CUTTING the cost of creating jobs and boosting the take home pay of low wage workers will be two of the main goals of today's Budget. The Minister for Finance, Mr Quinn, will also announce a package of income tax reductions' and special measures to tackle long term unemployment.
Reform of the PRSI system will be a central element of a Budget, which the Government will claim is sharply focused on the problems of unemployment and low pay.
Employers' PRSI rates now 9 per cent and 12.2 per cent are likely to be reduced and the amount of income to which the lower rate applies will be increased.
Business will gain from a new 30 per cent tax on the first £50,000 of profits. These measures are intended to benefit the small business sector and labour intensive industry in particular.
Employees' PRSI will also be reformed. The measure introduced last year to exempt the first £50 of income from PRSI is to be extended to the first £80 to £85. This will benefit all PAYE taxpayers, although the gains to better off workers will be limited by further reductions in the PRSI tax allowance.
In a further move aimed at the lower paid, the exemption limit below which no PAYE tax is paid is expected to rise from £71 a week to about £73.
Mr Quinn will allocate a further £80 million to a package of social welfare increases. Most recipients are expected to receive increases of about 3 per cent, although there will be considerable variations. Child benefit is expected to increase by £2 to £3 a month. There also will be further spending on a new retirement scheme for the defence forces.
The Minister will be able to spend close to £200 million on reductions in income tax, PRSI and business taxes, while still announcing an Exchequer borrowing [requirement of 2.2 to 2.3 per cent of Gross National Product. He will announce increases in personal allowances ahead of inflation and is expected to increase the standard income tax band by at least £500 for a single worker and £1,000 for a married couple.
The Budget also will include a range of measures aimed at tackling unemployment and particularly long term unemployment. Among these are expected to be a subsidy of about £80 a week for a business taking on a long term unemployed person.
Mr Quinn last night gave the Cabinet a final briefing on his Budget, writes Joe Carroll He will deliver the Budget speech after Question Time and Order of Business at about 3.45 p.m. and it will take about an hour.
An innovation this year will be the Budget's rapid availability on the Internet to international subscribers. It will be broadcast live on RTE radio and television.
