CRUCIAL pre-Budget figures published today show the Government can afford to announce one of the most generous Budgets next week and still hold borrowing below the Maastricht limit.
The latest figures, contained in a pre-Budget White Paper, show that the current surplus, before account is taken of tax and spending changes next Wednesday, is forecast to be £471 million this year. This is even more than many commentators had predicted and clears the way for a giveaway Budget.
As a result, Mr Quinn will be able to afford a liberal package. And he will still be the first Minister for Finance in recent years to aim for a current Budget surplus effectively a surplus on the day-to-day running of the State - in his Budget speech.
Mr Quinn is likely to spend up to £290 million on Budget day on tax cuts and another £115 million on social welfare increases. However, some extra money will be raised through increased excise duties and revenue from increased consumer spending.
The main elements of the Budget are expected to be:
. a 1 per cent cut in the standard rate band from 27 to 26 per cent;
. a 1 point cut in the employees' PSRI rate from 5.5 to 4.5 per cent;
. a 2 point cut in corporation tax to 36 per cent and a similar cut in the lower 30 per cent rate;
. a £200-£250 increase in personal allowances for a single person (£400-£500 for a married couple), removing more income from the tax net;
. a £400-£500 increase in the standard income tax band for a single person;
. a £1 rise in child benefit for firsts and second children, £6 for third children and above;
. the income rate at which the lower employers' PRSI is applied to be increased to about £13,500;
. no change in alcohol duty, some increase for cigarettes but less than last year's 10p;
. petrol to rise by no more than 1p or 2p a litre;
. increases in special tax allowances, such as the dependent relative allowance, the blind person's allowance and the old age allowance.
Other measures which may be included are an increase in the exemption income limit below which no tax is paid, as well as changes to enable more people to claim family income support. Tax incentives to encourage employee share ownership are also expected.
However, the continued reduction in mortgage tax relief will cut the overall benefit of the Budget for many will also be helped by a special package including higher capital allowances.