet our revised target of 58.6 billion euro by end year."

He said the Department of Finance is forecasting GDP growth of 5.5% for this year, up from 3.9% in the Stability Programme Update.

Climate change has seen a prominent showing in the Irish budget, with Mr Donohoe saying it is the "defining challenge of our generation".

Carbon tax will be increased from 20 euro today to 80 euro per tonne by 2030, raising an additional 6bn euro.

Carbon tax will be raised by six euro from midnight tonight, raising 90 million euro in 2020, and will be ringfenced to fund new climate action measures, investing in a low carbon future.

Mr Donohoe told the House: "In the past, it has proven difficult to deliver a budget in October which lines up closely with the Government's plans from the first half of the year.

"In part, this was due to cost pressures that have arisen especially in the health sector.

"Those overruns have had to be dealt with, on top of the planned budgetary package.

"This year marks a turning point in overcoming these problems. In total, the supplementary estimates that I am providing this year are less than half of last year.

"They are still high, but a significant reduction has occurred."

Mr Donohoe has also announced additional climate change measures:

- 5 million euro for peatland rehabilitation, a 250% increase in the budget 

- The replacement of the 1% diesel surcharge introduced last year with a nitrogen oxide emissions based charge, which will apply to all cars registering for the first time from January 1 2020.

Mr Donohoe told the House that he is using a portion of the carbon tax revenues next year to fund a package targeted at the Midlands.

"The Government will work with local communities on the best use of this funding," he added.

"20 million euro will be dedicated to the creation of a new energy efficiency scheme targeted, initially, at the social housing stock in the region."

The Government is to provide a further five million euro for peatland rehabilitation and establish a new Just Transition Fund that will be devoted to priorities identified by local communities.

Some six million euro will be available for this fund and a Just Transition Commissioner will be appointed.

In the 2020 Irish budget, Mr Donohoe says transport is one of the ways the country can tackle climate change.

He will allocate:

- 2.7 billion euro to the Department of Transport, Tourism and Sport, an increase of 384 million euro from 2019

- 9 million euro for sustainable mobility projects around the country including greenways and cycling projects 

- An additional 3 million euro for electric vehicle infrastructure, doubling the number of local authority on-street charge points, a new scheme for chargers at apartment blocks and rollout of fast-charging taxi ranks at transport hubs 

- 8 million euro for grants for individuals purchasing electric cars The Government is to introduce a relief from betting duty and betting intermediary duty up to a limit of 50,000 euro per year.

"Another key area we must secure for the future is our rural economy which supports thousands of jobs in increasingly diverse areas," Mr Donohoe added.

Education will receive 11 billion euro in next year'd budget, the highest ever allocation to the sector.

This will provide for 150 new mainstream teaching posts, and includes an investment of 1.9 million euro in special education - providing over 400 additional teaching posts to support those with special education needs, and 1,000 special needs assistants.

Additional funding has been made available for school books in primary schools.

Mr Donohoe said a further 20 million euro will be spent on homeless services which will bring the total funding to 166 million euro in 2020.

He said this will support people in emergency accommodation and increase preventative measures, long-term support and day services.

A further 1.1 billion euro of capital funding will be allocated to social housing to support the building of over 11,000 new social homes next year.

Mr Donohoe said that 12,000 units will be "delivered" in 2021.

An additional 80 million euro will go to the Housing Assistance Payment scheme.

The department of Children will be allocated an additional 94 million euro in 2020.

The allocation for Tusla will be over 184 million euro to support the reduction of the number of children to social worker ratio, and address cost pressures in private residential and foster care.

Funding and early learning care will increase by 54 million euro, to support full participation of children with disabilities under the Access and Inclusion Model, and to support the National Childcare Scheme.

The help-to-buy scheme has been extended in its current form for another two years to the end of 2021.

To date, some 15,000 new homes have been purchased or built by first-time buyers under the scheme.

The police force in Ireland will see its budget increased by 81 million euro in 2020, a 4.7% increase.

This will deliver up to 700 new Garda recruits, and extra civilian staff to allow for more frontline policing.

The broader justice sector will receive an extra 38 million euro, an increase of approximately 4.8%, to fund increasing costs in Direct Provision and greater levels of activity in Courts and Prison services.

An allocation of 265 million euro will support capital projects in a new Forensic Science Laboratory, the redevelopment of Limerick Prison and new Garda offices in Harcourt Square in Dublin.

Health expenditure is set to increase by 6.3% to 17.4 billion euro next year.

The Government is to spend another 25 million euro on the National Treatment Purchase Fund to help reduce waiting lists.

Prescription charges are to be reduced by 50 cent.

The monthly threshold for the Drug Payment Scheme is being reduced by 10 euro a month.

The threshold for medical card income for people over the age of 70 will increase by 50 euro for one person or 150 euro for a couple.

This will benefit up to 56,000 people.

Free GP care is to be expanded to children under the age of eight and free dental care for children under the age of six.

The price of a packet of 20 cigarettes is to go up by 50c from midnight.

"This will bring the price of cigarettes in the most popular price category to 13.50 euro," Mr Donohoe said.

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