It was an interesting day today, I was invited into Newstalk as a member of the expert panel on Jonathan Healy’s Budget Special Programme which broadcast for 4 hours this afternoon.
Grant Thornton had a team of people there crunching the numbers and a steady flow of politicians, experts and journalists throughout the 4 hours made for an interesting perspective on the budget. Particularly when you got to hear their off air views too.
There will be lots of things published over the next few days as the media analysis the budget to death like it always does, but I wanted to consider some of the particularly good points but also the missed opportunities.
Overall, I think we can all agree the budget said a lot but did very little, in fact it felt a little like coming down on Christmas morning knowing what you got and then just being a little disappointed when you open everything and find that you didn’t get any surprise.
The winners in the budget are probably the self-employed, or more accurately the employees of self employed or SME companies. This new “KEEP” scheme, which is the Key Employee Encouragement Programme (I think) is very welcome provided they can get the detail right. My understanding is it will allow SME’s to give their key employees shares in the business and that employee won’t be taxed on those shares at the point of receipt but instead at the point of disposal.
There was talk that company owners would rewarded for the longer they held on to shares. This would be by way of a tax reduction in CGT for every year they own shares. This was supposed to be combined with the abolishment of the 65 years of age restriction for gaining access to the benefit of retirement relief. Hopefully both will appear in the finance bill when it is published.
The budget was very much centred around getting builders and developers to build rather than hold land. Encouraging private development in conjunction with all the plans the state has to build a further 30,000+ social housing units will make for interesting times in county council planning departments around the country. But none of the measures seem to address those concern of developers which are, costs are too high and sales prices too low to justify building at the moment. Developers have been saying for the last while they just couldn’t make money from building right now, I don’t see how this budget changes that.
What a great idea to drop BIK on electric cars to 0%. Tesla will be delighted. But what about poor Conor McGregor, one of his Cars is a BMW i8 which costs around €150,000-€165,000 new. The problem for Conor is he will still be hit for BIK because it appears that the 0% rate applies to all electric only and not to Hybrids. The types of cars most likely to benefit from this incentive are VW Gold Electric or the Nissan Leaf, But expect a couple of €100,000+ Tesla SUVs to start appearing on the roads too. There is a concern around this, in that it was announced as 0% for 2018 but it is yet to be decided what will happen after that.
The announcement of 2,000+ public sectors jobs is welcome but expensive and this combined with the fact that ¼ of what this government spends is spent on the health service are the things to be of concern.
All in all not much to see here, carry on regardless.