Darragh O'Brien
Ceist:26. Deputy Darragh O'Brien asked the Minister for Finance the way in which his Department Brexit-proofed budget 2017; and if he will make a statement on the matter. [31841/16]
Amharc ar fhreagraThursday, 10 November 2016
Ceisteanna (26, 55)
Jackie Cahill
Ceist:55. Deputy Jackie Cahill asked the Minister for Finance the reason there was no practical or meaningful package presented in the budget to commence the defence of Irish business interests in view of the fact that as a country, Ireland does business worth €1.2 billion weekly with the UK; and if he will make a statement on the matter. [31809/16]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 26 and 55 together.
The UK referendum on EU membership presents an important challenge for the Irish economy. The budget took Brexit into consideration in both its framing and its detail. In terms of framing, my Department incorporated the potential impact of Brexit into the macroeconomic forecasts for next year that underpinned Budget 2017. My Department also published an in-depth analysis of the sectors of the Irish economy and highlighted those with the greatest trade exposure to the UK.
In light of the findings of the Department of Finance's in-depth sector analysis a number of taxation measures were announced in the Budget, with a view to getting Ireland "Brexit ready". The detail of these sectoral measures are that they reduced Capital Gains Tax to help entrepreneurs bringing this relief more in line with that in operation in the UK. There was an extension and amendment of the Foreign Earnings Deduction to help Irish exporters to diversify their export and import markets as some sectors of the Irish economy are shown to be highly reliant on the UK as an export destination.
The Budget contained an extension of the Special Assignee Relief Programme to assist businesses to relocate key staff to Ireland to provide certainty for foreign direct investment in Ireland. Many sectors in Ireland that are exposed to the UK have a high percentage of small and Irish owned enterprises. The increase to the Earned Income Tax Credit for self-employed tax payers will aid these enterprises and encourage entrepreneurship. The Agri-food sector was identified in the Departments analyses as being particularly exposed to Brexit. The introduction of an income averaging "step-out" in the agriculture sector will help with the volatility Brexit may bring. In addition to this a €150 million loan fund will be provided jointly by the Strategic Banking Corporation of Ireland and EU exceptional adjustment aid to enable farmers to better manage their cash flow and reduce the cost of borrowing.
At a macroeconomic level Budget 2017 sought to build up Ireland's buffers to any fallout from Brexit. Accordingly the Government has decided to set a new domestic target of a debt to GDP ratio of 45 per cent to be reached by the mid-2020s, or thereafter, depending on economic growth. This will improve Ireland's ability to absorb a shock in addition to the rainy day fund announced in the Summer Economic Statement.