Budget 2022 Live: Cigarettes up 50c; minimum wage to rise; State pension increases

The Government is announcing a €4.7 billion Budget package as Ireland begins to emerge from the Covid-19 pandemic
Budget 2022 Live: Cigarettes up 50c; minimum wage to rise; State pension increases

Pictured outside Government Buildings before presenting Budget 2022 to Cabinet are Minister for Public Expenditure and Reform Michael McGrath and Minister for Finance Paschal Donohoe. Photograph: Sasko Lazarov / RollingNews.ie

Sinn Fein condemned the Budget put forward by Finance Minister Paschal Donohoe.

The party’s finance spokesman, Pearse Doherty, told the Government benches in the Dail that the Government was “out of touch, out of ideas and out of time”.

“Never has so much been spent to achieve so little.

“Energy prices are spiralling and your plan is to increase them further with carbon taxes.” He added that housing prices and rents are out of control and said the Budget lacked measures to reassure families.

“We heard more of the same,” he said.

PUBLIC TRANSPORT

Michael McGrath confirmed that young people, aged between 19 and 23, can use public transport with a 50% discount on fares.

He said transport will be a key part of the National Development Plan.

“Over 1.4 billion euro will be provided to further develop our public transport networks and to support the transition to a decarbonised and climate-resilient transport system,” he added.

“In order to promote modal shift in the transport sector, I am providing 25 million euro for the introduction of a Youth Travel Card.

“This card will be available to any person between the ages of 19 and 23 and will allow them to avail of a 50% discount on fares across the transport network.”

PENSION

McGrath also confirmed a €5 increase to the weekly pension.

The living alone allowance will increase by €3.

The duration of parent’s benefit will also increase to seven weeks from next July, and from June, the back to school clothing and footwear allowance will increase by €10.

“To support carers and people with disabilities, from January next year I will extend the period during which domiciliary care allowance can be paid for children in hospital from three to six months,” Mr McGrath added.

“The rate of wage subsidy scheme for people with disabilities will rise by a euro per hour.

“I am increasing the income disregard for carer’s allowance from €332.50 to €350 for a single person and from €665 to €750 for a couple.” Mr McGrath also confirmed that the weekly rate of the fuel allowance will rise by €5.

“Finally, I am pleased to announce a 100% Christmas bonus for 2021 which will assist many families with outgoings over the festive period,” the Fianna Fail minister added.

CHILDCARE

Michael McGrath said more capacity is needed in the childcare sector and more flexibility for working parents.

He said Budget 2022 marks a “turning point” in the state’s approach to the early years and childcare sector.

“We will invest a record 716 million in childcare next year. I am providing 78 million for additional investment in core funding for the childcare sector and to reform the National Childcare Scheme (NCS),” he added.

“A new funding stream for up to 4,700 early years and childcare providers will be put in place from September 2022 onwards, at an estimated cost of 69 million next year, to support improvements in the quality of childcare provision.

“This additional funding will improve conditions for workers. The funding the Government is allocating will support providers in attracting and retaining staff and it will provide more options for parents and is linked to a commitment of no increases in fees to parents.

“To address affordability for parents, we will extend the NCS universal subsidy to children under 15 from September 2022, benefiting up to 40,000 children at a cost of 5 million euro.

“We will also remove the practice of deducting hours spent in pre-school or school from the entitlement to NCS subsidised hours. This will benefit an estimated 5,000 children, particularly from low-income families.”

MICA

The Minister for Public Expenditure has said that the Government will bring forward proposals in the coming weeks for a “significantly enhanced scheme” to address the mica crisis.

Michael McGrath told the Dáil chamber: “The Government acknowledges the devastation being experienced by thousands of households impacted by defective mica building blocks.

“Following consideration of the workforce group report from the Department of Housing, the Government will bring forward proposals in the coming week for a significantly enhanced scheme to address this important issue.” Families affected by the mica crisis have been calling on the Government to introduce a 100% redress scheme.

The Government has faced criticism for only offering 90% under its current plan.

COVID FUNDING

The Minister for Public Expenditure said that the Government will provide €7bn in Covid funding.

Michael McGrath told the Dail chamber: “This funding will be made available as required to continue our fight against the pandemic.

“It will fund public health measures, in particular the continuation of our testing and tracing capacity, and our vaccination booster campaign.

“It will continue to support incomes and jobs through the Employment Wage Subsidy Scheme and will further support a range of sectors in their recovery from Covid.

“Building on our experience of the pandemic, Minister Donohoe and I will hold approximately four billion euro of the Covid provision as a contingency reserve so that we can adapt if faced with the unexpected.

“This prudent approach served us well last year as we had the resources available to respond to the uncertainties presented by the pandemic.

“Of the 4.2 billion increase in core expenditure next year, I am allocating €1.45bn for new current expenditure measures.”

MINIMUM WAGE

The minimum wage is to increase by 30 cent to €10.50

FRONTLINE WORKERS

Mr Donohoe finished his Budget speech by paying tribute to “the heroes of the Covid pandemic”.

“For those worried about whether they can own a home or afford their rent, this Budget will support you.” “For businesses looking to the future, this Budget backs you.” “I am an optimist by nature,” the finance minister said on Tuesday as he promised “truly exciting times ahead for this country”.

GLOBAL TAX AGREEMENT

The Finance Minister has said the “national interest” is best served by joining the OECD’s global tax agreement.

That agreement will see Ireland’s 12.5% corporation tax rise to 15%.

“While there will be a cost to the Exchequer, it provides long-term certainty for businesses and investors for the benefit of Irish jobs.” “As a small open economy that depends on rules and order in global tax and trade, an agreement was in our interests.” Mr Donohoe said that the 15% rate will still be less than other countries.

“We will remain an attractive location for investment,” he told TDs.

“It is the right decision for Ireland, for our jobs, for our economy.”

HELP TO BUY SCHEME

Paschal Donohoe has said that the Government’s Help to Buy scheme for first-time buyers – controversial and criticised by some opposition parties – will be extended unchanged into next year.

“Ensuring that people have access to home ownership in this country is an absolute priority for this Government,” he said.

CIGARETTES

As expected, the Finance Minister also announced that the excise duty on a pack of 20 cigarettes will rise by 50 cents.

Mr Donohoe said that the move will bring the price of cigarettes to around €15.

CLIMATE CHANGE

The Finance Minister has described climate change as “one of the most important issues of our time”.

“The world is burning,” he told the Dail.

Alongside the annual increase in the carbon tax by €7.50 per tonne, Mr Donohoe said that to incentivise uptake of electric vehicles the Government will extend the 5,000-euro relief for battery electric vehicles until the end of 2023.

LAND TAX

Mr Donohoe has told the Dail that a 3% zoned land tax will be introduced – set to apply to land which is zoned as suitable for housing but remains undeveloped.

“The tax will be based on the market value of the land and I have determined that the rate at the outset should be 3%,” he said.

The tax has a two-year lead-in time for land zoned before January 2022 and a three-year lead-in time for land zoned after January 2022.

Mr Donohoe said that this will “give scope to review the workings of the tax” and to “listen to stakeholders”.

WAGE SUBSIDY SCHEME

Ireland’s Employment Wage Subsidy Scheme will remain in place until April 30, 2022, Paschal Donohoe has confirmed.

The scheme will taper off over the coming months, he said.

Mr Donohoe also said that the country’s reduced VAT rate of 9% for the hospitality sector will remain in place until August 2022.

Some of the measures announced will also benefit remote workers.

Mr Donohoe said: “I am announcing an income tax deduction amounting to 30% of the cost of vouched expenses for heat, electricity and broadband in respect of those incurred while working from home.” As expected, the finance minister has also announced that the standard rate band for income tax will increase by €1,500.

He also said that personal tax credit, employee tax credit and earned income credit will increase by €50.

Mr Donohoe also said that the national minimum wage will increase by 30 cent to 10.50 euros an hour.

JOBS

The Finance Minister, Paschal Donohoe has told the Dáil that more than 400,000 jobs will be added to the Irish economy between 2021 and 2022 – with employment expected to reach and exceed its pre-pandemic level during the course of 2022.

“This performance, by any measure, represents a remarkable rebound in our jobs outlook.” “We are recovering,” he said.

In 2022, the unemployment rate is expected to fall to around 6.5% across the year.

Mr Donohoe said: “The Government also continues to be aware of, and prepared for, the risks and conseqxit.”uences of Bre

PACKAGE

Finance Minister Paschal Donohoe is announcing a €4.7 billion Budget package as Ireland begins to emerge from the Covid-19 pandemic.

Mr Donohoe told the Dáil today: “The last time I announced a Budget in this chamber, two years ago, none of us could have foreseen that the worst global pandemic in a century awaited.” “Many lives were lost. Many livelihoods were ruined.” “But, it also brought out the very best in Irish society.” 

“In framing this Budget, we have been conscious of the cost of living pressures that are currently confronting citizens and businesses.

“Budget 2022 meets the twin goals of investing in our future, of meeting the needs of today, while putting the public finances on a sustainable path.”

More in this section

Sponsored Content

summersoaplogosml

Called Droid, our next story is about a boy who designs a robot at UCC and chaos ensues. It was written by Margaret Gillies, from the MA in Creative Writing Programme at UCC.

Add Echolive.ie to your home screen - easy access to Cork news, views, sport and more