Lenihan to deliver austerity Budget
Tuesday, April 07, 2009 - 07:12 AM
Finance Minister Brian Lenihan is today expected to detail a series of swingeing spending cuts and tax increases to get the country’s finances back on track.
The supplementary Budget will be one of the toughest in decades with the Government forced into a delicate balancing act to save the state €3.5bn.
Mr Lenihan is also expected to increase income levies and close off lucrative tax loopholes which will gain tens of millions extra for the Exchequer.
A major strategy to tackle the banking crisis will also be announced in the minister’s speech to the Dáil, closely watched by big business and international investors.
Mr Lenihan will be at his desk in the Department of Finance offices in central Dublin by 7am before a final mid-morning Cabinet meeting.
He is expected to detail the Budget at 3.45pm.
In a pre-emptive move to save costs and demonstrate the Government’s desire to share the pain of cuts, Taoiseach Brian Cowen yesterday announced he will cut the number of junior ministers from 20 to 15 after the Easter break.
Hundreds of public spending projects are also in the firing line to ease pressure on Exchequer coffers.
Other suggested targets are ’old reliables’ such as alcohol, tobacco and motor fuels, the early childhood supplement and overseas aid.
One of the Government’s biggest challenges is to increase the tax take to meet the country’s growing deficit while attempting to build confidence and limit the trend of consumers flocking across the border to the North for cheaper goods.
It is believed the Budget is unlikely to seek a cut in social welfare rates but the Government may revisit the area later in the year if inflation continues to drop.
Mr Lenihan may also raise current Pay Related Social Insurance (PRSI) ceiling rates.
Revised general economic forecasts will also be detailed covering the next four years including projections for unemployment, GDP and inflation.
More detailed projections for revenue and expenditure levels will be published when the Dáil returns from its Easter break on April 22.
