Budget 2019 analysis

1. Budget 2019 Analysis
NERI Seminar
17th October 2018

2. There will be a large fiscal expansion in 2019
• Reduction USC1.7%
2.7%
2.4%
1.3%
0.2%
1.2%
1.6%
1.9%
1.7%
-2.7%-2.6%
-3.9%
-3.0%
-2.2%
-1.3%-1.1%
0.9%
1.1%
1.5%
0.8%
1.3%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
Budget Day Measures as % of Domestic Demand

3. Strong growth in Corporation Tax Receipts
• Reduction USC
0
1
2
3
4
5
6
7
8
9
10
2015 2016 2017 2018
Billion€
Corporation Tax
Actual Expected

4. Health spending continues to exceed
forecasts
• Reduction USC
0
100
200
300
400
500
600
700
800
2013 2014 2015 2016 2017 2018 (F)
Million€
Overruns in Health Spending

5. Capital Spending will grow by 24% next year
• Reduction USC
0
5
10
15
20
25
30
35
40
45
2016 2017 2018 2019 2020 2021
€billion
Cumulative exchequer capital spending plans 2016 to 2021
2015 Capital Plan NPF/Budget 2019

6. Tax cuts were modest
€(400)
€(200)
€-
€200
€400
€600
€800
€1,000
€1,200
€1,400
Gross Income
Change in amount of tax paid
Change in tax bill as a result of budget changes
Change in tax bill assuming 2.5% wage growth

7. Extra funding for Higher Education is welcome
• Reduction USC
6
7
8
9
10
11
12
13
14
€000'sperstudent
Higher Education Spending per student

8. Brexit Supports
A total of €110mn has been allocated across all of Government
for Brexit
Business supports include:
• funding for the enterprise agencies,
• a ‘future growth loan scheme’ and
• direct supports for Agri-Food companies

9. Competitiveness Challenge
The 9% VAT rate for tourism sector increased to 13.5%.
There was no increase in the Carbon Tax on Budget day
There was a 50c increase in the price of a packet of cigarettes
Betting duty increased

10. Further information:
Fergal O’ Brien
Director of Policy and Public Affairs
T: 0 1 605 1544
E: fergal.obrien@ibec.ie