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Biting social welfare cuts could push already struggling Irish families into a poverty trap Photo by: Google Images

Families hard hit on day one of Irish Budget – and there’s more to come

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Biting social welfare cuts could push already struggling Irish families into a poverty trap Photo by: Google Images

The average Irish family is already $1500 a year worse off after Day One of the Austerity Budget – and there’s more pain to come on Tuesday.

The first instalment of the unique two day Budget 2011 announcement saw Minister for Public Expenditure and Reform Brendan Howlin reveal over $2billion worth of cuts.

Howlin was the doomsday messenger on Monday with Finance Minister Michael Noonan set to deliver a second round of bad news for hard pressed families on Tuesday.

Already the Fine Gael-Labor Party coalition have been heavily criticized after cutting child benefits, winter fuel assistance for the elderly, disability payments and back-to-school allowances.

Student fees were also increased along with medical and school transport costs while a flat-rate property tax was introduced in the €1.4bn package.

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Minister Howlin claimed public support for the potentially crippling savings, a claim later rejected by opposition parties.

“It provides the stability necessary to plan and work our way out of this crisis. It won’t be easy, and we will not resolve our problems overnight,” said Howlin.

“No government, whatever its numbers, wants to be the bearer of bad news. But our options are extremely limited. The public knows this. It is wary of those who offer simplistic options.”

Noonan will add to the bad news with a 2pc VAT increase, fuel and motor tax hikes and new levies for employees holding property or stock investments. Medical insurance is also set to rise dramatically.
Criticism was swift after Howlin announced his plans to the Irish parliament.

Fianna Fail spokesman Sean Fleming said: “There are a number of decisions that you have announced here today that are simply unfair and unpalatable - you’re hitting the old by hitting fuel allowance, you’re hitting the young by hitting child benefit.”

Sinn Fein’s Mary Lou McDonald said: “Rising unemployment, emigration, the collapse of our domestic economy and the misery facing struggling families are a damning indictment of Labour and Fine Gael’s record in government.

“They chose to protect those on sky high wages and pension payouts in the upper echelons of the public sector. There’s no chance of this Government giving a ‘times are tough’ pep talk to judges, hospital consultants and former failed leaders on big buck pensions.”

As part of the new measures, the public service pay bill will be slashed by $560million through a 10 per cent cut in overtime and 5 per cent cut in allowances while 31 police stations are to close.

Child benefit will be brought down to just under $200 for all children over the next three years.

 “We can only deal with the reality that we have. It’s the real figures. That’s the reality we are facing now,” added Minister Howlin.

“I’m certainly not in the business of cutting where I don’t have to. If we can provide as best we can the best social protection network to protect the most vulnerable, that’s the objective of this Government.”

Social justice campaigners have already attacked the measures in the new Budget.

A spokesman for the Society of St Vincent de Paul said: “We know that the proposed increases in indirect taxation that have already been flagged by Government will be much harder to bear for those on low incomes and we fear that the families who have been hit today look set to be hit by tomorrow’s announcements as well.”

Age Action said the 20 per cent cuts to fuel allowance would create huge hardship for the elderly.

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