Ibec Budget 2017 Analysis

Ibec CEO Danny McCoy with Ibec President Anne Heraty

Dear member,

This update provides a comprehensive analysis of how today's budget will impact your business.

Budget 2017 includes a range of positive measures that will support growth, but the scale of the Brexit challenge is under appreciated. A series of additional reforms and initiatives will be required this year.

Tax reforms don't go nearly far enough towards levelling the playing field with the UK. Businesses exposed to the deepening currency crisis require additional support. An urgent, cross-departmental response, coordinated by the Taoiseach, is now needed and must involve the re-prioritisation of current resources and new spending.

The attractiveness of Ireland as a place to live and work remains an abiding concern for many business. Moves to increase education spending, boost the housing supply and make childcare more affordable are welcome. But these measures need to be closely monitored and quickly adjusted if they are not having the desired effect.

Changes to the taxation of entrepreneurs are welcome, if modest. The capital gains tax reforms and changes to the personal tax regime for the self-employed are sensible and send out the right message about the need to better support entrepreneurship.

Some additional capital spending was announced, but EU fiscal constraints mean that the resources allocated fall far short of what is needed. This remains one of the biggest economic challenges facing the country. Work at an EU level to secure more spending flexibility must remain at the very top of the political agenda.

These are uncertain times for many companies. Ibec will remain focused on representing the views of business over the coming weeks and months. I'll keep you updated.

Best regards

Danny McCoy
Ibec CEO

NEWS ARTICLES

Economic and fiscal context

Government expects the economy to grow by 4.2% in 2016 and 3.5% in 2017. But the budget has not fully appreciated the scale of the Brexit challenge. The recent sterling weakness was a late shock.

Personal taxation

Overall changes in personal taxation will be fairly minimal with cuts to the various USC rates being paid for by the non-indexation of the income tax system.

Brexit and business

On the test of being ‘Brexit proofed’ it is clear the budget fell short. Only around €50 million in new or improved measures aimed specifically at offsetting the impact on business were announced.

Investment and housing

The prioritisation of capital spending is welcome; 30% of all additional spending is in this area. Government spending on capital is currently at an all-time low, only accounting 1.5% of GDP in 2015.

Education, childcare and labour market

The increased funding for third level (€35 million) is an important and positive development. This is a sector that has been put under huge pressures in recent years.

Ibec's economic and taxation team

Supporting your business: The Ibec economic and taxation team of Fergal O'Brien, Gerard Brady and Alison Wrynn.

EVENTS

This Friday at 8am join us at the Ibec Budget 2017 briefing

This Friday at 8 am Ibec will host the latest Policy+Business briefing on Budget 2017. Join us for an update on Ibec’s response to Budget 2017, what the Government’s proposal means for business and next steps.

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Ibec © 2016 Ibec clg is registered in Ireland. Registration No. 8706

Registered directors: Anne Heraty (President), Edel Creely, Leo Crawford, Gerry Collins, Larry Murrin, John Kennedy, Danny McCoy, Liam O'Donoghue, Paraic Curtis, Kevin Toland, Brian MacCraith, Siobhan Talbot, Patrick Manley, Alastair Blair, Richie Boucher, Frank Gleeson, Cathriona Hallahan, Tony Smurfit.

Company Secretary: Liam O'Donoghue

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