Cork Chamber Reflection on Budget 2018

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October 10, 2017
Cork Chamber Reflection on Budget 2018
Reacting to Minister Donohoe’s presentation of his first budget, Cork Chamber welcomed Budget 2018 as a steady step towards building a stronger Irish economy and society.

Commenting, Bill O’Connell, Cork Chamber President, said: “Overall we welcome the prioritisation of public investment over tax cuts and the return to a balanced budget, which will enable us to focus investment in the areas most needed going forward.”

“In a budget with limited funds available for additional spend, we feel it is appropriate that there is major focus on investment in our social infrastructure as this creates a supportive environment for business. Better health provision, increased resources for An Garda Siochána and education, as well as more affordable housing and childcare, must take centre stage in the Ireland we want to build for our future.”

Probably the most notable measures announced today from a business perspective is Government’s Brexit package, Mr. O’Connell added. “In particular, we are pleased to see support for our tourism sector, which in Cork alone employs over 21,000 people, through additional funding for marketing Ireland overseas, while also retaining VAT at 9% which our members have come out strongly in favour of.”

“The commitment to helping our SMEs and agri sector diversify their business, innovate and remain competitive amidst global political change and currency volatility through a new Government backed loan is also positive, as is increased funding for recruitment of staff representing Irish interests overseas.”

“On the tax front, we do not feel the move to further progress tax equalisation between self-employed and PAYE workers has gone far enough. While the rise in the earned income tax credit by €200 to €1150 represents progress, we had hoped to see this credit move towards €1600 at a greater pace as previously committed by Government. Also, self-employed individuals continue to be burdened with a 3% higher USC rate which is unbalanced and must be tackled.”

Cork Chamber’s budget submission specifically encouraged a reduction in the marginal tax for all employees and an increase to the entry point for the higher rate of tax. “The move by Government to address Ireland’s high marginal tax rate is welcome. This imbalance is something we have called for in previous years, not just to make work pay, but to ensure that Ireland becomes a more attractive place for the best talent and the most innovative companies to find a home.”

“In the context of growing urbanisation, longer commute times, and an ambition of making our regional cities better places to live, we believe the focus on climate change mitigation should have gone further, and we would have hoped to see more ambition under public transport particularly outside of Dublin”, the Chamber president continued.

Housing remains a key priority for business in Cork. “The decision to allocate another €75m towards the Local Infrastructure Housing Activation Fund is promising for the future delivery of more housing in Cork. The €750m Homebuilding Finance Ireland Fund to help builders is also encouraging and something that should hopefully assist new supply. However, in recognition of continually rising rents and the social and economic impact this is having across Ireland, we had expected fiscal measures to stimulate more urban purpose-built rental accommodation to meet the growing demand for affordable rental properties.”

“The commitment to double capital investment by 2021 is something our members are strongly in favour of. One of the main priorities we want to see is additional State funding to ensure the development of the Cork Events Centre which is now at a critical juncture. We look forward to gaining clarity on whether this and other key projects such as the M20/Northern Ring Road, the M28 and the N22 will move forward when the National Investment Plan is announced later this year”, Mr. O’Connell continued.

“The return to a balanced budget is also very significant for the future, as Ireland will now be living within its means instead of borrowing for day-to-day expenditure. Finally, the affirmation of Government commitment to Ireland’s Corporate Tax at 12.5% is welcome to provide certainty given the external focus on this area in recent weeks”, he concluded.