As budget 2017 looms on the horizon different groups from opposition parties, to trade unions, to charities have launched their pre-budget submissions. While the government hints at planned tax cuts and spending measures. Here at Beyond the Pale Ireland we have looked at what budget 2017 could mean for rural communities.
Farming
The common theme among the different farming organisations’ pre-budget submissions is tax relief and increased funding through the different agri schemes. In particular the IFA want another 250 million for GLAS and EAOS, while the IFA’s calls for a reversal of cuts to the ANC scheme and increased use of funding under the beef Data and Geomnics scheme are echoed by the ICSA.
Alongside increased funding through schemes Income averaging and tax relief in the for of capital acquisitions tax and capital gains tax have featured in the IFA, ICSMA, ICSA, and Macra na feirmes pre-budget submissions. While the joint agricultural committee has called on the government to consider the impact of the Brexit vote on the Irish mushroom industry.
With unity on the big ticket items, and both Fine Gael and Fianna Fáil’s track record of appealing to (sections of)the farming community it is likely that the budget will contain some good news for farmers concerning tax measures and income averaging, with the possibility of some increased funding for existing grant schemes also a possibility
Tax
There is over 300 million set aside for new tax measures in the budget however it is likely that those on higher incomes will benefit the most from any tax cuts. Cuts to the USC, the increase in the inheritance tax threshold, and an increase in tax relief for landlords will be welcome news to Fine Gael’s core support base.
The changes to capital acquisitions and capital gains tax will be welcomed by the farming organisations, however the bulk of these measures will only marginally effect the majority of working people. The Association of Farm Contractors Ireland’s call for income tax relief for seasonal workers, and an improved process of accessing social welfare for seasonal workers is likely to fall on deaf ears.
As are Sinn Féin and ICTU’s calls for increased taxation to allow for more spending on key areas such as housing, health and education. progressive measures such as Sinn Féin’s call for increased income tax for those earning over 100,000 euro a year and ICTU’s Net asset tax on households with assets over 1 million are highly unlikely to be included in budget 2017
Government spending
Pensions have been a sticking point between Fine Gael and Fianna Fáil during the budget negotiations. It’s clear that the will be a slight increase, it is less clear however when it will come into effect or if it will just be for old age pensioners, or will those on widows/widowers pension and careers allowance also benefit.
There will likely be some increased spending on education, with 3rd level funding to be addressed. The details of this however remain unclear, we can however be sure that it will not amount to the ammout called for by Sinn Féin or the USI. What is clearer however is the likely increases health spending with increased funding for the recruitment of front line staff and a package to tackle waiting lists likely.
Pensioners alongside other welfare recipients are likely to see some benefit in this budget. The exception to this is of course the some 20% of young people who are unemployed, there has been no suggestion that the lower rate of social welfare payments for under 25’s will be reversed. It is also unlikely that the postgraduate grant will be restored.
Minimum wage
ICTU unsurprisingly are championing an increase in the minimum wage alongside measures to tackle precarious work. With income tax returns falling due to the persistence of low pay some measure of an increase is a possibility. There is of course a large gap between the low pay commissions recommendation of a ten 10 cent increase and ICTU’s call for a living wage of 11.50 per hour.
despite the economic benefits of a living wage it is more likely that the government will at most implement the low pay commissions recommendation of a 10 cent increase.
Most unique suggestion
Marca na feirme’s pre budget submission called for a scheme to help young farmers cover the cost of hired labour during pregnancy stands out as a forward thinking measure which would allow make farming a more attractive occupation for women and ease the financial burden on young farmers starting their families . This forward looking suggestion would be of significant benefit to young farmers if it was implemented.
Conclusion
The drawn out nature of the budget negotiations alongside Fine Gaels record during over the past five years means surprises in this budget are likely to be few and far between. The governments talk about recovery has no doubt raised peoples expectations, however Fianna Fáil’s decision to make pensions their main sticking point has meant that this years budget will offer little to low paid workers and the unemployed.
The benefits in this budget, for those who benefit, will be few and far between as the government attempts the precarious balancing their ideological commitment to tax cuts alongside the need for increased public sector spending.
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