Budget 2002 Budgetary Objectives


         To develop our infrastructure

         To improve public services and promote equity

         To encourage enterprise and investment, and

         To do so in a way that sustains fiscal policy  

         The Budget:

         Safeguards the vulnerable in society

         Prioritises our needs and

         Continues to invest for the future

Summary of Economic Outlook  

         Economic growth (GDP) at 3.9% next year

         Employment up by about 1.5% annually to 2004

         Inflation falling next year to 4.2% and to 2¼% by 2004

         Exchequer Surplus and General Government Surplus in 2002

         Increase in net current spending and net capital spending of 10½% in 2002

 

Personal Taxation Measures  

  • €634 million in personal tax reductions
  • Basic personal tax credit increased by €123 to €1,520 
  • PAYE tax credit increased by €152 to €660
  • Tax Relief focused on helping low paid
  • Entry point to tax system raised from €183 (£144) at present to €209 (£165) i.e. 90% of current minimum wage. 
  • Income Tax exemption limits for 65 and over increased by over 20% to €13,000 single or widowed / €26,000 married
  • Further widening of the single standard tax rate bands by €2605 to €28,000
  • 79,000 low income earners removed from the tax net and 57,000 taken off the higher rate
  • Increases in tax credits for incapacitated children, the blind and the widowed Substantial increase in tax allowance for employment of a carer

 

Business Taxation Measures  

Top rate of Employers PRSI cut from 12% to 10¾% from 1 March 2002

The standard rate of corporation tax on trading profits will fall to 16% from 1 January 2002

Over the next five years Corporation Tax payments will move to a current-year basis

Improved loss relief provisions for companies on their trading and non-trading income

Business Expansion Scheme and Seed Capital Scheme reliefs increased and extended to end- 2003

Tax measures to help farmers with restocking after Foot and Mouth Disease  

 

Indirect Taxation  

Standard rate of VAT up by 1% point to 21% from 1 March 2002

Excise duty on petrol and diesel up by 5p per litre (inclusive of VAT) from midnight 5 December

Excise duty on cigarettes up by 10p per packet of 20 (inclusive of VAT) from midnight 5 December

Excise duty on cider increased to the same level as that for beer

Betting tax cut from 5% to 2% from 1 May 2002

 

Housing Related and Other Tax Measures 

Interest relief on rented residential property restored and stamp duty rates for investors reduced

Deadlines for Urban and Rural Renewal, Student Housing, Park and Ride, and Multi-storey Car Park Schemes extended by two years

Tax relief for donations to Sports Organisations for capital projects

 

Children  

 Child Benefit monthly payments to increase by £25 (1st and 2nd children) to £92.62 per month and £30 (3rd and subsequent children) to £116 from April 2002

From next year, a family with 4 children will be receiving over £417 per month in Child Benefit

 Back to School Clothing and Footwear Allowance for children aged 12 and over increased to over £94 from June 2002

Capital Expenditure  

€550 million for capital spending including:

€146 million for local authority and social housing

€100 million for road improvements

€44 million for public transport development

€55 million for primary and secondary school buildings

€45 million for Health and Children

 

Current Expenditure

€1.68 billion gross current spending including:

€970 million for Social Welfare

€385 million for Health and Children

 

Social Welfare Measures

Maximum weekly personal rates for old age and related pensions increased by at least £10 per week from January 2002

Over 66 rate of Widow(er)'s (Contributory) Pension increased by £12 per week

Maximum weekly personal rate for recipients under 66 years increased by at least £8 per week

Short term Unemployment Assistance and Supplementary Welfare Allowance increased by over £9.50 a week from January 2002

Qualified Adult Allowance payments increased by between £8 - £10 per week from January 2002

Family Income Support income thresholds increased

Widowed Parent Grant almost doubled to just under £1,970 from 5 December

National Fuel Scheme allowance increased by £2.09 to over £7 per week from January 2002

Further increase in the income disregards for means test for Carers Allowance from April 2002

Annual respite care payment increased to £500

Number of free units available under the Free Electricity Allowance increased by 20%

Qualification criteria for the Free Telephone Allowance relaxed

Extension of the Free Travel Companion Pass to invalidity pensioners from May 2002