Debt by a thousand cuts
Delivering the first half of the budget yesterday, Public Expenditure Minister Brendan Howlin announced €2.2 billion of spending cuts which will leave middle-income families facing significantly increased bills.
Some of the cruellest cuts were reserved for the most vulnerable, including young people with disabilities and those reliant on state help to heat their homes.
Among the measures are:
* Cuts to child benefit of €19 for the third child and €17 for fourth and subsequent children.
* A doubling of the primary school transport charge to €100.
* Cuts in the back to school allowance of €50 to €55.
* An increase of €250 in the third-level registration fee and a reduction in student grants.
* Increased charges for private beds in public hospitals, with the VHI warning this could drive up premiums by 50%.
Separately, Environment Minister Phil Hogan confirmed that a €100 household charge — a precursor to a property tax — will be introduced for homeowners from January.
When combined, the measures could cost families — especially those with up to four children — up to €1,000 or more next year.
A family of four young children would lose €434 in child benefit, fork out €110 more for school transport, and be hit with the €100 charge if they own their home. The doubling of their healthcare premiums would push the total bill above €1,000.
And Finance Minister Michael Noonan will pile on extra pressure today when he announces the second half of the budget, including car and carbon tax hikes and an increase in VAT which will make goods more expensive.
But it was the cuts aimed at some of the most vulnerable in society which attracted the most criticism yesterday.
Although the main social welfare rates were left untouched, the Fine Gael- Labour Coalition decided to:
*Slash the disability allowance by €88 a week for those between the age of 18 and 21 and by €44 for those between 22 and 24.
* Cut the length of time the fuel allowance is paid from 32 to 26 weeks, a move which Age Action said would leave some older people choosing between heating and food.
* Reduce the amount lone parents can earn from work before seeing their one-parent family allowance affected.
Mr Howlin claimed the cuts were spread fairly, with the Government seeking to ensure “that the most vulnerable in our society are protected as far as possible”.
But in a tacit admission that Labour was breaking election promises, Mr Howlin said: “As a Labour minister I never expected that I would be making the type of announcements I am making today.”
Of the €2.2bn in cuts, €755m is being taken from the capital budget on infrastructure projects such as rail and roads, €543m is being cut from health, €475m from social protection, €132m from education and the remainder from the other departments.
About €79m is being taken from the Garda budget, which will result in 31 stations closing, while the overseas aid allocation is being cut by €52.9m.
Sinn Féin accused the Government of targeting vulnerable people and low- and middle-income families “with the same failed austerity budgetary measures as pursued by Fianna Fáil”.
But the reaction from Government backbenchers was muted, suggesting the vast majority have accepted the spending cuts and will not rebel against them.
* Social welfare savings of €475m.
* Healthcare savings of €543m.
* Education savings of €132m.
* Public service pay bill will fall by €400m.
* Department of Agriculture, Marine and Food savings of €105m.
* Department of Transport, Tourism and Sport savings of €45m.
* Department of Environment, Community and Local Government savings of €34m.
* No reduction in weekly social welfare payments.
* Weekly carer’s allowance and carer’s benefit rates will not change.
* €20m allocation will be made for a new labour market activation fund, which will be targeted at the long-term unemployed, delivering upward of 6,500 places.
* Reduced allowances and secretarial supports for former taoisigh.
* Payment for third child cut to €148 per month, with fourth and subsequent children down to €160. Savings of €45m.
* Fuel allowance cover cut from 32 to 26 weeks. Savings of €51m.
* Back to school allowance for two and three-year-olds is abolished. Savings of €30m.
* Jobseekers’ benefit to now be based on a five-day week, not six. Savings of €5.9m.
* Reduction in mortgage interest supplement. Savings of €22.5m.
* Reduction of student maintenance grants, cutting of grants to post-graduates. Savings of €15m.
* Third-level student registration fees will rise by €250. Savings of €18.5m.
* Employer redundancy rebate cut from 60% to 15%. Savings of €81m.
* Monthly threshold for the drug payment scheme jumps from €120 to €132. Savings of €12m.
* Changes to the one-parent family payments. Savings of €20.7m.
* 31 Garda stations to be closed next year. About €79m in savings from reductions in overtime and allowances.
* Primary school transport charge to be doubled to €100.
* Disability allowance has been slashed from €188 to €100 for 18 to 21-year-olds and from €188 to €144 for 22 to 24-year-olds.
