The Dail: Ireland's national parliament

The Irish Government’s four-year budgetary plan is driven by the goal to show Europe that it can reduce its deficit, from a massive 32 percent of national income this year, to three percent by 2014.
 
It will be the most painful budgets ever passed by the State. It will contain $20.4 billion spending cuts and taxation increases to achieve the low three percent deficit target.
 
Regardless of whether Fianna Fail are still in office Fine Gael and Labour are also both committed to carrying out the four-year plan.
 
It will include:
 
Cut of 20,000 public sector jobs
 
So far 11,000 jobs have been lost due to the moratorium on replacing those who retire or leave. The budget is now seeking 5,000 redundancies in the Health Service Executive. The rest of the numbers, to finalize as 20,000 by 2014, will also be achieved through the moratorium.
 
This target is far larger that the Croke Park agreement’s 14,000 or on Bord Snip Nua’s 17,000.
 
Levy on public sector pensions
 
Introduction of a levy on public sector pensions to bring them up to $272 billion.
 
The Budget will target retired public service workers who receive an additional pension as well as their state pension.  This year the bill for public service pensions is $3.8 billion.
 
Minimum wages
 
There will be a cut to he minimum wage of €1 ($1.35). This means the minimum wage will stand at €8.65 ($11.75).
 
This has long been called for by employer’s groups however it is also one of the most controversial cuts to be made due to its effect on the lower paid worker.
 
Minister for Finance, Brian Lenihan commented over the weekend that it had “increased far beyond the rate of inflation" over the past ten years.
 
Widening the tax net

 
This will mean that 50 percent of workers who pay no tax will now need to pay tax.
 
This move has also been controversial as it will likely hit those lower-paid workers who are also being hit by the drop in the minimum wage.
 
A five percent cut in child benefits and other welfare payments

 
These cuts to welfare payments will exclude the old-age pension.
 
Recently, Eamon O’Cuiv, Social Protection Minister, pointed out that the Irish state is paying $160 million per day on social welfare.
 
Benefits being cut will include most social welfare payments including, child benefit and job seekers allowance.
 
Cuts to legal fees
 
Each year the State spends $679.5 million on legal fees. Legal fees along with other professional fees were cut by eight percent in last year’s budget and they will be cut further in this plan.

Property tax introduced and stamp duty cancelled
 
The property tax could be introduced as early as next year in the form of a “local services charge” of $135.
 
This amount could be increased each year until 2014. By this time the State should have introduced a property tax based on the value of individual homes.
 
Stamp duty, a system which has been widely criticized will be eradicated.
 
Water charges

 
As of the December Budget there will be no water charges but there are plans to introduce them and install water meters within the next two years.