€1bn in extra charges to hit household budgets this year

CELTIC Tiger-style living standards will be heavily hit from the start of the year as the Government gets ready to rake in more than €1 billion in new charges.

The biggest raid on household cash flow will be the budget’s 1% levy on incomes up to €100,000, which will deliver several hundred million euro into the exchequer’s coffers.

Hikes are also planned in Luas fares from January 5 and the cost of taking the bus or the train are also expected to rise.

Since the October 14 budget, the public is already reeling from an 8 cents per litre increase on petrol, 50c extra on a pack of 20 cigarettes and 50c on a bottle of wine.

A 0.5% increase on the standard VAT rate, in effect since December, will take in €208 million during 2009.

Living standards enjoyed during the boom will be hit in 2009, according to Consumers’ Association of Ireland chief executive Dermott Jewell.

“I think 2009 will be known as ‘the year of living on the edge’ as all income groups will be hit with extra charges, thus severely reducing their disposable income levels and capacity to make ends meet,” said Mr Jewell.

Labour deputy leader Joan Burton said Finance Minister Brian Lenihan should be renamed the Minister for Hardship as “he is solely responsible for this litany of stealth taxes”.

“Anybody who has a job, a car, a house or gets sick will be targeted.

“If the Government thinks it can straighten out the public finances by imposing sneaky taxes and charges, it is very much mistaken,” she added.

However the Government believes sacrifices have to be made to cope with the downturn.

From yesterday, motorists will fork out an extra 4% in motor tax for cars under 2.5 litres and 5% for bigger vehicles. The Government expects to yield an additional €40m in this area in 2009.

Accident & Emergency charges will increase from €66 to €100 for non-medical card holders who don’t have a letter from their GPs.

Staff who get a free parking space from their bosses will be subjected to a €200 levy per year.

The controversial air travel tax, which imposes a maximum of €10 on passengers leaving Irish airports, comes into effect at the end of March.

People who own second homes will also be targeted with a €200 charge introduced during 2009.

Other measures such as DIRT tax on life assurance policies and investment funds will also increase by 3%, yielding €85m to the exchequer. A 2% rise in capital gains tax will take in €160m during 2009.