Here we summarise the key highlights and statements for the construction industry from the 2016 Budget:
Paddy Stapleton, Senior Tax Manager, Baker Tilly Ryan Glennon
There were some positive aspects of Budget 2016 for the potential continued recovery of theconstruction sector, however further details on the Government’s strategy for NAMA properties will need to be revealed before we will see the true value of Budget 2016 for the industry.
The main areas of Budget 2016 which will affect the construction industry are in relation to the extension of the Home Renovation Scheme, tax equalisation between the self-employed and employees with the phased introduction of Earned Income Credit which will benefit self-employed and proprietary directors, and NAMA’s target to deliver 20,000 residential units before 2020 as well as Minister Howlin’s announcements in respect of continued investment under the Government’s Social Housing Strategy. The reduction in the three rates of USC will also benefit employees and the self-employed in the sector.
While the extension of the Home Renovation Scheme to 31 December 2016, the introduction of reliefs for self-employed individuals and the continued investment under the Social Housing Strategy can only be seen as positive for the construction sector, the target of 20,000 residential units target for NAMA between now and 2020 falls well short of Minister Noonan’s own acknowledgment that there is a requirement for 10,000 new units per annum in the Dublin area alone. Further detail on these proposed investment plans will be required before one can gauge the potential knock on effect for the construction sector.
The Federation of Master Builders has described the 2016 budget statement as a ‘missed opportunity in the government’s race against time to meet its own housing targets’.
FMB chief executive Brian Berry said: “The government has set itself a target of a million new homes by 2020. That is rightly ambitious, but the continuing gap between what’s being built and what needs to be built makes hitting that target more difficult by the day. Official statistics show that annual housing completions in England totalled just over 140,000 in 2015, a long way short of the 200,000 homes we need every year to hit one million.
Independent Newspaper: George Osborne set to give go-ahead to major new rail routes
Plans to build major rail routes across London and in the north of England were announced in Wednesday’s Budget in a programme of improvements to the country’s transport network.
George Osborne will give the go-ahead to the construction of Crossrail 2, running from north to south across the capital, as well as the HS3 rail link between Manchester and Leeds.
Construction consultant Turner & Townsend has hailed the ‘progressive’ infrastructure spending plans of chancellor George Osborne.
Patricia Moore, UK head of infrastructure at Turner & Townsend, said: “We’re relieved at the chancellor’s progressive steps to make infrastructure a priority, putting it firmly at the heart of fiscal planning for the long-term.
“The austerity cuts will surprise very few but with current record low interest rates meaning cheap borrowing for government, investing in major rail and road is the counterbalance.
“Future spending on transport projects such as HS3, a new tunnel between Manchester and Sheffield, and upgrades to the M62 and main A66 and A69 roads, will all help stimulate and reinvigorate the economy in the North providing a much-needed boost to jobs and trade.”
Civil engineering contractors have welcomed Chancellor George Osborne’s announcements in his 2016 budget of new money for flood defences
The 2016 budget included the announcement of an additional £700m boost to spending on flood defences by 2020-21. There was also backing for continued planning work on Crossrail 2, High Speed 3 between Leeds and Manchester, and upgrades to the M62, A66 and A69. But there is no news yet on when spades might start hitting the ground on any of these projects.