5 ways the draft programme for government will affect your pocket
Daragh Cassidy
Head Writer

After months of political wrangling, a draft programme for government has finally been agreed between Fianna Fáil, Fine Gael and the Greens. So how will the proposals in the document affect your pocket?

1. Income tax 

Don't expect any big tax reductions in this year’s budget. In fact, don't expect any at all.

The programme for government forecasts no cuts to income tax or USC rates for the immediate future for PAYE workers.

The rate at which earners start paying the 40% rate of income tax will remain at just €35,300 also.

However there is a commitment to index link tax credits and the standard rate cut-off point to wage inflation over the coming years - this is to stop more and more workers gradually being pushed into paying the higher rate of tax as wages increase with inflation.

However the programme for government leaves the door open to increases in PRSI for both PAYE workers and the self-employed.

2. Energy 

The new government now intends to increase the carbon tax from €26 to €100 per tonne of CO2 by 2030. Previously a target of €80 had been set. 

At €100 the tax would add around €230 in total to the average annual gas bill, around 25 cent to every litre of petrol and diesel, and around €2.25 to every bale of briquettes.

The tax will be raised by €7.50 each year.

On the plus side, a microgeneration scheme to allow property owners with solar panels to sell excess power back into the national grid is to be up and running within 12 months. According to industry experts, this could result in payouts of up to €400 a year to some households.

3. Transport

According to a major annual Deloitte cost of living survey, Dublin has the second most expensive public transport in the world (cities outside of Dublin weren’t included in the survey but one might argue that proper public transport barely exists outside the Pale anyway). 

One of the reasons public transport is so expensive in Ireland is because the level of government subsidies is far less than what it is in other countries.

In a major shift, the draft programme for government envisages funding being split 2:1 in favour of public transport going forward while also committing to push ahead with projects such as the Metro to Dublin Airport and Swords and the expansion of the Dart network. 

10% of the transport budget will also be spent on cycling and walking infrastructure, amounting to €360m a year. 

With more money than ever being spent on public transport, cycling and walking, people’s commutes should get easier and hopefully cheaper too, with a promise in the draft programme to review public transport fares.

However the purchase and import of new diesel and petrol cars will be banned from 2030. With electric cars still out of the price range of most commuters, drivers will be hoping the cost falls considerably before the ban comes into force. 

4. Pensions 

The much talked about auto-enrolment scheme for pensions is still included in the programme for government.

A target date of 2022 has been set but question marks remain over whether this deadline will be met. It was due to have already been implemented years ago. A similar scheme in the UK is already up and running.

Under this scheme, all workers (who aren't already in a workplace scheme) will be automatically enrolled into a pension scheme once they reach the age of 20 and are earning over €20,000 a year. People earning below this can also choose to opt in if they want to.

Workers will start off by contributing 1.5% of their income a year, increasing to 6% in year 10, which must be matched by the employer. The Government has yet to reveal what it’ll contribute. 

For those on the other end of the scale who are thinking about drawing down their pension as opposed to saving for it, the planned increase in the age that people qualify for the State pension has been put on the back burner. It will remain at 66 for now (there had been plans to increase it to 67).

5. Health 

Lots of promises have been made in areas related to health but very few concrete proposals or targets have been set.

The extension of free GP care to “more” children has been promised while prescription charges, and the drug payment scheme threshold which is currently €114 a month, will be reduced.

Carparking charges at hospitals will be capped “where possible” and the income threshold for medical cards for over-70s will be increased.