Warning as Dublin plans £1.2bn cuts

 

The Irish Government warned there is no hiding from difficult decisions that need to be taken in the interests of the State and citizens as €1.4 billion (£1.2 billion) spending cuts were outlined.

Brendan Howlin, Minister for Public Expenditure and Reform, detailed the first half of Budget 2012 with the stark assessment that the country's tax take is down one third in three years.

But he claimed that the economic crisis in Ireland has been stabilised.

"Twelve months ago we were Europe's problem. Now problems in the European and global economy threaten our recovery," he said.

Mr Howlin confirmed how spending will be dramatically reined in to balance the books - 1.4 billion euro (£1.2 billion) cuts in day-to-day expenditure and a 755 million euro (£648 million) reduction in capital spending.

As part of the savings, the public service pay bill will come down by 400 million euro (£343.3 million) next year.

The Government also set out its stall for the seven-step Action Plan for Jobs by improving competitiveness and intensifying competition in sheltered sectors; supporting indigenous start-ups; assisting their growth; attracting inward entrepreneurial start-ups; deepening foreign direct investment; developing community employment; and exploiting sectoral opportunities.

Some of the more hard-hitting social welfare cuts include changes to child benefit. While payments for the first and second child remain the same, the monthly rate for a third child falls from 167 to 148 euro, while for the fourth and any subsequent children it is being cut from 177 to 160 euro.

Mr Howlin said: "The sharp reality that this Government is facing is that the level of social welfare expenditure now in place cannot be sustained from the funding base now available. As unpalatable as it might be, we must make some difficult choices in order to contribute to the reduction of the budget deficit."

The Government will not reduce any weekly rate of social welfare payments, he said.

The vital fuel allowance scheme will be pared back with the season it operates down from 32 to 26 weeks, saving 51 million euro (£43.8 million) next year.

The one-parent family payment will also be reduced, giving headline savings of 20.7 million euro (£17.8 million), while employers will no longer be so heavily reimbursed for redundancy schemes as a special rebate is reduced from 60% to 15% to save 81 million euro (£69.5 million).

As expected, Mr Howlin revealed that the Government is to reduce the budgets of health, social protection and education by more than 1 billion euro (£858 million).

Elsewhere, the Department of Agriculture, Marine and Food will see savings of 105 million euro (£90.1 million); Transport, Tourism and Sport 45 million euro (£38.6 million); and Environment, Community and Local Government down by 34 million euro (£29.2 million).

The Government's decisions will cut public spending to 55.8 billion euro (£47.9 billion) next year compared with 57.7 billion euro (£49.5 billion) this year.

Mr Howlin said Ireland's budgetary system is old-fashioned and would also be radically overhauled, with emphasis on planning for three-year terms.

"The fact is that Ireland's traditional system of budgeting no longer works for us," he said.

"The old budgeting system that we have inherited from our past is secretive and opaque. It has not led to sustainable spending policies, to proper value for money, or to good outcomes for our citizens."

Mr Howlin, a Labour minister in the coalition Government with centre-right party Fine Gael, claimed the parties will maintain core social welfare payments including jobseeker's allowance and state pensions despite the massive cuts.

"This Government is in effect a national Government containing the two largest parties in the State. It provides the stability necessary to plan and work our way out of this crisis. It won't be easy, and we will not resolve our problems overnight," he said.

"No Government, whatever its numbers, wants to be the bearer of bad news. But our options are extremely limited. The public knows this. It is wary of those who offer simplistic options."

PA

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Tradewind Recruitment: Science Teacher

£90 - £140 per day: Tradewind Recruitment: I am currently working in partnersh...

Tradewind Recruitment: Year 3 Primary Teacher

£100 - £150 per day: Tradewind Recruitment: Year 3 Teacher Birmingham Jan 2015...

Ashdown Group: Lead Web Developer (ASP.NET, C#) - City of London

£45000 - £50000 per annum + Excellent benefits: Ashdown Group: Lead Web Develo...

Tradewind Recruitment: Key Stage 2 Teacher Required in Grays

£21000 - £40000 per annum + Negotiable: Tradewind Recruitment: Key Stage 2 tea...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee