Budget 2017: Reactions range from surprise to ‘continued austerity’

Strong reactions, positive and negative, to Budget 2017 are being felt. Here are some of the more notable responses.

Public investment must be prioritised over any tax cuts: St Vincent de Paul

The 3:1 ratio of investment in services (particularly in Education, Health and Social Protection) to tax cuts has been welcomed by the Society of St Vincent de Paul (SVP).

The society welcomed the increase in investment in Early Childhood Care and Education and the universal and targeted measures announced.

Low income families struggling to afford childcare and afterschool costs would benefit from this new scheme, the charity said.

SVP welcomed the €5 per week increase in the full weekly social welfare payment, “which goes some way to restoring the purchasing power of these payments, and the further partial restoration of the Christmas bonus, as a vital support to families at an expensive time of year”.

The improved income disregard from €90 to €110 per week and the reinstated cost of education allowance would benefit lone parents in work and education, it said.

On the under-25s, the restoration of the Back to Education Allowance to the full rate “is welcome as are the reductions in rent supplement contributions from this group, many of whom are particularly at risk of homelessness”.

SVP said it believed because homelessness and housing need was so acute, the scale of the problem required "key quick wins combined with a scale of funding and delivery of social housing units unseen in Ireland for generations".

Positive response to farm income campaign: IFA

IFA president Joe Healy said the budget had responded positively to IFA's farm income campaign over the last six months with significant measures on low-cost loans, increased funding for farm schemes, the reversal of cuts to Farm Assist and flexibility on income averaging to help deal with volatility.

Mr Healy said 2016 has been a very difficult year for farm families, with low commodity prices, poor weather conditions and the impact of the Brexit decision.

The IFA president welcomed the introduction of a new €150 million agri cashflow support loan fund, at an interest rate of 2.95 per cent, which is to be available to farmers in all sectors.

He acknowledged the €107 million increase in funding of farm schemes under the Rural Development Programme (RDP), in particular the €69 million increase for the Green Low-Carbon Agri Environmental Scheme (GLAS) to €211 million for 50,000 farmers, the new €25 million sheep welfare scheme and the reopening of the Beef Genomics Programme, with funding of €52 million for next year.

“The Government must build on these schemes to reach the €250 million target for GLAS set out in the RDP and continue to improve suckler and sheep supports,” he said.

What Budget 2017 should have addressed: Irish Congress of Trade Unions

The Irish Congress of Trade Unions said Budget 2017 should have been used to begin a much-needed process of social repair after eight years of austerity.

“We saw some small steps, but the budget lacked the ambition needed to begin rebuilding, which is so vital after years of diminished living standards.”

Congress general secretary Patricia King said: "The best way to boost living standards would have been to prioritise the rebuilding of public services over tax cuts.

“Perhaps the major flaw in Budget 2017 was the decision to forgo €620 million in taxes through the continued VAT subsidy to the tourism and hospitality sector.

"That money could have built 3,000 affordable homes for people. Despite high profits, the sector continues to have the highest number of minimum-wage workers in the economy, and the employers refuse to engage with the Joint Labour Committee," Ms King said.

‘Continued austerity’: Tasc - Think Tank for Action on Social Change

Rory Hearne of Tasc has labelled Budget 2017 as continued austerity.

“The basic rate of social welfare is €22 a week below the at-risk of poverty line, a €5 a week increase means it is still €17 below the at risk of poverty line,” he said.

He told RTÉ’s News at One Budget Special more investment was needed, “rather than more austerity reducing your fiscal possibilities in terms of investment”.

“Investment is required because the global economy is stagnating, we’ve rising inequality and part of it, they’re expecting back money from the banks in terms of the sale of them or part divestment.

“That money could be pushed directly into investment but they’re clearly saying that’s going to go into debt reduction. That is a real political debate and should be a real discussion.

“The fiscal space is just another arbitrary term. There was nothing that necessarily restricted the budget to €1.2billion - for example if other tax changes had been made such as the introduction of a wealth tax, that could have meant an extra €200million for spending.”

VAT compensation announcement welcomed: Charities Institute Ireland (CII)

CII has welcomed the budget announcement of a review of VAT on charities, with a view to implementing a VAT compensation scheme for charities that engage in independent fundraising.

In his budget speech, Minister for Finance Michael Noonan said he has requested his officials to "engage again…with a view to reviewing the options".

CII spokesperson, Sheila Nordon, said such a scheme would greatly incentivise charities to fundraise independently, assist in maintaining essential charity services and further encourage public donations.

The Minister's announcement follows publication of a Working Group Report last year which proposed a VAT Compensation scheme for charities similar to one already operating in Denmark.

Surprise expressed: Institute of Certified Public Accountants in Ireland

The Institute of Certified Public Accountants in Ireland (CPA Ireland) has broadly welcomed the pro-business elements announced in today’s budget.

However, the body expressed surprise that changes to the tax treatment of the self-employed were not delivered as promised.

Commenting on the budget David Fitzgerald, director of membership services, said: "Today's budget announced by Minister Noonan has demonstrated a commitment towards supporting businesses to lead economic growth, while maintaining a prudent approach. Indigenous companies have contributed to three out of every four new jobs created here since 2011, and so we welcome the focus on supporting this sector SMEs.

“We have consistently called for an end to the tax discrimination against the self-employed which would encourage increased levels of entrepreneurialism. The increase of €400 in the earned income tax credit for the self-employed, while a positive step, is below what had been signalled previously.

“It is important that the Government continues to demonstrate ongoing commitment to end this imbalance. This would help to create jobs in start-ups and SMEs and we look forward to this good work being continued in the coming years.

“The changes to the Capital Gains Tax relief will help to encourage would-be entrepreneurs to set up in Ireland. The relief is currently subject to a lifetime cap of €1,000,000; by announcing his intention to keep this threshold under review Minister Noonan has recognised one of its shortcomings.

“The equivalent threshold in the UK is £10 million - for the measure to have a widespread impact for SMEs it must be increased.

“Increasingly businesses are seeking innovative ways to reward productivity. The suggestion by Minister Noonan that an SME focused share-based incentive scheme will be introduced is a welcome step. We look forward to examining the details of this proposal and working with the department to assist with its implementation.

“For small and medium enterprises, retaining talented staff is always a key priority. The introduction of new supports for the cost of childcare will help do this, and may also attract some stay-at-home parents to return to the workforce.

"The reduction in the rates of Universal Social Charge is also a welcome development as it will reduce the cost of creating employment and supports all workers across the economy. However, we will continue to urge that more is done to ensure the economy is not over-reliant on higher income earners."