UPDATE: In what can be described as perhaps the most social Budget yet with generous tax measures for the low waged and social welfare payments up 11pc, Finance Minister Brian Cowen TD said he will be committing the Government to invest €900m on capital spending for the third-level sector over the next five years to ensure Ireland can compete in the global economy.
In a Budget that left old reliables such as alcohol and cigarettes untouched for a second year running, Minister Cowen said social welfare payments will rise 11pc from €148.80 a week to €165. He also increased the contributory old age pension by €14 to €193.30, a rise of 8pc.
In a spending commitment that will total around €1.2bn, Cowen said he will be committing €900m to the third-level sector over the next five years as part of the Department of Education and Science capital envelope. Of this €630m will be Exchequer capital and €270m will come through the public-private partnership process.
A further €300m will be committed to the Strategic Education Fund for higher education over the next five years to stimulate excellence through collaboration and change, which again will come under the auspices of the Department of Education and Science.
In terms of infrastructure, Cowen reiterated the Government’s commitment to the Transport 21 programme, which will involve a €34.4bn investment over 10 years.
In terms of working parents, Cowen said he was mindful of the burden faced by working parents and difficulties securing affordable childcare and said he was providing €317m to a five-year childcare strategy, rising to more than €600m a year by 2008. The programme is envisaged to support the creation of an extra 50,000 childcare places.
In terms of small businesses, Cowen said he was raising the Vat registration thresholds for small businesses in the forthcoming Finance Bill from €25,500 to €27,500 – a deft move that will remove almost 2,200 businesses from the Vat net.
PAYE and PRSI can now be paid on a quarterly instead of monthly basis, a move that will assist 74,000 small firms at a cash flow cost of €102m to the Exchequer in 2006.
The Budget was welcomed by the Minister for Enterprise, Trade and Employment Micheál Martin TD, particularly in relation to his own department’s allocation of €39m (an 18pc increase) for investment in science and technology, which will be used to increase in-company research and development and to strengthen collaboration between industry and the education sector.
The commitment of €900m to the third-level sector and €300m to the strategic innovation fund for higher education was welcomed last night by the chief executive of the Higher Education Authority Tom Boland who said: “The strategic innovation fund will significantly assist the universities and the institutes of technology to deliver world-class higher education and research.
“In particular, the fund is a boost for enhanced access to higher education; improvements in teaching and learning, and support for new systems of delivery such as modularisation and e-learning. The signal that this will be a multi-annual fund is especially welcome providing as it will stability and certainty in planning. This fund, together with the ongoing work to develop a new national research strategy, is very welcome,” said Boland.
By John Kennedy
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