Donohoe examines extra help for families with childcare bills

Final budget negotiations ‘difficult’ in the light of uncertainty around Brexit

Paschal Donohoe: he said it “now seems evident” the UK wants to adopt sharply different regulatory rules to the EU after Brexit. Photograph: Getty Images

Paschal Donohoe: he said it “now seems evident” the UK wants to adopt sharply different regulatory rules to the EU after Brexit. Photograph: Getty Images

 

Extra help for families with childcare bills is being examined by the Minister for Finance Paschal Donohoe, but final budget negotiations are “difficult” in light of uncertainty around Brexit.

The Department of Children wants to expand the National Childcare Scheme, offering more subsidised hours and after-school care, but no agreement has yet been reached between Mr Donohoe and Minister for Children Katherine Zappone.

The room for tax cuts in Budget 2020 is minimal, said Mr Donohoe. “The overall parameters for this budget are demanding and they are tight.

“We are going to move into a surplus position next year. This will be after balancing our books last year. My priority is to try to heighten that potential surplus so that if we find ourselves in a no-deal scenario the move into a deficit is a small as possible for as short a period of time as possible.”

The National Childcare Scheme is due to fully get under way in November, and is funded up until the end of the year following commitments in last year’s budget, including a universal subsidy for children from six months to three years of €1,040 per year.

There is a targeted subsidy for children aged between six months to 15 years, up to €145 per week, with 87,000 children benefiting. The number of subsided childcare hours will increase from 40 to 45 hours per week.

On Friday night sources in Government emphasised that would be no “across the board” tax cuts, although changes to USC thresholds if the minimum wage is increased are being considered, along with increases in home-carers and self-employed tax credits.

Implications

Referring to Brexit in a speech on Friday night, the Minister for Finance said it “now seems evident” the UK wanted to adopt sharply different regulatory rules to the European Union after Brexit.

If so “there are clear implications for this island, and the Good Friday agreement, that cannot be ignored in the event that this policy is pursued”, he told the Irish Business and Employers Confederation.

“We must also recognise the reality that in our global era, where the separate regulatory superpowers of the US, the EU and China co-create global rules, this could be a very significant decision.

“As such, were the UK to pursue a policy of regulatory divergence from the EU there are very profound implications for the protection of the single market on this island, which constitutes the UK’s sole land border with the EU.”

Meanwhile, he warned business leaders that the outcome of talks on new international tax rules “will be disruptive” and “particularly difficult” for small open economies such as Ireland.