Budget 2019 won’t be announced until October 9th 2018 – but already we are getting some hints of what might be included in the upcoming Budget.
The latest information we have is from the Government’s Mid Year Expernditure Report. Minister for Finance Paschal Donohoe says he is targeting a budget package of €3.4 billion – but €2.6 billion of that has already been committed to various expenditure measures.
This leaves just €800 million for allocation on budget day.
Minister Donohoe had previously stressed that the chances of spending increases and tax cuts in Budget 2019 would be limited because of previously agreed Budget commitments.
What Might Happen in Budget 2019 ?
Mr Donohoe had previously hinted at plans to make changes to the Local Property Tax, which is still calculated on 2013 property values. But he said any changes would be “modest” and are not expected to affect homeowners until 2020.
Some small cuts to Income Tax and USC are also expected in Budget 2019 .
The income threshold at which the 40% income tax rate kicks in – will possibly be increased. So higher earners will see reductions in tax .
USC thresholds could also be adjusted – so that lower earners will pay less USC.
Increased excise duty on diesel is also a big possibility – to bring it in line with petrol.
The reduced VAT rate of 9% on tourism related services will be looked at again – and may well be increased to 13.5% or even 23%
Carbon tax may well be increased .
We also expect some changes to duty on alcohol and / or tobacco. Alcohol duty has not been touched since 2014.
Capital Gains Tax could be reduced in an effort to stimulate the economy. Currently at 33%, it might be cut to 31% or 32% in 2019.
Welfare benefits and sate pensions are likely to be increased again this year – but maybe not as much as €5 a week for everyone (as in 2018 and 2017). It might be more targeted this year.
Between 2015 and 2018 we have seen a 5.6% increase in the value of pensions and most other welfare payments have seen an increase of 2.7%. Over the same period the Harmonised Consumer Price Index only went up by 1.8%.