Budget 2004 - Summary Leaflet

Budgetary Objectives

This Budget has four key objectives:

  • To foster employment and growth
  • To continue a prudent approach to our public finances
  • To invest more in infrastructure
  • To secure competitiveness by keeping inflation low

thereby giving the resources needed for social inclusion


Summary of Economic & Budgetary Outlook 2004

  • Economic growth at over 3%
  • Employment up by 23,000
  • Unemployment held at 5% on average
  • Inflation down to %
  • Gross spending up just under 7% , to €41.1 billion
  • Exchequer borrowing of €2.8 billion

General Government Deficit at 1.1% of GDP



Personal Taxation Measures

  • €300 million in tax reductions
  • Employee (PAYE) tax credit increased by €240 to €1,040 per annum
  • 90% of minimum wage will remain out of the tax net
  • Income Tax exemption limits for those aged 65 years and over increased by €500 to €15,500 p.a. single and by €1000 to €31,000 p.a. married
  • Over 41,000 taxpayers will be removed from the tax net next year
  • Tax Allowance for Trade Union subscriptions raised to €200 p.a.


Tax Reliefs

  • Business Expansion and Seed Capital Schemes extended to 31 December 2006. Company limit increased to €1 million
  • Film Relief extended from end-2004 to end-2008. Cap on funding amount (per film) eligible for tax relief increased from €10.48m to €15m from 1 January 2005
  • New tax credit for R&D by firms to encourage higher value jobs
  • New Holding Company tax relief to encourage head-office firms and jobs to come here
  • Renewable Energy Tax Relief extended to 2006
  • Urban Renewal Scheme and other Schemes extended from 31 Dec 2004 to 31 July 2006


    Indirect Taxation

From mid-night 3 December:

  • Cigarettes up by 25c per packet of 20 (including VAT)
  • Excise duty on petrol and auto diesel up by 5c per litre (including VAT)


Rural Issues

  • Increase in annual tax exemption limits for leased farmland - €7,500 for 5 to 7 year leases, €10,000 for 7 years or more. Age limit lowered from 55 to 40
  • Farmers/Flat Rate VAT raised to 4.4%
  • Gaeltacht summer college (mná tí) income exempt from tax
  • Capital allowance for farm pollution control measures extended for 3 more years
  • New Rural Social Scheme to create up to 2,500 community-related employment places



  • Major programme to decentralise Government Departments and Offices
  • Over 10,000 jobs for 53 centres in 25 counties
  • €20m in capital provided for up-front investment

  • Programme to involve voluntary staff transfers


Social Welfare

(from January 2004, except where stated)

  • €630m full year increase in Social Welfare as follows:
  • Increases in rates well ahead of inflation
  • Maximum rates for old age and related pensions increased by €10 per week
  • Over 66 Widow(er)'s Contributory Pension and Deserted Wife's Benefit increased by €11.50 per week
  • All other personal weekly rates increased by €10 per week
  • Special Increase of €16.10 in the Invalidity Pension Qualified Adult Allowance rate where the qualified adult is aged 66 or over
  • Child Benefit to increase by €6 (1 st and 2 nd children) to €131.60 per month and by €8 (3 rd and subsequent children) to €165.30 from April 2004
  • Family Income Supplement income thresholds increased by €28 per week and a €7 increase in the minimum payment
  • Increase in Respite Care Grant to €835 per annum from June 2004
  • Increase in Widowed Parent Grant to €2700 from Budget day




Additional €25 million allocation to assist persons with intellectual, physical or sensory disabilities

Public Service Pension Reform

For new entrants, the Government is introducing the following:

  • Minimum pension age increased to 65 for most new entrants from 1 April 2004
  • Minimum pension age for certain categories (Garda í , Prison Officers) to be increased to 55 , and Defence Forces to 50
  • Minimum pension age increased to 65 for Oireachtas members and Office Holders elected or appointed on or after 1 April 2004
  • Present compulsory retirement age of 65 will be removed for new entrants enabling staff to remain in work if they wish
  • For existing public servants:
  • New integration arrangements with Social Welfare to assist lower paid public servants
  • A single Additional Voluntary Contribution type scheme is to be introduced


Capital Expenditure

  • 5 year rolling envelopes for all capital investment. Commitment to keep capital investment at up to 5 per cent of GNP during next five years
  • Extra €30m for School Building works


Local Government Finances

Additional once-off €30m provided in 2004 for the Exchequer contribution to the Local Government Fund