Ireland has been left reeling from a savage four-year budget plan which will impose three billion euro social welfare cuts, axe 25,000 public jobs and hike income tax.
Taoiseach Brian Cowen warned that no-one could be sheltered from the Government’s last-gasp 15 billion euro (£12.6 billion) economic recovery plan as he clings to power.
The minimum wage will be cut by one euro to 7.65 (£6.48), and in a double-whammy, income tax bands and rates will dramatically widen and increase to raise 1.9 billion euro (£1.6 billion).
In the public service, newly-hired workers such as teachers and nurses will be pitted colleague against colleague as they start off on 10% lower wages than current State employees.
The Opposition, unions and rights campaigners branded the cuts a savage attack on the most vulnerable and the working poor. But the Taoiseach rejected claims that the draconian blueprint targeted those on the breadline and insisted those who have the most, pay the most.
“We’re not in a position to say we can shelter people from decisions,” he said. “Those who have least will be protected to the greatest extent we possibly can.”
Jack O’Connor, one of the country’s top trade unionists with the Siptu group, lashed the Government’s National Recovery Plan, saying: “It has all the hallmarks of a roadmap back to the stone age. As well as that a declaration of war on lower income people in the country who contributed least to the cause of the problems.”
The 2014 plan includes savings and tax reforms, including a reduction in day-to-day spending by seven billion euro (£5.9 billion), with VAT rising by 1% to 22% in 2013 and another 1% to 23% in 2014. This is in order to raise 620 million euro (£524 million).
Student fees are increasing to 2,000 euro (£1,691), water metering will be introduced and property and re-zoned land will be levied under a Site value Tax to raise 530 million euro (£448 million).
Carbon tax charges will double to 30 euro a tonne, raising 330 million euro (£279 million), while a range of tax expenditures will be curtailed to claw back 755 million euro (£638 million).