Irish budget to be unveiled amid spectre of looming no-deal Brexit

Efforts to absorb the impact of a no-deal Brexit in Ireland have made striking a budget particularly challenging, the Irish Finance minister has said.

Paschal Donohoe will outline the Government’s spending plans for coming year in the Dail parliament in Dublin at lunchtime.

It has been based on the anticipated gloomy financial outlook if the UK leaves with EU without an agreement on October 31.

Businesses set to be negatively impacted by the disruption are in line to receive government support to help them to weather the Brexit storm.

Brexit
A group walking near Castlederg, Co Tyrone, as they traverse a former smuggling route covering both sides of the Irish border (Michael McHugh/PA)

The budget is also expected to include measures to tackle climate change, including a hike in carbon tax.

Arriving at Government Buildings in Dublin on Tuesday morning, Mr Donohoe said there would be “no surprises” and most of the key features of the plans were already in the public domain.

The Finance minister said Ireland’s main opposition party Fianna Fail, who keep his Fine Gael-led government in power through a confidence and supply arrangement, had been “constructive” participants in striking the budget.

“This was particularly challenging budget because of the need that we have to make some changes before Brexit combined with the inevitable political challenges that emerge in this being the final budget of this Dail did make it a challenging process,” he told reporters in Dublin.

Mr Donohoe added: “It’s fair to say at this point there will be absolutely no surprises in this budget.”

The minister said he understood the concerns that some people might have in relation to a rise in carbon tax, particularly those with limited access to public transport.

He insisted funds raised through carbon taxation would be reinvested either to offset the impact of the measures or on policies aimed at tackling climate change.

Irish premier Leo Varadkar has said Budget 2020 will limit the impact and risks of Brexit on the economy.

He has denied suggestions it will be an austerity budget or that there would be cutbacks.

Focus will be on the Government’s Brexit contingency plans and what measures will be introduced weeks before the UK is due to leave the European Union.

Mr Donohoe has said that the State’s budget for a no-deal Brexit is to give certainty to businesses and people and to safeguard the national finances.

There we go, all set for #Budget2020pic.twitter.com/aJMslPEIS5

— Paschal Donohoe (@Paschald) October 7, 2019

He has also ruled out a supplementary budget after Brexit happens, despite a warning from the Economic and Social Research Institute (Esri) which said a no-deal posed risks of a recession and advised an additional budget may be needed.

Carbon tax is taxed at 20 euro per tonne of CO2 emissions. It’s expected to increase by around seven euro per tonne.

TDs have called for increases in the carbon tax to be “ring-fenced” for environmental projects.

A number of opposition TDs have warned about the impact of the changes on people living in rural Ireland.

Last-minute talks were being held with Fianna Fail TDs on Monday evening to rubber stamp the plans for next year’s budget.

It emerged that around 50,000 people over the age of 70 will be eligible for medical cards, which provide access to free healthcare, as part of the budget plans.

Mr Varadkar previously suggested that there could be some changes to income tax adding that any changes would be “minimal”.

Pensioners are not expected to get a five euro top-up in the budget, despite calls for it to be increased by seven euro by a number of charities.

Alone, which helps thousands of elderly people across Ireland, said that more than 63,000 people over the age of 65 experience enforced deprivation.

It is also expected that the help-to-buy scheme is to be extended for another year.

The scheme allows first-time buyers to access around 20,000 euro for homes costing up to 500,000 euro.

The Brexit budget is to be unveiled by Mr Donohoe at 1pm in the Dail.

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