Belfast Telegraph

Thursday 24 April 2014

Kenny: Budget as fair as possible

Ministers are expected to make more than three billion euro in savings by hiking taxes and slashing state spending

As Ireland braces itself for its sixth austerity budget in four years, Taoiseach Enda Kenny has given one last assurance it will be as fair and affordable as possible.

Spending cuts and tax hikes worth 3.5 billion euro will be announced on Wednesday but Government leaders insist it will bring the recession-shattered country a step closer to economic independence and growth.

While final preparations point to Budget 2013, new Exchequer figures showed the state finances were behind target in terms of tax take, running at 171 million euro behind profile at the end of November.

The Taoiseach said it was important to be positive about the challenges Ireland faces. He said: "We've worked very hard to make it as fair, as equitable and as affordable as is possible.

"These things are never easy and this is a challenge for Ireland, and the Budget tomorrow will be a step further for this country exiting the programme that we are in and retrieving our economic sovereignty, restoring the opportunity to grow our economy and create jobs which I think is in everybody's best interest."

Finance Minister Michael Noonan and Public Expenditure Minister Brendan Howlin will announce 1.25 billion euro in tax hikes and 2.25 billion euro in spending cuts.

A new property tax of 0.18% of the value of a home will be among the measures. This could see the owner of a home worth the national average price of 157,400 euro paying nearly 300 euro every year.

Dole payments to jobseekers will also be hit, back-to-school allowances face the chop and some elderly people will be forced to pay for prescription drugs due to a cutback in medical cards for the over-70s.

Mr Kenny's deputy Tanaiste Eamon Gilmore earlier said while there was no doubt the austere cuts and tax hikes in the Budget would be tough they will take Ireland to 85% of its debt bailout targets.

The government hopes to exit the bailout programme it entered with the Troika - the International Monetary Fund, European Central Bank and European Commission - by the end of 2013.