Savage cuts as government slashes spending raises taxes
A further €330 million will be raised through carbon tax charges, which will double to €30 a tonne over the next four years.
Prime Minister Brian Cowen stated that Ireland would have to “take some steps back to go forward again”.
"Those who can pay the most will pay most, but no group can be sheltered," he added.
“Postponing these measures will lead to greater burdens in the future for those who can least bear them, and will jeopardize our prospects of returning to sustainable growth and full employment. It’s a time for us to pull together as a people,” he said at a press briefing in Government Buildings.
Minister for Finance Brian Lenihan said the four-year plan is a sensible and rational route out of “the steep downturn”.
Tax receipts for this year will be 35% lower than in 2007, which reflects “the over-dependence on property and construction-related revenue sources during the boom years”, the Government claimed.
The Government said the plans would be like the tax structure of 2006, and rejected suggestions that it would see tax burdens return to the harsh levels of the 1980s.
The Government stated that the economic plan would see the deficit reduced to 9.1% of GDP in 2011. It is expected that Ireland’s debt to GDP ratio would reach 102% in 2013 and will fall to 100% in 2014.
Yesterday, the European Commission said that the four year fiscal plan was a “cornerstone” of the bailout package under discussion with Europe and the IMF.
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