Donohoe dismantles couch to find €1.2bn for budget

The various tax increases announced by Minister for Finance Paschal Donohoe in Tuesday's budget provided some social media users with the usual ammunition for witticisms.

Images were thrown up of some poor unfortunate on a sunbed – cigarette in one hand, can of Coke in the other – negotiating the sale of their commercial property portfolio on the hands-free.

All in all, though, Donohoe’s first budget with the reins of the Department of Finance in his grasp was pretty well received. The Government splurged €1.2 billion in new spending and tax cuts, split on roughly a 2:1 basis in favour of spending.

The most significant measure was a tripling of commercial stamp duty from 2 to 6 per cent. The move is expected to net the exchequer €376 million per annum and ranks as the single largest revenue-raising measure.

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It will pay for the bulk of the cuts to universal social charge (USC) and income tax, which will benefit the so-called squeezed middle and low-income earners most. It is projected that families and individuals are set to save up to €468 a year come January.

The biggest gains look set to go to those earning less than €14,500 on the minimum wage, the self-employed and one-income families, while medical card holders and those aged over 70 will continue to enjoy a reduced rate of USC for another two years.

Donohoe increased the threshold at which people start paying the higher rate of tax of 40 per cent, but the scale of the increase was lower than expected, at €750 rather than €1,000, or 0.25 of a per cent.

It means that someone can now earn €34,550 before they start paying the higher rate of tax, while the threshold will rise from €42,800 to €43,550 for married one-earner couples. This will cost the exchequer €132 million on an annual basis.

A tax on sugar-sweetened drinks will, from April, be applied at a rate of 30 cent per litre on drinks with 8g of added sugar per 100ml. Elsewhere, the VAT rate on sunbeds increased from 13.5 per cent to 23 per cent, while the price of 20 cigarettes has gone up 50 cent.

Funds allocated to tackle housing crisis

One of the biggest challenges facing the Government remains the housing crisis, and there was pressure on Paschal Donohoe to deliver something meaningful in his budget speech to alleviate the crippling pressure on struggling families and services.

He said he was allocating more than €1.8 billion for housing next year, with 3,800 new social houses to be built by local authorities and approved housing bodies.

There is to be an additional €149 million for the housing assistance payment, which will enable an additional 17,000 households to be supported and accommodated next year, and a €116 million spend on homelessness, up by €18 million on this year.

Donohoe also provided a further €500 million for direct building which he hopes will lead to an additional 3,000 new-build social houses by 2021 in addition to the existing 47,000 target.

A new agency, Home Building Finance Ireland, is to be created to use the National Asset Management Agency’s experience and provide cheap loans to developers. It is to get €750 million from the Irish Strategic Investment Fund.

INM boardroom saga ends

It was a case of pistols at close of business on Thursday as a long-running boardroom saga at Independent News and Media (INM) was brought to an end.

It was just after 5pm – when the stock market closed – that the media giant released a short statement outlining the exit of chief executive Robert Pitt following an extraordinary spat with chairman and Denis O'Brien lieutenant Leslie Buckley.

The row centred on a bid by INM (of which O'Brien is majority shareholder) for Newstalk, which is owned by O'Brien's Communicorp. Buckley had wanted to opt for a higher valuation for the radio station, while Pitt was dead set on a lower one.

Pitt made a protected disclosure to the Office of the Director of Corporate Enforcement over the matter, and an investigation is ongoing. It is understood Pitt is to get a sizeable exit package; the company has made a provision of up to €2 million internally to pay for senior management departures.

Good news for tech giants

There was much whooping in the west this week as the Commercial Court rejected two judicial review challenges to Apple’s planned €850 million data centre.

Objectors to the plans are said to be considering whether to appeal the ruling, but neither they nor Apple have made any public comment with regard to their plans from here. Athenry residents and business groups welcomed the decision.

The Apple case has been the poster boy for a barrage of criticism of the State's planning structures, but there was good news also for global tech giant Intel, which was granted planning permission for a manufacturing facility at its Leixlip, Co Kildare, facility.

It was confirmed by An Bord Pleanála on Monday that the company's application for a two-storey development, which will provide almost 90,000sq m of additional floor space to its existing campus, has got the go-ahead.

Elsewhere, two of the world’s biggest engineering companies chose Ireland to test out new wind power technology that can deliver smooth flows of clean energy to data centres.

Microsoft signed a 15-year deal with General Electric to buy all the electricity generated at a new 37-megawatt wind farm in Co Kerry, which will power its growing cloud services unit in Ireland.

Brexit talks hit ‘disturbing’ impasse

European Union chief negotiator on Brexit Michel Barnier looks like a man who'll be booking a long holiday when the talks with Britain finally conclude.

Facing the media this week following the latest round, he talked of a “disturbing” impasse. Fears are growing in Dublin that political uncertainty in Westminster and growing impatience in the EU are together increasing the prospect of a very hard Brexit.

Meanwhile, the Government rejected a report that the Republic has little chance of hosting either the European Medicines Agency or the European Banking Authority after Brexit.

A plethora of announcements have come in the past few months with banks and other financial institutions signalling their relocation intentions in the aftermath of Brexit. A clear winner appears to be Frankfurt, but Dublin hasn’t done too badly.

Mind you, the State is nearing full employment anyway. Outside of construction, employment in Ireland is now higher than its pre-crisis peak, according to the Central Bank.

Finally, Paschal Donohoe unveiled a €300 million Brexit loan scheme at rates of about 4 per cent for small businesses as they deal with the fallout.