More axe than tax in today’s Budget

Today’s Budget will see a raft of new measures designed to adjust the public finances by E2.5bn with a greater emphasis on cuts.

It is expected that there will be E900 million in additional revenues in 2014 and more than E1.6 billion in cuts.

It is widely expected that the monthly telephone allowance for pensioners will be scrapped and that there will be a hefty rise in prescription charges, a 8-point rise to 41 per cent rise in Dirt tax and scrapping the mortgage interest supplement payments among others.

Finance Minister Michael Noonan will deliver the taxation measures in the Dail at 2.30pm, followed by the Minister for Public Expenditure and Reform, Brendan Howlin, who will outline the spending cuts.

Four departments – Social Protection, Health, Education and Justice – are expected to bear the brunt of the cuts.

It is expected that jobseeker’s payments will be cut to E100 for new entrants under 25 (the current cut-off age is 22), with those aged 25 getting E144.

A new bank levy worth E200 million to the exchequer will also be announced.

Other major changes confirmed to The Irish Times yesterday include: The scrapping of the E9.50 monthly telephone allowance to pensioners; Dirt tax on savings interest to be increased from 33 per cent to 41 per cent, yielding E100 million to the State; An increase in prescription charges from E1.50 to E2.50, the second successive rise in that charge; The discontinuation of the mortgage interest supplement for new entrants from January with a phasing out of the scheme over four years (current cost is E77 million per annum); Between E170 million and E200 million in cuts in the Department of the Environment, most in housing, although homeless funding is being protected; The introduction of the Rent-a-Book scheme in primary schools, with funding to be found through cuts in other areas in the Department of Education; A cut of E5 million in the overall amount paid by the Department of Social Protection from E59 million to E54 million for the 410,000 television licences held by pensioners. RTE will have to bear the cost of the reduction.