Country braces itself for Budget
Finance Minister Brian Lenihan was this morning preparing to deliver his third budget in 14 months and one that is being widely regarded as the most important of a generation.
Cabinet ministers were being briefed this morning on the contents of the Budget before Minister Lenihan presents it to the public.
The Budget is expected to included a raft of cost-cutting measures aimed at slashing some €4bn from public expenditure, including cuts to public servants' pay and social welfare as well as the introduction of a carbon tax.
Meanwhile, a cut in excise duty on alcohol and a car scrappage scheme are now also expected to be included.
Public servants are expected to be hit with salary cuts of between 4% and 20% in a bid to save €1.3bn, while another €1.3bn must come from the social welfare bill. Child benefit payments are expected to suffer, although pensioners are believed to escape the axe.
There will also be cuts to services, capital spending on infrastructure, hikes in charges and stealth taxes as well as a new carbon tax which will increase petrol and diesel prices.
Mr Lenihan has said today's expenditure package will be the last of the "very difficult" Budgets - but it remains to be seen if he can convince the country that taking its medicine now is the only rational option.
Most independent TDs are expected to back the Government in voting to approve the Budget.
Deputy Noel Grealish of Galway West is likely to vote in favour of it after reportedly securing more money for flood victims in his constituency.
TD for Kerry South Jackie Healy Rae indicated last night he will also support the Budget after striking a deal with the Government on a hospital for Kenmare.
The expected measures have met with both support and opposition from advocacy groups representing different interests.
Brid O'Brien of the Irish National Organisation of the Unemployed wants the Government to develop a strategy that will get people back to work.
She called on the Government to produce a plan to support both the maintenance and creation of jobs.
"We lack a vision currently for the labour market, and we desperately need one," Ms O'Brien said.
Dr Sean Healy of Social Justice Ireland says welfare rates should not be touched.
"A society is measured by how it treats is most vulnerable people," Dr Healy said. "If welfare rates are reduced, then you can take it that this Government is not protecting Ireland's most vulnerable people."
Director of Retail Ireland Turlough Denihan meanwhile said it is imperative that the Government does not increase taxes.
“We’ll see more bad news in 2010 unless remedial action is taken and unless the consumer is encouraged to spend money,” Mr Denihan said.
“At the moment people are saving 12% of after-tax disposable income.
“We do not need tax increases, we need the public finances stabilized and people need to be given confidence to start spending again.”
Mark Fielding of the Irish Small and Medium Enterprises association (ISME) hit out at plans to introduce a carbon tax saying it was something the small business sector could ill afford.
"At a time when all of our costs are way ahead of our competitors right across Europe and in the UK, where our wages are way ahead of other competitors, to add another cost onto small business will just delay the recovery," Mr Fielding said.
