Irish Budget's 'economic shock absorbers' to reduce Brexit impact


Ireland's minority Government has announced a raft of measures in its 1.3 million euro (£1.2 million) Budget to deal with the Brexit fallout.

Finance Minister Michael Noonan revealed breaks for tourism, food and agricultural businesses most directly hit by the UK's decision to pull out of the European Union.

"Whatever the final settlement, what we know with certainty is that Brexit has increased risk to the Irish economy and, as well as introducing specific measures to assist particular sectors of the economy, we must also put in place safety nets to protect us against future economic shocks," he said.

Mr Noonan said "economic shock absorbers" would allow Ireland deploy resources to reduce or eliminate the impact of future economic shocks linked to the EU referendum result.

But despite cutting its economic growth forecast for next year to 3.5%, he said the Irish economy is in good shape, growing strongly and should continue to grow over the coming years.

The Budget, agreed with much of the Opposition benches for the first time in the Republic's history, will include 500 million euro (£450 million) of tax cuts, offset by measures increasing tax revenue worth 195 million euro (£176 million).

Overall, it favours spending increases over tax cuts by three to one.

Among the headline measures are:

:: A new help-to-buy scheme for first-time house buyers struggling to get on the property ladder, giving a 5% rebate of up to 20,000 euro (£18,000) over four years on new houses.

:: Further cuts to the three lowest rates of the controversial austerity levy, the universal social charge, of 0.5%.

:: 50 cent tax added to cigarettes, bringing major brands to more than 11 euro (£9.90) a packet.

:: Freeze on the reduced tourism and hospitality VAT rate of 9%.

:: A new sugar tax on soft drinks to be introduced alongside the UK in April 2018.

:: A two-year extension to a home renovation tax-break scheme credited with kick-starting much of the ailing construction industry.