Ireland awaits austere budget
Baku, December 5 (AZERTAC). Ireland remains in crisis, Taoiseach Enda Kenny has warned. Ahead of the country’s Budget, Mr Kenny addressed the nation to tell the public they are not to blame for the economic collapse. The Taoiseach warned that Ireland is spending €16 billion more than it is taking in from taxes. “Let me say this to you, you are not responsible for this crisis,” said Mr Kenny.“My government is determined that now the necessary decision and challenges are made to ensure that this is never allowed to happen again.”
The historic address was the first of its kind in three decades. Charles J Haughey made a similar appeal in 1980 when he claimed the country was living beyond its means, and before him, taoisigh Jack Lynch and Garret FitzGerald delivered their own addresses at times of national crisis.
Budget 2012 is the Fine Gael-Labour coalition’s first attempt to mend the country.
It hopes to do this by making an adjustment of €3.8 billion. Public Expenditure Minister Brendan Howlin will announce today that €2.2 billion of that will be made through public spending cuts, which will include a 700 million euro reduction in welfare, health and education spending.
He is also expected to announce that one billion euro of the 2.2 billion will be sliced off the public service bill, while 500 million is likely to be cut from the health budget.
The second half of the Budget will be announced tomorrow, which marks the 90th anniversary of the signing of the Irish Treaty and the creation of the Free State.
The auspicious date will see Finance Minister Michael Noonan outline €1.6 billion of savings through tax hikes, including a two per cent rise in VAT, a motor tax rise, a three per cent hike in deposit interest retention tax and a hike among the lowest bands of the Universal Social Charge.
The Irish Tax Institute has warned the Government that average workers were already reaching tipping point following the last three years of austerity budgets, but the Taoiseach has argued that all hikes are necessary on the road to recovery.
As such, Mr Kenny said he chose to address the Irish people directly as the nation faces such a crisis together - as a community, as an economy and as a country. Mr Kenny said it was important that people realise the extent of the problems that lie ahead.
He also warned that everyone is likely to feel the brunt of the spending cuts and tax hikes, one way or another. He pointed out that projects such as Metro North would be sacrificed as the Government endeavours to make the €3.8 billion in savings to reach its deficit targets.
The Government must come up with a total €12.4 billion between now and 2015, under the conditions of the EU/IMF bailout that took place last year. Mr Kenny made clear that the Government’s key focus and route out of the economic crisis was getting people back to work and job creation. He said that working gives the Irish people both meaning and dignity. In protecting workers and jobs, the Taoiseach pledged to protect income tax and promised it would not increase as part of the Budget.
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