People question Paschal Donohoe about #Budget18 measures

People have been questioning Finance Minister Paschal Donohoe on yesterday's Budget.

They rang in to the Today with Sean O'Rourke programme on RTE Radio One with queries for the Minister on measures like the commercial stamp duty rise, the rise in social welfare payments and the sugar tax.

Fuel allowance

One listener raised concerns about the fuel allowance to Mr Donohoe.

He outlined his situation saying: "We are pensioners with an income €22 over the threshold, but our rent is not taken into account in the calculations." He explained that they lost their home during the economic downturn and asked: "Why is our rent not being taken into account for the fuel allowance?"

Yesterday's budget announced a €2.50 increase in the Telephone Support Allowance for those in receipt of the Living Alone and Fuel allowances.

Mr Donohoe said many of the payments are means tested in order to concentrate the money to those who need it the most, "but I am aware that at times some people just fall under and others fall outside it".

He said that the means tests are constructed in a way that is "fair to everybody, and we try to make it available in such a way that takes account of people's means".

He said: "I hope over time that there will be progress on the level of payment and the way the Government means tests it."

Commercial Stamp duty

Another caller, Enda from Carrick-on-Shannon, wanted Mr Donohoe to explain why raising commercial stamp duty from 2% to 6% would get the commercial sector going again.

Enda explained that he rents a restaurant on a long-term lease and has recently been given an option to buy it, but the Minister "with a stroke of a pen" has added €40k to him doing this.

The Minister said that his comment about getting the commercial sector going again referred to the time when stamp duty was reduced from 9% to 6% to 2% in the past.

He then gave his reason for increasing it, saying: "A 2% rate of stamp duty on a commercial property is a fraction of where we were in the past."

Mr Donohoe said the current rate of stamp duty was "unsustainably low". He said that previous governments have been reluctant to draw back concessions, put in place to get sectors going, but he said failure to do so now would result in income taxes rising.

He outlined that he has to have a broad base for taxation and the funding he will raise from it can be invested back into other things which he budgeted for.

The Irish Fiscal Advisory Council (IFAC) had raised concerns about relying on corporation taxes in June saying: “The Top 10 payers of corporation tax continue to play a substantial role, accounting for 37% of net corporation tax receipts in 2016. High concentration exposes these and overall revenues to volatility risk."

Social welfare

Malcolm from Tralee had a complaint to make about the €5 social welfare increase.

He said: "Our rent has gone up €100 this year to €600, but our €5 won't come in until next year. So, the €5 increase I get in six months time has already been absorbed.

"It is very mean-spirited."

The Finance Minister said the reason he has delayed the rise until the end of March, is to give the Government a chance to raise other allowances such as the Family Income Supplement, lone-parent payments and fuel allowance "for people who haven't experienced a rise before in many years".

He said: "When I make decisions, the people I have on my mind are the people who can't get off their knees."

Sugar tax

Pat Devine rang in with a query about the sugar tax. He explained that he is a non-drinker and has been a pioneer all his life, so he asked: "Why is the price of wine and beer not increased but my coke is?"

The Budget announced yesterday a 30 cent per litre tax will apply on drinks with more than 8g of sugar per 100ml, but the duty on wine and beer was unchanged.

Sean O'Rourke quipped that the Minister was "penalising clean living", but Mr Donohoe explained that the raise was for health reasons.

He said: "I am trying to encourage young people to be aware of health consequences of sugary drinks and also to encourage more manufacturers to reformulise their drinks."

Pension

Eddie McGoldrick from Donegal was a pensioner who wondered why the pension wasn't going up until March, but civil servants and TDs were getting their rise in early January.

The Minister said that the January rise for civil servants was part of the Lansdowne Road deal which had already been agreed, and went on to say that it is not a rise, but actually restoring civil servant wages part of the way to what it should be.

He went on to say: "The pay of TDs is anchored to that of civil servants, but members of Cabinet will not be benefitting from the rise."


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