Budget expectations rise as corporation tax take surges in September

A €10 increase in pension and welfare rates is among the few budget measures to have been agreed as difficult and sometimes fractious negotiations between Ministers run into the weekend.There is expected to be an annual cost-of-disability payment in the region of €400-€500, while a permanent increase of €5 in the weekly rate of fuel allowance or a lump sum – sources mentioned a figure of €300-400 – to recipients was also said to be under discussion. An increase to the living alone allowance is also expected.Many of the figures in the welfare package will not be finalised until Sunday or even Monday, the day before the budget is delivered in the Dáil by Minister for Finance Simon Harris and Minister for Public Expenditure Jack Chambers.It is understood families with more than one child attending college will benefit from accessing a €500 grant towards the cost of college fees after reforms to income thresholds for eligibility were agreed, while a general reduction in fees was said to be still possible, but unlikely.READ MOREOn the tax side, it is expected that aside from the well-advertised personal income tax package, there will be small reductions in capital gains tax and in inheritance tax. There was continued acrimony in some quarters on Friday evening as many departments moved towards settling their budget in discussions with the Department of Public Expenditure. A senior source in one department that has agreed its budget said they were “done, but not in a happy place” after a process they labelled as “bizarre”. There was sharp criticism in some quarters of Chambers, with suggestions from his department described by one person as “unacceptable” and “insulting”. But defenders of the Minister repeatedly pointed out that the decision to put a limit of 6 per cent on spending increases next year was one agreed by the entire Cabinet during the summer.[ ‘Literally unbelievable’: Ministers get ‘a kicking’ from Chambers’s team as budget talks near endOpens in new window ]Minister for Culture Patrick O’Donovan is said to be deeply frustrated, with one figure with knowledge of negotiations saying it would be a “stark and very, very painful budget for arts and culture, sports and media”. It was not clear if a €100 “culture card” for younger people would be approved. Other sources were critical of O’Donovan for “flying the kite” about the culture card in the first place before he had budget approval for the measure.In housing, big-ticket reforms were said to be unlikely, casting doubt on mooted increases to Help to Buy thresholds and reductions in stamp duty. Minister for Housing James Browne was said to be concentrating on securing more money for social housing, with Chambers seeking reforms to fund spending.On childcare, some predicted higher subsidies may be weighted in favour of younger children, although Fine Gael is said to favour an approach that includes children in preschool and afterschool care.Several departments agreed their budget settlements yesterday, but negotiations are expected to continue into the weekend and perhaps Monday with some others. Sources acknowledged that big overspends in the health and education budgets – the subject of fierce criticism by other Ministers – could continue next year. Pressure to ease the tight hold on spending is likely to increase over the weekend after the pre-budget white paper published by the Department of Finance on Friday showed a larger-than-expected surplus of €13.5 billion projected for next year. [ Analysis: Three alternative Budget 2027 plans with one thing in common: spend, spend, spendOpens in new window ]Tax receipts continue to perform strongly this year. An additional €3 billion in corporate tax was collected by the Government last month after several big multinationals “front-loaded” their end-of-year tax payments to Revenue.Meanwhile, Opposition parties continued with demands for more spending. People Before Profit said it would raise €45 billion total tax take by increasing corporation tax to 20 per cent, which it said it would spend on a variety of public services and giveaways. The party also pledged to hike taxes on higher earners.