Renters’ tax credit to go up while tax break on home heating oil on the cards

The renters’ tax credit will be increased in the budget, the Taoiseach has said, while the de facto leader of the Independents in Government, Seán Canney, has flagged possible reductions in carbon tax on home heating oil and progress towards abolishing the means test for the carer’s allowance.Tánaiste and Minister for Finance Simon Harris, meanwhile, insisted his tax package in the upcoming budget would be worth “hundreds of euros” to workers, while warning there was a limit to what the Government could do on income tax.As negotiations within Government moved up a gear at the beginning of the penultimate week before the October 6th budget, parts of the €8.5 billion package were becoming clear, though sources involved in the process said that no final decisions had been made on anything. However, the Taoiseach and Tánaiste were clear that the renters’ tax credit, worth up to €1,000 a year for an individual, will be increased on budget day. Neither would be drawn on whether the increase would be as large as the €300 being sought by the Minister for Housing, James Browne.READ MOREAsked on Monday if he supported an increase of that scale, Micheál Martin told reporters before the Cabinet met: “We will be increasing it in the forthcoming budget.”Harris said there was a “need to help people with the cost of rent”, adding he was “positively disposed” to increasing the credit.Specifically asked if it would be increased by €300, Harris warned: “It’s going to be a long 15 days [until the budget] if we’re going to go through every specific line of the budget and every specific amount inside the budget.“There’s a tax package of around €1.5 billion. We all know any personal income tax package comes in at around €1.2-ish billion.“So, there’s a little bit left to do [on] other things. The programme for government is clear – that’s what unites everybody in Government – that the renters’ tax credit is an area that should be increased if possible, and therefore we will look favourably upon that.“The level at which we do it is a matter for budget day.”[ Good cop, bad cop: Harris and Chambers toy with electorate ahead of budgetOpens in new window ]With budget negotiations all this week and next, Ministers are getting in their bids for spending increases to Minister for Public Expenditure Jack Chambers, who has said he will keep the increase across the board to 6 per cent. Many of the bids are understood to be far beyond 6 per cent. Various requests from Ministers were aired over the weekend and on Monday, with reports that Minister for Arts and Culture Patrick O’Donovan was seeking funding for a €100 voucher for 16-year-olds to spend on cultural activities, while Minister for Housing James Browne was looking for a €20,000 increase in the Help-to-Buy tax refund. However, Harris said there were no such proposals in the budget at this point.There is general agreement across Government that action will have to be taken to assist people with the costs of fuel and energy, though there is little consensus at this stage as to what form that might take. However, there is strong speculation that the carbon tax on home heating oil could be significantly reduced, which would alleviate some of the very significant inflation in the price of a fill of oil this year. Canney said that “whatever is necessary” and “whatever is affordable will be done” when asked about the prospect of halting carbon tax increases on home heating oil.