Ireland aims to create jobs with expansionary budget

IRELAND'S finance minister, Bertie Ahern, yesterday said that job creation was 'the overriding national priority' of a budget that raised public spending and the public sector deficit.

The Fianna Fail minister announced what is regarded as a modestly expansionary package, boosting some elements of public spending at the cost of reversing the income tax-cutting trend of recent budgets.

General government borrowing for 1993 will be 3.4 per cent of national income, slightly higher than some had expected but, Mr Ahern argued, prudent by EC standards, and close to targets for the Maastricht monetary union guidelines.

The net deficit will be Ir pounds 760m ( pounds 800m), or 2.9 per cent of GNP, permitting a 6.5 per cent rise in day-to-day expenditure and the overall Ir pounds 148m injection into public works, council house building and job creation projects.

Mr Ahern slapped a 'temporary' 1 per cent extra income tax levy on weekly incomes over Ir pounds 173 per week, and self-employed incomes over Ir pounds 190. VAT in the middle-rated band jumped from 16 per cent to 21 per cent on telephone charges, adult clothing and footwear.

Responding to calls to discourage young smokers, 10p more duty was added to the price of 20 cigarettes. Cider duty was raised by 4p a pint. Other alcohol duties remain unchanged.

In his second budget Mr Ahern balanced higher charges announced on Tuesday for public hospitals (free treatment is available only to the very low-paid and some pensioners) with an extra Ir pounds 20m to cut waiting lists. Social welfare benefits rise 3 per cent in line with inflation. Honouring another Labour promise, basic child benefit will jump 27 per cent to Ir pounds 20 a month.

Private house construction received a boost with a Ir pounds 1,000 rise to Ir pounds 3,000 in the grant for first-time homebuyers. Mortgage interest relief also rises.