Will there even be a budget in October? We discuss this in episode 1 our Budget 2017 podcast!
Budget 2017 could be a big source of tension between Fianna Fáil and Fine Gael if the two parties don't come to an agreement on proposals. If the parties can't agree, there is always the risk that we won't even get a budget!
In today's Budget 2017 podcast we discuss if there will even be a budget this year and what needs to happen to pass it.
Ciara Kennedy: Hello and welcome to Taxback.com's Budget 2017 podcast! In today's episode, we'll cover will there even be a budget in October? I'm here with our tax experts Barry Flanagan and Christine Keily to discuss what needs to happen for Budget 2017 to pass.
Ciara: So, Christine or Barry, how did we end up with the current coalition?
Christine: Well the current coalition arose as a result of what is known as a hung parliament. that is where there is no clear victor in the last election.
Barry: So, effectively what we had to have, what we had to have was an agreement between parties to provide a government so what we have at the moment is a, what’s known as a confidence and supply arrangement between Fine Gael and Fianna Fáil. Fine Gael have taken some independents in coalition with them and Fianna Fáil has agreed to back the em government in any confidence motions and also back the government in any supply or budget motions as well, so Fianna Fáil has agreed to back the budget as brought by Fine Gael.
Em, but effectively they are somewhat constrained because they will have to, the budget that is brought is going to have to be in line with the agreed programme for government. So that’s why I think the chances of any surprise moves is severely diminished this year especially, because most of what would be contained in Budget 2017 is going to be as set out in the programme for government.
Ciara: So, em, what are actual the conditions like for budget 2017 passing at all?
Christine: Well I think ah as Barry was saying there, the fact that the current coalition is operating on a confidence supply arrangement really means that there is much less scope for the government entering this budget. Em..the confidence supply arrangement obviously is an issue together with eh some of the caution arising now as a result of Brexit coupled with the onioing situation regarding apple.
Barry: The conditions really are mixed, I mean we’ve been told that there is fiscal space eh to use the term from last year which ye know really just means extra cash or extra wiggle room available. It’s about a billion, and eh what we are expecting is that eventually two thirds of that is going to go on new services or new initiatives and about one third of that maybe €350 million will be given back to people in the form of tax cuts.
Ciara: And if it doesn't pass, what happens then?
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Christine: Well generally what happens is the budget announcement happens and then a particular process is followed whereby the budget is eh passed through various stages bringing us initially to the finance bill and then the finance act. Sometimes in this process changes are made, items are debated and some things may be removed. However em, in this situation, given the coalition in question, if agreement can’t be made potentially this could lead us to a second budget am…and if it’s still not working I guess that could mean the end of the current government.
Barry: Absolutely I mean effectively the government cannot function without an agreed budget so if no budget is em, agreed, and that could take a few weeks before a final agreement is reached but if it isn’t reached, if agreement isn’t reached and it doesn’t pass, then we are back looking at a new election.
Ciara: And what has eh Fianna Fáil or Fine Gael got to lose or gain by this budget not passing?
Christine: I think it’s very hard to predict, em basically, if it doesn’t pass and the government falls, the winner or loser here is largely down to the popularity and who the electorate decides to blame.
Barry: Yeh, if if the budget is brought in line with the programme for government, em, and then still not agreed, the party that isn’t agreeing it would presumably be the party that the electorate would punish at the next election. Em...the latest opinion polls em are showing not too much of a change over the last month or two. Certainly you wouldn’t think Fianna Fáil have enough of a lead form them to feel confident about pulling the legs out from under the government or Fine Gael certainly wouldn’t feel that they’re far enough ahead or that they’re in touch enough to be able to introduce something that is not in the programme for government, so I think that the likelihood for surprises is quite small now at this stage.
Ciara: Do you think this is an opportunity for smaller parties or independents?
Christine: Generally smaller parties and independents would need to be ready for any opportunity and any time there is any type of turmoil, they could see this as a chance.
Barry: Absolutely, I think that would apply especially to the independents who are outside of the government em, at this point. Em the smaller parties have actually tended to fall em away somewhat in the last few months though the independent vote has remained strong, but certainly any independent who is engaged in the government at this stage, they haven’t had the opportunity to deliver for their own em constituency whatever it was they went in for. For example John Halligan in Waterford trying to deliver em the second em the second cancer unit there. So he hasn’t had the opportunity to do that so it’s less likely that the independents in government would em pull the plug at this point until they’ve had such time as to deliver something tangible em for their own constituents
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Ciara: Right and finally, em do you need to wait until the budget is announced to apply for a tax refund with Taxback.com?
Christine: Definitely not, when it comes to making an application for a tax refund there is no time like the present. In Taxback we make applications on a prior year basis. Em currently in 2016 we are doing applications for 2015, 14, 13 and 12. In 2017 then well be able to start with the 2016 refund applications, but in reality anything that is announced in the upcoming budget will be having an effect for the 2017 tax year and refunds for that cannot be made until after that year is over.
Barry: The main message is the quicker you apply, the quicker you get the refund. Obviously it's dependent on how long Revenue take with processing the refunds but certainly I wouldn’t delay at this point of the year either because it’s only gonna get busier from here on in with the filing deadlines coming up for both self-assessed and form 12 PAYE workers, so really the quicker you apply, the quicker you get money.
Christine: Particularly when you’re thinking about 2012 eh tax refund claims because we do actually have a deadline for those of the 31st December 2016.
Barry: And once that's gone its gone you can't ever get 2012 back.