Ireland unveils budget cuts for 2011

[News_Editor]

Ireland unveils budget cuts for 2011

2010-12-08 02:11:24 GMT+7 (ICT)

BELFAST, IRELAND (BNO NEWS) -- The Irish government on Tuesday unveiled its budget cuts for 2011, the most savage cuts due to the economic and financial difficulties of the nation.

"The budgetary adjustments we plan for the coming four years are large. But if we postpone them, even bigger and more wrenching adjustments will be needed at a later date," said Irish Minister of Finance Brian Lenihan. "Our proposed budgetary measures have been laid out in considerable detail to give certainty to households and firms so they can plan for the future."

The government sent to the Irish parliament a six billion Euro package of cuts and taxes aimed at restoring the national finances. The cuts affect social welfare, child benefit, public sector pensions in order to reduce Ireland's 19 billion Euro deficit.

The budget provides a capital spend of €1.002 billion in 2011 down from €1.509 billion in 2010. The reduction was made in order to extend the timescale for full implementation of programs while also taking account of refocused priorities in the current economic context.

Lenihan said that child benefits would be cut by 10 euros per month to 140 euros for the first two children, and by 20 euros to 167 euros for the third child. Public sector pensions for those earning over €12,000 a year will be cut by 4 percent.

"It is the Government's strong view that the economy can continue to grow while we make the budgetary adjustments outlined in the National Recovery Plan. We need to ensure that our economic growth is built on two solid foundations: that are sustainable socially, economically and environmentally," said Lenihan.

The National Recovery Plan 2011-2014 establishes that future years will see revenues from a Site Value Tax and water charges. The new tax will offer a more stable, sustainable and reliable source of local government finance. It is expected to be an average of just over 200 Euros per dwelling.

The plan also provides for the roll-out of water metering for domestic user, with water charges to follow on a metered basis alongside a free allowance. The four-year strategy is aimed at saving an approximate €15 billion by 2014.

According to Lenihan, the budget cuts announced are necessary to secure a €85 billion bailout from the International Monetary Fund and the European Union.

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