Douglas Fraser
Scotland business & economy editor

• Last year saw radical change in the Scottish budget with very low growth. This year, the growth has picked up, and there's little change.

• Complaints that austerity is still a drag on Scottish public services don't seem to square with real terms increases on budget heads.

• The most obvious focus for Derek Mackay wishing to win friends were those in business, though in general, it still doesn't like higher income tax on higher earners.

Image source, Jane Barlow/PA

This time last year, Derek Mackay was being the radical. The SNP's finance secretary tore up the income tax system to create a new one for Scotland, and set course for divergence from the Westminster line by dipping into higher earners' pockets.

At the same time, the Scottish Fiscal Commission delivered its first forecast for the Scottish economy, with an extremely gloomy 0.7% annual growth rate. That forecast matters because it's the one Derek Mackay has to use for his budgeting.

This year, the most notable tax measure was NOT to do something - not to change the threshold for paying the higher rate, sticking with those on at least £43,430.

This time, it's Phillip Hammond at Westminster who is being the fiscal radical - tearing up the Treasury orthodoxy of deficit reduction since 2010, and splurging extra cash on the health service.

Read more here.

Tory MSP Adam Tomkins highlights the top 1% of earners in the UK contribute over a quarter of income tax receipts.

He suggests this means there is a need to attract a greater number of additional rate taxpayers to Scotland.

Of course we want to attract people to live and work in Scotland as possible, replies Mr Mackay.

Mr Tomkins says the for every 20 additional tax rate payers, Scotland would gain another £1m - so what is the Scottish government doing to attract them, he asks.

The finance secretary insists the economy needs a variety of different people who contribute in a variety of ways.

He says to attract more people, the Scottish government wants a more welcoming migration policy, a good quality of life and to create high value jobs.

The SFC looked at behavioural issues in their forecasts, he states, so we are ensuring we are taking the optimised appraoch to attract people to Scotland and maintain strong public services.

Image source, bbc

cotland's finance secretary says he will work to win approval for his budget.

Derek Mackay will urge MSPs to back the Scottish government's budget plans to provide Scotland with economic certainty ahead of Brexit.

Speaking on Sunday Politics Scotland he said: "I recognise we are a minority government and I need to find a consensus in the Scottish Parliament."

The Scottish Greens have been the SNP's partners for the past two years but this year they have said they will not even enter formal negotiations until they see movement towards major reform of local government funding.

Speaking on the programme, Greens co-convener Patrick Harvie said: "We certainly won't be voting for the budget in its current form. It's clear that changes are needed."

Read more here.

Image source, PA

Scotland's Finance Secretary Derek Mackay has revealed what he wants to do with income tax in 2019-20. Will you be paying more or less? Tax consultant Deloitte has put together examples spanning different salaries.

Mr Kelly says MSPs hear week after week about the crisis in public services, so why will 99% of taxpayers pay less tax in the coming year.

Mr Mackay asks what the Labour party's tax proposals are and insists his budget is "absolutely defensible".

He argues Scotland will be the lowest and fairest tax system in the UK.

"We've taken a balanced decision around tax."

Labour MSP James Kelly says anyone earning less than £124,375 will be paying less in 2019-20 than in 2018-19 according to SPICe, external.

Is this progressive, he asks.

Mr Mackay insists the tax policy he has put across is fair and progressive.

We are not passing on the tax cut on the higher rate threshold as is being done by the UK government, he adds.

The finance secretary argues his tax proposals meet the principles the Scottish government set out to achieve, namely that it raises money in a progressive way.

He warns raising tax rates too much could actually end up in Scotland losing revenue.

Mr Crawford asks to what extent there should be concerns about revised forecasts.

The finance secretary explains that if there was to be a strategy of taking away money from day-to-day spend to put in to reserves, that would have an impact.

Mr Mackay adds it is advisable that the government gets the most accurate forecasts possible so revisions are minimised.

Image source, bbc

Tory MSP Alexander Burnett asks if Mr Mackay will be writing a letter to his successor saying there is no money left and will he be responsible for bankrupting Scotland.

Absolutely not, replies the minister, who compliments Mr Burnett for his colourful language.

Mr Mackay insists the Scottish government has produced balanced budgets and will continue to do so.

Scotland's finance secretary has said he will not pass on a tax break for higher earners that was announced by the chancellor in his UK budget.

Derek Mackay said "now is not the time" to cut taxes for higher rate tax payers as he unveiled his Scottish budget, external.

It means the gap between how much higher earners in Scotland pay has widened compared to the rest of the UK.

But Mr Mackay said most people would continue to pay less in Scotland than south of the border.

He also pledged extra funding for education, the health service, local government and infrastructure as he set out his plans for tax and spending for the next year at Holyrood.

The Conservatives claimed that higher earners were "being punished in the SNP's Scotland," with people earning £50,000 in Scotland paying about £1,500 more a year than their counterparts south of the border.

• Richer or poorer? Ask the budget calculator
• Scottish budget: At a glance
• Douglas Fraser analysis: 'Small change'
• How does tax compare with the rest of the UK?

Committee convener Bruce Crawford asks whether limits to borrowing powers concerns the cabinet secretary.

Finance Secretary Derek Mackay says he would want to have adequate reserves in the budget to protect against forecast errors.

We have a number of ways to deal with forecast errors, including borrowing, he adds.

Image source, bbc/PA/Getty images

The Finance and Constitituion Committee , externalwill shortly take evidence from Finance Secretary Derek Mackay on his budget.

He's joined by:

• Aidan Grisewood from the Scottish government
• John Nicholson from the Scottish government
• Graham Owenson from the Scottish government

Good morning and welcome to Holyrood Live on Wednesday 16 January 2018.

After last night's meaninful vote on Theresa May's Brexit deal, today we get the reaction from the Scottish government.

The ministerial statement will be at 1.30pm.

Image source, BBC/PA/Getty Images

Earlier Derek Mackay will be grilled by MSPs over his budget.

Scottish Enterprise will also face tough questioning from the Finance Committee over its support for Kaiam, the company which lade of hundreds of workers in Livingston on Christmas Eve.

Environment, climate change and land reform, rural economy ministers will be quizzed during portfolio questions.

Labour will then lead a debate entitled ‘Scotland’s Future Economy’.

SNP MSP Gail Ross’s member’s debate will focus on a Highland and Islands Enterprise survey suggesting there has been an increase in the number of young people committed to staying in the Highlands.