Taxes set to be hiked as growth stalls

A SHOCK halving of the country’s economic growth forecast by the IMF to 0.5% has triggered fears of renewed tax hikes and fresh public sector pay cuts while the Cabinet met to try to get a grip on the worsening situation.

Ministers issued thinly veiled warnings that both the Croke Park deal and election pledges on income tax may need to be abandoned in the wake of the dramatic downgrading of the country’s weak fiscal position. Public Expenditure Minister Brendan Howlin said “pain for everyone” was unavoidable if the financial situation was to be righted as the nation had been reduced to relying on “foreigners paying our way”.

But he denied that next month’s jobs budget — likely to contain revenue-raising measures such as levies or taxes to pay for work schemes — would need to be expanded into an emergency mini-budget.