Noonan, Donohoe announce details of Budget 2017

Many aspects of the document were already widely known

Noonan, Donohoe announce details of Budget 2017

Finance Minister Michael Noonan in the Dáil | Image: Oireachtas screenshot

Finance Minister Michael Noonan has announced the details of Budget 2017.

Beginning his speech, Mr Noonan said the economy will see GDP growth of 4.2% in 2016 - and 3.5% in 2017.

He outlined spending increases and tax cuts of €1.3bn. He also told the Dáil over two million people are at work this year.

Brexit risk

He said the British exit from the EU represents a "real risk" to our economy, given the close ties between us.

"We want to avoid any move towards a hard border with Northern Ireland or indeed any charges that reverse what is a common economy on this island", he told TDs.

The Government is also to set aside up to €1bn annually as a rainy day fund after 2018.

While the special 9% VAT rate for the hospitality sector will remain for 2017 - to help the sector "remain competitive and continue to attract UK and overseas tourists".

'Help to buy' scheme

A new 'help to buy' scheme will see first time buyers entitled to a 5% grant on newly-built homes up to the value of €20,000.

But only new properties will be included in this scheme, second-hand homes will not.

There will also be a boost for those who want to earn extra money by renting out a room in their home - the tax free rental allowance under the 'rent a room scheme' is being increased to €14,000 per year.

USC reductions

As predicted, Universal Social Charge (USC) bands for all workers will be cut by 0.5%.

It will increase the entry threshold for USC by €104 to take those on minimum wage outside of the top rates.

While Mr Noonan also reiterated that Ireland's 12.5% corporation tax rate will not be changed, adding that no one in Europe was looking for it to be changed.

A sugar tax will also be introduced - along with the UK - in April 2018, with a consultation process to run until next January.

While, as expected, excise on tobacco is to be increased with 50 cent added on to a pack of cigarettes from midnight tonight.

Read Mr Noonan's speech in full here

While Public Expenditure Minister Paschal Donohoe announced that there will be a €1.9bn increase in spending in 2017.

He said almost 4,500 additional frontline staff - including gardaí, nurses and teachers - will be recruited next year.

A "comprehensive spending review" will also be undertaken ahead of Budget 2018.

Public Expenditure Minister Paschal Donohoe |  Image: Oireachtas screenshot

While housing also featured in Mr Donohue's speech, with him announcing an additional €105m for the Housing Assistance Payment (HAP) Scheme.

This brings the total budget to €153m and will enable additional 15,000 households to avail of the payment.

The Christmas bonus for people in receipt of social welfare will be increased to 85%.

Health spending

Mr Donohoe also says there will be a 7.4% increase in health spending from Budget 2016.

This will put total spending for health at €14.6bn for next year.

There will also be a cap on prescription charges for those over-70 to be cut by €5 a month to €20  a month from March.

While the State pension is to rise by €5 per week from March next year as well.

And a new Single Affordable Childcare Scheme is to be means tested from September next year.

The minister also told the Dáil that all children in receipt of the domicillary care allowance are to get a medical card.

An additional €15m is also to be used to deal with hospital waiting lists.

Public pay

Minister Donohoe also said there will be a new round of Sports Capital Grants in 2017.

The capital budget across all Government departments is to go up by €400m to €4.5bn.

"Public pay restoration must be managed in a way that is affordable for all", he said - adding that a Public Service Pay Commission is to be established, and will give a full report by the middle of next year.

And €290m is to be set aside for pay increases under Lansdowne Road Agreement.

Roads, Agriculture and Defence

Some €319m is to go towards spending on local and regional roads countrywide, while €15m will be used to progress the National Broadband Plan to provide high speed broadband to rural areas.

Mr Donohoe also announed a €119m increase for spending in the Department of Agriculture - as well as additional funding of €16m for the Defence Forces.

While An Garda Síochána will see a boost of €28m - with a commitment to increasing number of gardaí in the force to 15,000.

And a €44m package was also unveiled for major flood relief schemes.

Read Mr Donohue's speech in full here