Lenihan set to announce toughest Budget in decades

Finance Minister Brian Lenihan is set to outline the toughest Budget in a generation this afternoon.

Tax increases and massive spending cuts are on the cards as the Government seeks to plug a massive hole in the public finances.

Various ministers have already said that the brunt of the measures will target higher earners, but nobody is expected to escape the effects of the changes.

There is speculation that a special 1% tax will be imposed on incomes above a certain threshold and the €50,700 income ceiling on PRSI will be abolished.

Mr Lenihan is also expected to cut the €1,100 early childcare supplement, reduce tax relief on pensions and introduce increased taxes on cigarettes, alcohol and diesel.

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