Blind Persons:
Single	€1,760	€1,830
Married (both blind)	€3,520	€3,660
Incapacitated Child	€3,000	€3,660
Age Credit:
Single	€275	€325
Married	€550	€650

Health Levy thresholds increased from €480 per week to €500 per week and from €24,960 per annum to €26,000 per annum

PRSI threshold increased from €339 per week to €352 per week

Total

582

Further details of the main income tax elements of the package are set out in Annex A

[1]Costs rounded to the nearest €1 million in each case as appropriate

OTHER INCOME TAX

Mortgage Interest Relief

The current annual ceiling on the amount of interest that can be allowed on a mortgage is being increased with effect from 1 January 2008 for first-time buyers from €8,000/€16,000 single/married to €10,000/€20,000 single/married. The additional relief will be available for the first seven years for which there is an entitlement to mortgage interest relief.

This measure is estimated to cost €20 million in 2008 and in a full year.

Allowance for Rent Paid by Certain Tenants

The maximum level of rent paid for private rented accommodation on which tax relief can be claimed, at the standard rate of tax, is being increased. For those aged under 55 years of age, it is being increased from €1,800 to €2,000 per annum for a single person and from €3,600 to €4,000 per annum for widowed and married persons. This equates to a tax credit of €400 per annum for single persons and €800 for widowed and married persons under 55 years of age.

For those aged 55 years and over, the maximum level of rent paid on which tax relief can be claimed is being increased from €3,600 to €4,000 per annum for a single person and from €7,200 to €8,000 per annum for widowed and married persons. This equates to a tax credit of €800 per annum for a single person and €1,600 per annum for widowed and married persons over 55 years of age.

This measure is estimated to cost €7.0 million in 2008 and €9.7 million in a full year.

Rent-a-Room Scheme

The limit of the exemption from income tax which applies to rent received, where a person rents out a room or rooms in his or her principal private residence, is to be increased from €7,620 to €10,000.

This measure is estimated to cost €0.6 million in 2008 and €0.8 million in a full year.

Business Expansion Scheme

The requirement that recycling companies must have received grant assistance before availing of the Business Expansion Scheme (BES) is to be replaced by a requirement that their business proposals must be certified by an industrial development agency or County Enterprise Board before they avail of the scheme. As the BES is an approved State aid, it will be necessary to advise the European Commission of this proposed change.

The cost of this change is not expected to be significant.

Tax Relief on Trade Union Subscriptions

The standard-rated tax allowance in respect of subscriptions paid by members of trade unions is to be increased from €300 to €350 per annum. This is equivalent to a tax credit of €70 per annum.

This measure is estimated to cost €2.1 million in 2008 and €2.9 million in a full year.

Increase in the Specified Rates for Preferential Home Loans and Other Loans

An employee in receipt of a preferential loan is charged income tax on the difference between the interest actually paid and the amount which would have been payable at the “specified” rates of interest for the loans. To reflect increases in interest rates, the specified rate in respect of home loans is being increased from 4.5% to 5.5 % and the specified rate in respect of other loans is being increased from 12% to 13%. These changes will take effect from 1 January 2008.

The expected yield from this measure is €3 million in 2008 and €4 million in a full year.

EU Tax Issue

Following discussions with the European Commission, the tax treatment of investment income and income attributable to the exercise of foreign employments outside the State will extend to UK-sourced income. The Finance Bill will extend the relevant treatment from 1 January 2008.

This measure is estimated to cost in the region of €15 million in 2008 and in a full year.

Extension of S481 Film Relief

The current provisions in relation to the tax relief for investment in films are due to terminate on 31 December 2008. The scheme will be renewed for another 4 years to 31 December 2012. Any revisions that may be necessary to the scheme will be provided for in Finance Bill 2008.

The estimated cost of extending the existing measure is about €37 million per annum.

PRSI CHANGES

Employee PRSI annual ceiling

As from 1 January 2008, the PRSI contribution ceiling will increase from €48,800 to €50,700.

This is in accordance with the assumption made for PRSI income as set out in the Pre-Budget Outlook.

Employee PRSI weekly threshold

As from 1 January 2008, the employee weekly threshold for liability to PRSI will increase from €339 to €352.

This measure is estimated to cost €11.5million in 2008 and €12.5million in a full year.

VAT

VAT Registration Thresholds for SMEs

The VAT registration thresholds for small businesses are being increased from €35,000 to €37,500 in the case of services, and from €70,000 to €75,000 in the case of goods. These increases will take effect from 1 May 2008. This will reduce the administrative burden for small businesses. It could remove some 2,700 companies from the VAT net.

This measure is estimated to cost €10 million in 2008 and €20.5 million in a full year.

Reduced VAT rate for certain agricultural inputs used to produce bio fuel

The VAT rate on the supply of elephant grass rhizomes, seeds, bulbs, roots and similar supplies used for the agricultural production of bio-fuels will be reduced from 21% to 13.5% with effect from 1 March 2008. The measure will assist in the development of agricultural production of such fuels.

The cost of this measure is not expected to be significant.

Review of VAT on Property Transactions

A review of the current system of applying VAT on property transactions has been carried out. Provision will be made in the Finance Bill for the introduction of a new system for applying VAT to property transactions. The changes are designed to simplify the rules for VAT on property, while ensuring a more equitable treatment for taxpayers. The new rules, which are outlined in Annex E, will apply to both commercial and residential property supplied in the course of business. The VAT charge on sales of residential property is unchanged. The new system will take effect from 1 July 2008.

It is estimated that this measure will be Exchequer neutral.

Reverse charge mechanism in the Construction Sector

A reverse charge mechanism for VAT on supplies made by a subcontractor to a principal contractor in the construction sector is being introduced with effect from 1 September 2008. This is a simplification measure. This measure will be the subject of consultation with the construction sector and the details will be outlined in the Finance Bill.

This measure will result in an estimated once-off cash flow yield of €50 million in 2008, but will not increase the overall tax bill of the taxpayers concerned.

TAXATION IN RELATION TO CARS

Vehicle Registration Tax (VRT) to take greater account of CO2 emission levels

The current VRT system uses engine size as the criterion to determine the VRT rate to be applied to a car. Under the revised VRT system the CO₂ emissions of a car will replace engine size as the criterion to determine the VRT rate payable on the car at point of registration. Lower emission cars will attract reduced VRT rates and higher emission cars will be liable to higher rates. The VRT rates will continue to be applied to the Open Market Selling Price of the car. The revised VRT system will take effect on 1 July 2008.

The following Table sets out the CO₂ Emission Bands and the relevant VRT rates under the revised VRT system.

CO₂ Emissions Bands	g CO₂/km	VRT Rates
A	0 - 120g	14%
B	121 - 140g	16%
C	141 - 155g	20%
D	156 - 170g	24%
E	171 - 190 g	28%
F	191 - 225g	32%
G	226g and over	36%

Further information is provided in Annex D.

Vehicle Registration Tax (VRT) Relief Scheme for Hybrid Electric and Flexible Fuel Vehicles and VRT exemption for Electric Vehicles.

The existing 50% VRT relief scheme for series production hybrid electric vehicles and flexible fuel vehicles expires on 31 December 2007. The scheme is being extended in its current form from 1 January 2008 until 30 June 2008, at which point the revised VRT scheme based on CO₂ emissions will be implemented. From 1 July 2008 the relief for series production hybrid electric and flexible fuel cars will be adjusted to provide a relief of up to €2,500 on the VRT payable, in addition to the benefit of the new VRT CO₂emission related system. This relief will apply until 31 December 2010.

Series production electric cars (i.e. cars which can be propelled solely by a rechargeable battery) and electric/battery-assisted bicycles are being exempted from VRT with effect from 1 January 2008.

Capital Allowances (and Expenses) for Business Cars

A revised scheme of capital allowances and leasing expenses for cars used for business purposes is being introduced. The revision will link the availability of such allowances and expenses to the CO₂ emission levels of the vehicles. Cars will be categorised by reference to CO₂ emissions with the emissions bands being broadly consistent with the new VRT system, as follows:

Category A

Vehicles

Category B/C

Vehicles

Category D/E

Vehicles

Category F/G

Vehicles

0-120g/km

121-155 g/km

156-190g/km

191g/km +

Cars with CO₂ emission levels in Category A/B/C above will benefit from capital allowances at the current car value threshold under the existing scheme of €24,000, regardless of the cost of the car. Cars in Category D/E will receive allowances of 50% of the current car value threshold or 50% of the cost of the car, if lower. Cars in Category F/G will not qualify for capital allowances.

As regards leasing expenses, cars in Category A/B/C will benefit from a proportionately higher deduction than the actual leasing expenses where the cost of the car is less than €24,000. Cars in Category D/E will get 50% of the leasing expenses they would otherwise benefit from under the current scheme. Cars in Category F/G will not qualify for a deduction for leasing expenses.

The revised scheme will come into effect in respect of cars purchased or leased on or after 1 July 2008.

The impact of these three changes is considered to be broadly Exchequer neutral.

New Motor Tax Rates and Fees for Trade Licence Plates

In order to support funding for local authorities, the Budget provides for increases in motor tax rates and fees for trade licence plates. The most recent increase in motor tax rates took effect from January 2004. It is significant, therefore, that it has been four years since that increase.

The proposed increases are 9.5% for cars below 2.5 litres and 11% for cars above that threshold. Goods and all other vehicles will also increase by 9.5% with no increase for electric vehicles. Trade plate licences will also increase by 9.5%. The increases in motor tax rates must be viewed against the background that since the beginning of 2004, inflation has increased by over 15%. The increases provided for in the Budget are clearly well below inflation over the four year intervening period. The new rates will apply to motor tax discs and trade licences taken out for periods beginning on or after 1 February 2008.

The proceeds of motor tax are paid directly into the Local Government Fund. This Fund, which was established under the Local Government Act 1998, is ring-fenced exclusively for local government. The motor tax paid into the Fund is supplemented on an annual basis by an Exchequer contribution. The Fund is used primarily to finance non-national roads and the general purpose needs of local authorities.

Details of the new rates are set out in Annex F.

This measure is estimated to yield about €83 million in a full year.

EXCISES

Tobacco Excise

The Excise Duty on a packet of 20 cigarettes is being increased by 30 cents (including VAT) with a pro-rata increase on other tobacco products, with effect from midnight on 5 December 2007.

This measure is estimated to yield €1.2 million in 2007 and €63 million in 2008.

Alcohol Licensing Regime

Licensing fees for Off-licences are being increased from €250 per licence to €300 per licence with effect from 1 October 2008.

This measure is estimated to yield €0.2 million in 2008 and €0.3 million in a full year.

Excise on Electricity

Under the EU Energy Tax Directive all Member States are required to introduce an excise tax on electricity. In Ireland’s case this must be done in 2008. From 1 October 2008 the following EU minimum rates will apply; 50 cents per megawatt hour (MWh or 1,000 units) for business use and €1 per megawatt hour for non-business use. However, electricity used by households will be exempt from the new charge as will electricity produced from renewables and combined heat and power generation. Energy products and electricity used to produce electricity are also being exempted from excise taxation. The overall cost and impact on electricity prices for business will be marginal.

This measure is estimated to yield €0.25 million in 2008 and about €1 million in a full year.

FARMER TAXATION

Farmer’s flat rate addition

The farmer’s flat rate addition is being maintained at 5.2% for 2008. The flat rate is designed to recoup non-VAT registered farmers for the VAT they incur on their inputs.

Tax Relief on the Dissolution of Farm Partnerships

A new relief from Capital Gains Tax on the dissolution of farm partnerships will be introduced in the Finance Bill. The relief will run for a period of 5 years and full details will be contained in the Finance Bill.

This measure is estimated to cost around €5 million in 2008 and in a full year.

Milk Production Partnerships

Where a farmer on income averaging enters a milk production partnership the provisions that can result in a clawback of income tax will no longer apply.

This measure is expected to be broadly Exchequer neutral.

Sugar Beet Diversification

Provision is being made to allow farmers in receipt of the Diversification Aid element of the Sugar Beet Compensation Package to spread these payments over six years for the purposes of calculating taxable income.

This measure is expected to cost €9.6million in 2008. After 2008 the measure will have positive Exchequer implications, as the tax deferred in respect of payments for 2007 and 2008 is received.

CORPORATION TAX

Preliminary Tax payment arrangements for Small Companies

Small companies have the option of paying their preliminary tax at the lower of 90% of the final liability of the current accounting period or 100% of the final liability of the previous accounting period. The Corporation Tax liability threshold for treatment as a small company is being increased from €150,000 to €200,000. This will be effective from preliminary tax payment dates arising after 5 December 2007.

Preliminary Tax payment arrangements for Start-up Companies

Under the measure introduced in last year’s Budget, new or start-up companies with a Corporation Tax liability of €150,000 or less, for their first accounting period are not required to pay preliminary tax in respect of that first accounting period. The tax liability threshold under this arrangement for new or start-up companies is also being increased to €200,000 and this change will also be effective from preliminary tax payment dates arising after 5 December 2007.

International Financial Reporting Standards (IFRS) Rule

Transitional arrangements which relax the interest charge on underpaid preliminary Corporation Tax for companies in very specific circumstances for certain companies whose accounts are based on International Financial Reporting Standards (IFRS) will be changed in the Finance Bill so that these arrangements can be used on a permanent basis.

The above measures will result in a cash flow cost of €1 million in 2007 and a full year cash flow cost of €6.5 million in 2008.

Tax Credit scheme for Research and Development Expenditure

The base year for expenditure which is used to calculate the qualifying incremental expenditure on research and development (R&D) under the tax credit scheme is being fixed at 2003 for a further 4 years to 2013. The change will provide an additional incentive for increased expenditure on R&D in future years and it will offer more certainty to industry in relation to the tax credit scheme.

It will be necessary to inform the European Commission about these changes from a State Aid perspective.

The cost of this change is estimated to be €60 million in a full year.

STAMP DUTY

Reform of the Charge to Stamp Duty on Residential Property

The current Stamp Duty system applicable to residential property is being reformed.

A simplified system, incorporating an exemption of €125,000 with 2 progressive rates instead of the existing 6 rate bands, is being introduced with immediate effect.

Transactions not exceeding the €125,000 exemption level will not be liable to Stamp Duty. For amounts above this €125,000 exemption level, but not exceeding €1 million, Stamp Duty will be charged at 7% on the excess over €125,000. Where the property exceeds €1 million, the part in excess of €1 million will be charged at 9% with the remainder between €125,000 and €1 million subject to a 7% charge.

In addition, properties with a value in excess of €125,000 but not exceeding €127,000 will not be liable for stamp duty.

This change will take effect in respect of instruments which are required to be presented to the Revenue Commissioners for stamping no later than 5 December 2007. Instruments which are executed in the 30 days prior to 5 December 2007 will therefore benefit from this change.

Current exemptions in relation to first time buyers and buyers of new homes will continue to apply.

More information on this reform is contained in Annex G.

This measure will cost €190 million in a full year with a minor cost in 2007.

Claw-back of Relief for First-time Purchasers and other Owner-Occupiers

An exemption from Stamp Duty is generally available for first-time owner-occupying purchasers of new or second-hand dwelling houses or apartments. There is also an exemption available for other owner-occupying purchasers of new dwelling houses or apartments under 125m². In addition, partial relief is also available to owner-occupying purchasers of new dwelling houses or apartments over 125m². These exemptions/reliefs are clawed-back where the purchaser rents out the dwelling house or apartment, other than under rent-a-room arrangements, within 5 years of the date of the deed of transfer giving effect to the purchase.

This claw-back period is being reduced for all three reliefs from 5 to 2 years for deeds of transfer executed on, or after, 5 December 2007. For deeds of transfer executed before 5 December 2007, to the extent that a dwelling house or apartment is rented out on, or after, 5 December 2007, it will not involve a claw-back of relief where this happens in the third, fourth or fifth year of ownership.

This measure is estimated to cost €4 million in 2008 and in a full year.

Financial Cards

Changes are being made to the Stamp Duties applicable to ATM/Debit cards, charge cards and credit card accounts. The rate changes are summarised as follows:

Description	Current	New
Charge cards & credit card accounts	€40	€30
ATM cards	€10	€5
Debit cards	€10	€5
Combined ATM/Debit cards	€20	€10

The charges for ATM/Debit/Combined cards will take effect on the year ending 31 December 2007 and for Credit cards for the year ending 1 April 2008.

In addition, commencing in 2008, financial institutions will be required to make a preliminary payment in December of each year, of the Stamp Duties on financial cards due to be paid in the following year. This payment will be based on 80% of their Stamp Duty liability for the previous year. The date on which customers are charged will not be changed.

These changes will give rise to a cash flow gain of €20 million in 2008 and will cost €40 million in a full year.

Bills of Exchange (including Cheques)

The Stamp Duty rate on Bills of Exchange is being increased from 15 cent to 30 cent in respect of Bills of Exchange drawn on, or after, 6 December 2007. In the case of cheques, the increase will apply in respect of cheques supplied by financial institutions to customers on, or after, 6 December 2007.

These measures are estimated to yield €1 million in 2007 and €17 million in 2008 and in a full year.

STAMP DUTY & CAPITAL GAINS TAX

Increase in Site to Child Exemption from Stamp Duty and Capital Gains Tax

The existing Site to Child relief from Stamp Duty and Capital Gains Tax provides an exemption under both taxes on sites with a market value not exceeding €254,000, where a parent transfers the site to a child for the purposes of constructing the child’s principal private residence. The exemption threshold of €254,000 is being increased to €500,000. This change will take effect in respect of disposals made on or after Budget day.

This measure is estimated to cost around €10 million in 2008 and in a full year.

FISHING INDUSTRY

Tax Relief on Fishing Vessel Decommissioning Payments

Provision will be made for amending the taxation code to assist the take-up of the decommissioning scheme to support the restructuring of Ireland’s fishing fleet. Details will be contained in the Finance Bill.

It is not possible to estimate the cost of this measure but the cost should not be significant.

SECTION II - EXPENDITURE MEASURES

Note: The expenditure information provided below should be read in conjunction with the detailed Estimates of Expenditure for 2008 set out in Section I of this volume. Additional expenditure information is included in Section E (Budget 2008 Statistics and Tables), including details of the changes in the 2008 Vote allocations since the publication of the pre-Budget Estimates in the Pre-Budget Outlook in October, and the 2009 and 2010 expenditure projections arising from these Budget Estimates.

SOCIAL & FAMILY AFFAIRS

(See also Annex C, where the changes in maximum weekly rates of payment from January 2008 and increases in Child Benefit from April 2008 are shown.)

Gross Expenditure for the Department of Social & Family Affairs is €16.95 billion in 2008. The total cost of the social welfare improvements is €876.7 million in 2008 and €900 million in a full year[2].

Social Welfare Weekly Rates

Maximum weekly personal rates for all State Pension (Contributory), State Pension (Transition) and related social insurance pensions will increase by €14 per week from the first week of January 2008. For the State Pension (Non-Contributory), the maximum personal weekly rate will increase by €12 per week from the first week in January. Proportionate increases will apply for pensioners on reduced rates.

The maximum personal rate for Carer’s Allowance, Carer’s Benefit and Death Benefit Pension will increase by €14 per week and all other maximum personal rates will increase by €12 per week. There will be proportionate increases for people on reduced rates, from the first week of January 2008.

Maximum Qualified Adult Allowances (QAAs) will increase as follows:

· €11.60 per week for State Pension (Contributory), State Pension (Transition) and Invalidity Pension where the qualified adult is aged 66 or over. In addition, there is a further special increase for these persons (see item on Pensioners below);

· €9.30 per week for State Pension (Contributory) and State Pension (Transition) where the qualified adult is aged under 66;

· €7.90 per week for State Pension (Non-Contributory);

· €8.60 per week for Invalidity Pension where the qualified adult is aged under 66;

· €8 per week for all other QAA payments.

Proportionate increases will be applied where persons are in receipt of reduced rate QAA payments.

There will also be an increase of €14 per week, to €221.80, in the minimum rate of Maternity Benefit and Adoptive Benefit from January 2008.

The above increases will cost €697.1 million in 2008 and in a full year.

[2] €980 million, inclusive of improvements in Early Childcare Payment and improved social support payments in other areas (e.g. FÁS allowances).

Children

Child Benefit rates will increase by €6 per month for each of the first and second qualifying children, to €166 per month, and by €8 per month for each subsequent qualifying child, to €203 per month, effective from April 2008.

Maximum child dependant allowance rates will increase by €2 per week to €24 per week from January 2008. Proportionate increases will be applied where persons are in receipt of a reduced child dependant allowance payment.

Family Income Supplement income thresholds will increase by €10 per week in respect of each child, from January 2008.

The Back to School Clothing and Footwear Allowance will increase by €20 to €200 in respect of each child aged 2 to 11 years and by €20 to €305 in respect of each child aged 12 to 22 years where appropriate. This will be effective from June 2008.

The Widowed Parent Grant is being increased by €2,000 to €6,000 with immediate effect.

Additional funding is provided for the School Meals Programme.

These measures will cost €124.7 million in 2008 and €147.9 million in a full year.

Pensioners

An additional special increase of a maximum of €15.40 per week in the maximum rate of the Qualified Adult Allowance (where the qualified adult is aged 66 or over), to bring the rate to €200 per week, will be paid with a State Pension (Contributory), State Pension (Transition) or Invalidity Pension from January 2008.

The duration of payment of the National Fuel Scheme will increase by one week to thirty weeks commencing from April 2008.

These measures will cost €35.2 million in 2008 and in a full year.

People of Working Age

The Respite Care Grant will increase by €200 to €1,700 from June 2008.

The weekly income disregard for means assessment for the Carer’s Allowance scheme will increase to €332.50 (single)/ €665 (couple) respectively, from April 2008.

The upper income threshold for entitlement to the One Parent Family Payment will increase by €25 per week to €425 from May 2008.

A single reformed method for assessing Benefit and Privilege from parents’ income for the Jobseeker’s Allowance will be introduced from April 2008.

The annual grant payable as part of the Back to Education Allowance scheme will increase by €100 to €500 from September 2008.

Other miscellaneous measures, including an increase of €20 per week to €300 in the upper ceiling for entitlement to a tapered qualified adult payment for relevant schemes, will be introduced during the course of 2008.

These measures will cost €16.4 million in 2008 and €18.1 million in a full year.

Service Improvements

The Family Support Agency will be provided with additional funding for marriage, child and bereavement counselling, research projects and other services.

The Money Advice and Budgeting Service will be provided with additional funding for training and additional support to MABS companies.

Additional funding will also be provided for the Citizens Information Board.

These measures will cost €3.3 million in 2008 and €1.7 million in a full year.

The detailed 2008 Estimate for the Department of Social & Family Affairs is set out at page I.82.

HEALTH & CHILDREN GROUP

Gross Expenditure for the Health & Children Group, which includes the Department of Health & Children, the Health Services Executive, and the Office of the Minister for Children, is €16,156 million in 2008, an increase of some €374 million (€322 million Current and €52 million Capital) relative to the pre-Budget Estimate. The key improvements to be delivered with these resources, together with some savings from other areas, in 2008 and later years are as follows:-

· €110 million is provided for the introduction in 2008 of the new long-term residential care scheme – A Fair Deal;

· an additional €25 million for elder care – including the provision of home care packages and other community support services;

· further resources of €50 million are provided for the Disability sector, in line with the Budget 2005 multi-annual investment programme, towards services for people with disabilities;

· a further €46 million is allocated to fund an additional €100 per child up to and including the age of six under the Early Childcare Supplement;

· an additional €29 million to assist the roll-out of cancer services including the National Screening Services, Radiation Oncology Services, etc;

· €35 million to meet the estimated cost of awards arising in 2008 under the Lourdes Redress Scheme;

· an additional €18 million in 2008 (€30 million in a full year) towards Immunisation programmes;

· an additional €10 million for the National Treatment Purchase Fund;

· €12 million in 2008 (full-year cost €33 million) to fund innovative service delivery projects under the aegis of the HSE;

· €3.1 million for Health Allowances, providing an increase in line with those provided to social welfare recipients from January 2008;

· a total of €4.37 million is provided in 2008 in support of the following organisations: St Joseph's Foundation, Charleville (€1.5 million); Cystic Fibrosis Services, Beaumont Hospital (€2.5 million); Cúisle Centre, Portlaoise (€170,000) (all capital projects) and Hope House, Foxford (€200,000); and

· a further €47.5m investment for capital development.

The detailed 2008 Estimates for these bodies are set out at page I.85 (Department of Health & Children), I.87 (Health Service Executive) and I.89 (Office of the Minister for Children).

EDUCATION & SCIENCE

Gross Expenditure for the Department of Education & Science in 2008 is €9,326 million, an increase of €217.5 million (€104.3 million Current and €113.2 million Capital) relative to the pre-Budget Estimate. The key improvements to be delivered with these resources, together with some savings from other areas, in 2008 and later years are as follows:-

· further resources of €95.2 million for the Primary School Building Programme, to provide additional permanent school places in the rapidly developing areas;

· further resources of €12 million for research in Third Level Institutions to continue to roll out the Strategy for Science, Technology and Innovation;

· an additional €23.3 million in 2008 (€29.3 million in a full year) for increases in the grants paid to meet non-pay costs and other services in schools;

· an additional €21 million for school transport to meet increasing demands and costs associated with providing a service for about 135,000 primary and post-primary children, including over 8,000 children with special needs;

· an additional €18 million in 2008 (full year cost estimated to be €26 million) for Special Educational Needs, to cover additional appointments of Special Needs Assistants likely to arise due to the increasing number of students in the primary sector and the expansion of services at post-primary level;

· an additional €26 million for temporary accommodation in schools, to meet demands for short term accommodation arising from increased school enrolments, particularly in rapidly developing areas, pending the availability of the new permanent accommodation to be provided under the school building programme over coming years;

· an additional €25 million in Dormant Accounts Funding, to be used for a range of measures aimed at tackling Educational Disadvantage; and

· an additional €3 million for social inclusion measures, to provide < style='font-size:11.0pt;color:black'>500 additional Adult Literacy Places, 500 additional places under the Back to Education Initiative, and 100 additional Youthreach places.

The detailed 2008 Estimate for this Department is set out at page I.58.

JUSTICE GROUP

Gross Expenditure for the Justice Group of Votes, which includes the Department of Justice, Equality and Law Reform, An Garda Síochána, and the Prisons and Courts Services, is €2,696 million in 2008, an increase of €77.5 million (€53.7 million Current and €23.8 million Capital) relative to the pre-Budget Estimate. The key improvements to be delivered with these resources, together with some savings from other areas, in 2008 and later years are as follows:-

· €56 million (€35 million Current and €21 million Capital) in 2008 for An Garda Síochána to support a range of developments, including continued expansion of the Force to reach a figure of over 14,200 fully-attested Gardaí by end-2008, delivery of a modern communications system and other measures to support the fight against crime. The full-year cost of the Current element of this expenditure is €67 million;

· some €5 million for the Current side of the Department of Justice, Equality & Law Reform is provided as direct additional funding for social inclusion initiatives. This includes €4 million for the Office of the Minister of State for Integrationin further support ofprogrammes addressing the needs of migrant communities; as well as increased resources for Cosc – the National Office for the Prevention ofDomestic, Sexual and Gender-based Violence, andfor the National Women’s Strategy;

· additional resources of €5 million are being provided for the Legal Aid Board and tostrengthenthe Pathology and Forensic services; and

· €14 million (including €7.8 million Capital, of which €5 million has been sourced within the Vote for Justice, Equality & Law Reform) is being allocated to the Prisons Service for the building programme and the roll-out of a new communications system

The detailed 2008 Estimates for this group are included between pages I.47 to I.53.

ENVIRONMENT, HERITAGE & LOCAL GOVERNMENT

Gross Expenditure for the Department of Environment, Heritage and Local Government in 2008 is €3,198 million, an increase of €404 million (€94 million Current and €310 million Capital) relative to the pre-Budget Estimate. (These figures do not include expenditure on non-national roads and in relation to vehicle- and driver-licensing, functions which are transferring to the Department of Transport.) The key improvements to be delivered with these resources in 2008 and later years are as follows:-

· an additional €124 million is being made available for social housing. This will allow for progress to be maintained on meeting NDP and Towards 2016 targets of 27,000 starts/acquisitions in the 2007-2009 period;

· a further €27 million has been provided under the Rental Accommodation Scheme to meet carryover and new commitments in 2008, reflecting the transfer from the Department of Social & Family Affairs of customers previously in receipt of Supplementary Welfare Allowance;

· a specific allocation of €50 million has been provided to undertake further tranches under the Affordable Housing Purchase Scheme;

· progress under the Capital Loans and Subsidy Scheme (Voluntary and Co-operative Housing) is being supported by an additional €26 million;

· an allocation of €10 million has been made for the initial costs associated with the regeneration of certain areas of Limerick City;

· an additional €45 million capital investment in Water Services to continue infrastructural support for social and economic development;

· an additional €17.9 million is allocated to the Local Government Fund bringing the Exchequer contribution to the Fund in 2008 to €545 million;

· an additional €13 million to Environment Protection Agency (EPA) to go towards essential research and development and monitoring, the cost of construction of an extension to the EPA headquarters in Wexford and staffing. This brings the total allocation to over €39 million for 2008;

· an initial Exchequer allocation of €40 million in 2008 is provided to cover the operations of the new Gateways Innovation Fund. An allocation of €300 million is provided for the Fund in the Department’s Multi-Annual Capital Envelope;

· an additional €8 million to National Heritage (National Parks and Wildlife) to go towards the management and consolidation of < lang=EN-IE style='font-size:11.0pt; color:black'>National Parks properties and the cost of monitoring and management programmes as required under the various EU Habitats and Birds Directives;

· an additional €6 million for the further development of the public library service;

· an additional €3 million for landfill remediation, bringing the total allocation to €13.5 million in 2008; and

· an additional €3.3 million to Fire Services, to allow for the continued momentum of the training of Fire Services personnel and Fire Safety promotion. This brings the total allocation for this area to over €25.6 million in 2008.

The detailed 2008 Estimate for this Department is set out at page I.55.

DEFENCE GROUP

Gross Expenditure for the Defence group in 2008 is €1,079 million, an increase of €46 million (all but €100,000 of which is Current) relative to the pre-Budget Estimate. The bulk of the increase is towards the 2008 cost of participation by up to 400 members of the Defence Forces in the proposed EU military operation to Chad.

The detailed 2008 Estimate for this Group is set out at page I.79 (Department of Defence) and I.81 (Army Pensions).

COMMUNITY, RURAL & GAELTACHT AFFAIRS GROUP

Gross Expenditure for this Group of Votes, which includes the Department of Community, Rural & Gaeltacht Affairs and the Charitable Donations and Bequests Office, in 2008 is €557.4 million, an increase of €37.7 million (€27.2 million Current and €10.5 million Capital) relative to the pre-Budget Estimate. The key improvements to be delivered with these resources in 2008 and later years are as follows:-

· an additional €12.5 million is being made available to fund the implementation of the recommendations of the National Drug Strategy Rehabilitation Report. This additional funding will allow for the development and strengthening of the local Drugs Task Forces and the roll-out of services to new commuter-belt towns;

· €4 million is being provided for the development of recreational infrastructure as recommended by Comhairle na Tuaithe in its National Countryside Recreation Strategy. The type of infrastructure envisaged includes pathways and trails for walking, cycling, rambling and horse trekking;

· €5 million has been allocated to Dormant Accounts funded initiatives to tackle issues of social and economic disadvantage; and

· a further €5.7 million is being allocated to meet the 2008 costs of the 2,600 participants on the Rural Social Scheme.

The detailed 2008 Estimate for these bodies are set out at pages I.62 (Department of Community, Rural & Gaeltacht Affairs) and I.54 (Charitable Donations & Bequests).

COMMUNICATIONS, ENERGY & NATURAL RESOURCES

Gross Expenditure for the Department of Communications, Energy and Natural Resources in 2008 is €532.8 million, an increase of €64.9 million (€29.9 million Current, €35 million Capital) relative to the pre-Budget Estimate, taking account of the transfer of certain functions with other Departments. The key improvements to be delivered with these resources in 2008 and later years are as follows:-

· €13 million capital funding will go towards Energy Conservation, for insulation, efficiency and building rating schemes and for a range of initiatives which will promote new technologies, increase awareness of energy efficiency and improve capacity to deliver in this area;

· €7 million capital funding is being allocated to Energy Research which will mainly fund measures to develop renewable energy from ocean sources;

· €10 million capital funding is being provided for the National Broadband Scheme, which will go towards making broadband available to around 10% of the population that currently has no access to it;

· €15.3 million current funding, which will be raised from the recently approved TV licence fee increase, and in particular will derive from increased licence sales, will be allocated primarily to RTÉ in support of continued delivery on its public broadcasting remit;

· an additional €2.5 million current funding will go to TG4 to enable it to increase its Irish language programme content; and

· an extra €4 million current funding is being provided for payments under the Salmon Hardship Scheme and €2.8 million current funding is being provided to Inland Fisheries Boards for their role in the implementation of the Water Framework Directive.

The detailed 2008 Estimate for this Department is set out at page I.66.

FOREIGN AFFAIRS GROUP

Gross Expenditure for the Foreign Affairs Group is €1,087 million, an increase of €103.3 million (all but €750,000 of which is Current) relative to the pre-Budget Estimate. The key element of this allocation is an increase of €84 million in the Vote for International Co-operation to achieve an Overseas Development Assistance (ODA) contribution ratio of 0.54% of GNP in 2008. Most of the remainder of the increase is accounted for by additional contributions to international organisations, initiatives relating to Northern Ireland and financial provision for the referendum on the EU Reform Treaty.

The detailed 2008 Estimate for this Group is set out at page I.64 (Department of Foreign Affairs) and page I.65 (International Co-operation).

In addition, a provision of €90 million will be included in the central fund for payments, phased over three years commencing in 2009, to the International Development Association – a part of the World Bank Group. These contributions form part of Ireland’s Overseas Development Assistance.

TRANSPORT

Gross Expenditure for the Department of Transport in 2008 is €3,837 million, an increase of €410 million (€348.7 million Capital, €61.3 million Current) relative to the pre-Budget Estimate. This is an additional provision over and above the reallocation of funding arising from the transfer of certain functions from the Department of Environment, Heritage and Local Government. The key improvements to be delivered with these resources in 2008 and later years are as follows:-

· an additional €74 million for the national roads programme for 2008 to further progress the delivery of the Major Interurban Routes and the Atlantic Road Corridor;

· an additional €45 million is being allocated to improving the non-national roads network;

· over €20 million additional resources for Road Safety Programmes and campaigns in 2008 including a once-off contribution of €11 million to reduce the waiting list for driver tests and bring the waiting time to a target of 10 weeks by the end of 2008; and

· an increase of €262 million on Public Transport Investment Projects to support delivery of additional capacity on commuter rail and bus, including further progress on: rail transport extensions in Dublin; the Kildare rail line upgrade; the Cork to Midleton commuter line; and the Western Rail Corridor.

The detailed 2008 Estimate for this Department is set out at page I.70.

AGRICULTURE, FISHERIES & FOOD

Gross Expenditure for the Department of Agriculture, Fisheries and Food in 2008 is €1,907 million, an increase of €61.7 million (€48.1 million Capital, €13.6 million Current) relative to the pre-Budget Estimate, taking account of the transfer of certain functions from the former Department of Communications, Marine & Natural Resources. The key improvements to be delivered with these resources in 2008 and later years are as follows:-

· a further €35 million has been allocated to meet increased demand under the Farm Waste Management Scheme, to facilitate compliance with environmental conditions and standards required by the EU Nitrates Directives;

· an additional €15 million is provided for the Suckler Welfare Scheme to help develop business opportunities in the increasingly competitive beef sector. A payment of up to €80 per cow up to a limit of 100 cows will be available to suckler cow farmers who undertake to comply with certain animal welfare measures for calves born from 1 January 2008; and

· an additional €10 million is allocated for an enhanced vessel decommissioning scheme, with a view to achieving a more appropriate balance between fishing capacity and stocks. The scheme involves a package of aid to encourage a reduction of some 35% in the Irish Whitefish Fleet, which is essential for the development of a profitable and sustainable seafood industry.

The detailed 2008 Estimate for this Department is set out at page I.68.

ENTERPRISE, TRADE & EMPLOYMENT

Gross Expenditure for the Department of Enterprise, Trade and Employment, including expenditure from the National Training Fund, is €1,998 million in 2008, an increase of €72.7 million (€32.7 million Current and €40 million Capital) on the pre-Budget Estimate. The key improvements to be delivered with these resources in 2008 and later years are as follows:-

· a further €36.5 million in Capital funding is allocated to the Science, Technology and Innovation Programme as part of the Government’s commitment to promoting a competitive, knowledge-based economy. The increase is split between Enterprise Ireland (€19.9 million) as part of the drive to increase innovation in companies, and Science Foundation Ireland (€16.6 million) to promote world-class research;

· an additional €25.8 million is allocated to increased allowances for FÁS participants on training and employment programmes, in line with increases for social welfare recipients; and

· a total of €7 million in additional current expenditure has been allocated to the National Training Fund to further support the National Skills Strategy with a focus on upskilling the workforce.

The detailed 2008 Estimate for this Department is set out at page I.73.

FINANCE GROUP

Gross Expenditure for the Finance Group of Votes (which includes the Department of Finance, the Office of Public Works, the Office of the Revenue Commissioners and the Office of the Comptroller & Auditor General, as well as the President’s Establishment and several other offices) is €1,668 million in 2008, an increase of €64.3 million (€29.3 million Current, €35 million Capital) relative to the pre-Budget Estimate, taking account of the transfer of certain functions with other Departments. The key improvements to be delivered with these resources, together with some savings from other areas, in 2008 and later years are as follows:-

· an additional €10.6 million in support of Revenue’s Special Tax Investigation Projects which have resulted in very significant increases in tax receipts over the last number of years;

· an additional €5.8 million in 2008 (of which €2.2 million is Capital) for the development and upgrade of Revenue’s IT systems;

· further resources of €44.5 million for the Office of Public Works (OPW) to finance the purchase of sites for both the Government’s decentralisation programme and new Garda stations;

· an additional €18 million for the OPW for flood relief projects in a number of locations throughout the country;

· an additional €2 million grant-in-aid in 2008 to the Economic and Social Research Institute for costs arising from the Institute’s move to new premises; and

· an additional €0.25 million to meet the Programme for Government commitment to establish a Commission on Taxation.

The detailed 2008 Estimates for the relevant Departments and Offices are included between pages I.27 to I.46.

ARTS, SPORT & TOURISM GROUP

Gross Expenditure for this Group, which includes the Department of Arts, Sport & Tourism and the National Gallery, is €714.4 million in 2008, an increase of €46.1 million (€22.6 million Current and €23.5 million Capital) on the pre-Budget Estimate. The key improvements to be delivered with these resources, together with some savings from other areas, in 2008 and later years are as follows:-

· further resources of €4.5 million to improve the service to tourism provided by Fáilte Ireland;

· an additional €5 million for the Tourism Marketing Fund for the re-branding of the Irish tourism product and to fund a tourism initiative in the Shannon region;

· a €6 million increase in funding for the Irish Sports Council to provide further support for sports activities throughout the country;

· a further provision of €37 million towards the Government’s €191 million contribution to the cost of the New Lansdowne Road Stadium;

· a €12.5 million increase to provide for further enhancement of art and cultural facilities throughout the country; and

· a €2 million increase in funding for the Irish Film Board.

The detailed 2008 Estimates for this Department and for the National Gallery are set out at pages I.77 and I.72 respectively.

TAOISEACH’S GROUP

Gross Expenditure for this Group, which includes the Department of the Taoiseach and a number of other Votes (including the Central Statistics Office and various legal offices), is €203.2 million in 2008, an increase of €12.9 million in 2008 relative to the pre-Budget Estimate. All of the increase is Current expenditure. The key improvements to be delivered with these resources in 2008 and later years are as follows:-

· Further resources of €2.2 million to provide for the costs associated with the work of the National Forum on Europe in facilitating debate and discussion on issues relating to the European Union, Ireland’s role within the Union and the EU Reform Treaty;

· an additional €0.75 million to provide for the costs associated with the Organisational Review programme in the civil service which will produce a series of reports about the capacity of Government Departments to meet future challenges;

· an additional €4.1 million for the Central Statistics Office, primarily to provide more and higher-quality data (including in the area of sectoral earnings and housing prices) and to reduce compliance costs for industry; and

· an additional €5.7 million for increased administrative costs in the law offices.

The detailed 2008 Estimates for the relevant Department and Agencies are included between pages I.28 to I.42.

MULTI-ANNUAL CAPITAL ENVELOPES 2008–2012

The Multi-Annual Capital Envelopes for each Ministerial Vote Group for the period 2008–2012 have been updated in light of the 2008 Budget expenditure allocations, and are set out in Table 1 of the Summary Public Capital Programme (PCP) at page I.97 of this volume. The Summary PCP also provides details of capital expenditure across each Vote Group, on a programme-by-programme basis, for 2007 and 2008, while the subhead allocations for each Vote are set out in full in the Estimates.

In outline, the Multi-annual Capital Investment Framework provides for capital expenditure to be maintained at 5½% of GNP and higher in each of the next five years, with a cumulative capital spend over the period in excess of €56 billion (of which almost €47 billion is Exchequer-funded and over €9 billion is to be funded by PPPs). This sustained commitment to capital investment over the medium term will facilitate the continued roll-out of the National Development Plan 2007–2013 to tackle Ireland’s infrastructural deficit and promote a competitive, growing economy.

On this basis, total capital investment, factoring in PPPs and investments financed by user charges, will represent a very significant proportion of GNP by international standards, as summarised in the table below.

Expenditure under the Multi-Annual Capital Investment Framework 2008-2012

Year	2008	2009	2010	2011	2012
% of GNP	5.6%	6.3%	6.1%	5.8%*	6.2%*

* using technical projections, rather than formal forecasts, for GNP in these year

EFFICIENCY REVIEW 2008

The following parameters will apply to the Efficiency Review proposed by the Tánaiste.

· Each Department will be required to examine all administrative spending under its, or its state bodies’, aegis.

· They will be required to provide the Department of Finance by 1 March 2008 with specific proposals to maximise administrative savings in their area.

· These will be reviewed within the Department of Finance, using outside efficiency experts if needed, who will report to Government.

· These savings will be used in reducing the cost of existing level of services for 2009 and any Department who fails to do so would lose out in the spending round for 2009.

· Particular areas of interest are possible inefficiencies due to the multiplicity of Boards and Agencies; the need for better sharing of certain services; efficiencies in management, travel and consumables in general.

· The measures identified should not jeopardise the maintenance of front line services.

· Each Secretary General will be required to advise their relevant Oireachtas Committee of the savings and be examined on these.

The process will begin without delay.

Examples of administrative expenses include back office functions such as finance, human resources, IT, legal services, facilities management, travel services marketing, communications. There are also procurement costs for the variety of goods and services bought by the public sector. There may also be efficiencies in transactional services provided by the public service e.g. collection of taxes and fees, provision of benefits, collection of data, registration functions etc. Many important savings have already been made in some of these areas.