Politicians’ pay untouched as spending is cut by €2bn

Public Expenditure Minister Brendan Howlin announced €2bn of spending cuts but failed to cut his own or other politicians’ pay.

While he did reduce politicians’ allowances, he left their core pay untouched.

It means the Taoiseach will continue to earn €200,000 a year and Mr Howlin and fellow ministers €169,000.

Mr Howlin delivered his speech to the Dáil setting out the spending cuts after Finance Minister Michael Noonan had given details of the tax hikes.

The €136m cut to child benefit was seen as the most politically toxic for Mr Howlin and his colleagues in Labour.

Rather than taxing or means-testing the payment, a €10 cut was applied across the board, meaning low-income families will take the same hit as wealthier ones.

“We are conscious of the impact that this will have on many households. Therefore, we are providing for additional supports that are specifically targeted at low-income households,” he said.

The supports include €14m to increase the number of childcare places available for low-income workers.

In the health area, he announced the trebling of the charge which medical card holders must pay for their prescriptions, from 50c to €1.50 per item.

He said single people aged over 70 with income above €600 a week and couples with income above €1,200 would no longer qualify for full medical cards. They will be replaced with GP-only cards, which allow holders to see their doctor for free.

Mr Howlin said State fees for GPs, pharmacists, and other health service providers would be reduced to save €70m.

In education, he announced that the pupil-teacher ratio in private schools would increase from 21:1 to 23:1.

He announced that the registration fee paid by third-level students would increase by €250 next year and by the same amount again in 2014 and 2015.

On the public service, he said the Croke Park agreement had delivered significant savings but that more would be required. He reiterated his intention to seek a further €1bn in savings between 2013 and 2015.

But this will not involve further pay cuts to public service salaries, which Mr Howlin said had been cut twice already since the crisis erupted.

He announced no cuts to political pay either. However, he did announce a 10% cut to the party leaders’ allowance, the State funding granted to political parties.

He also announced a 10% cut to the maximum amount that can be claimed under the main allowance paid to individual TDs.

He pledged a fully vouched expenses system, meaning TDs will no longer be able to claim expenses without receipts.

And Mr Howlin announced that the large severance payments issued to ministers and other office-holders upon leaving office would no longer be paid.

“I do not believe this is justifiable any more. I am now proposing to introduce legislation to abolish this payment for current and future office-holders.”


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