Brexit obscures the 2020 vision

The most remarkable thing about the budget delivered on October 8, 2019 is how unremarkable it is. Although there is an election in the offing next year Pascal Donohoe's book balancing exercise for the coming 12 months is an exercise in fiscal prudence.

 

The headlines include Carbon tax, health spending, the establishment of a Brexit war chest and a bump in the price of cigarettes. The Minister for Finance's address to the Dáil contained little drama, but there are a fair few nods to voters in key FG demographics.

 

Minister Donohoe announced that Carbon tax will rise by €6, from €20 per tonne to €26, with polluted-linked charges for new petrol and diesel cars. That increase is to hit the €80 per tonne by the 2030 target. The estimated benefit to the exchequer is an additional €6bn.

This should bring in €90m in 2020, some of which will be used for a package targeted at the Midlands region, amid Bord na Móna job fears.

 

In the "out tray" the threshold for medical card income for people over the age of 70 will increase by €50 for one person or €150 for a couple. The Government will spend another €25m on the National Treatment Purchase Fund to help reduce waiting lists. Prescription charges are to be reduced by 50c and the monthly threshold for the Drug Payment Scheme is being reduced by €10 a month, to €114.

 

Also in the area of health the Minister announced there is free dental care for under sixes and free GP care for under eights. The cap on a family’s monthly drugs payment scheme is also to be reduced by €10, to €114.

 

The urban housing problems are addressed in the announcement that €1.1bn will be made available to support the building of 11,000 social houses in 2020, and a further 12,000 will be built in 2021. The Minister has indicated his Department will extend the help-to-buy scheme until 2021.

 

This will probably be defied as “The Brexit Budget”. The implications of the UK Euro withdrawal will be dealt with by the €1.2bn war chest to cope with a no-deal Brexit. Some of the funds will be spread across a number of departments and agencies to increase the level of staffing, upgrade port and airport facilities and invest in information technology. Minister Donohoe said a no deal Brexit will mean a slower pace of growth here.

 

Capturing a lot of attention is the latest tax increase for cigarettes. From midnight tonight the price of a packet of 20 cigarettes is to go up by 50c.

 

Minister Donohoe indicated that the Government will invest nearly €2 billion in rural Ireland in 2020. An additional €51 million would be directed to the Department of Agriculture, Food and the Marine with a further €17 million going to the Department of Rural and Community Development.

A new pilot agri-environmental schemes to help reduce emissions from the sector, while improving biodiversity, water quality and supporting farm incomes will be funded to the tune of €3 million.