Lenihan: Budget measures 'a necessary evil'

Hundreds of thousands of Irish taxpayers were hit in the pocket today by a sweeping range of direct and indirect taxes unveiled in Finance Minister Brian Lenihan's maiden Budget.

In one of the toughest financial packages in two decades, Mr Lenihan warned that everybody had to play their part to help the economy out of the current recession.

A 1% levy was placed on all salaries up to €100,100 euro and 2% above that level, while Government ministers and senior public servants took a 10% pay cut.

Mr Lenihan admitted that the 1% levy demanded solidarity from all taxpayers, but added: "There is too much at stake: we all have too much to lose by not acting now."

Opposition finance spokesman Richard Bruton of Fine Gael told the Dáil that the Budget was a direct hit on thousands of working people already struggling to pay the bills.

Labour Party finance spokeswoman Joan Burton said during the debate: "Middle income families have been mugged by the minister."

She likened the Budget to "a Halloween B-movie, Nightmare on Merrion Street, with mood music from the shower scene in Psycho."

Sinn Féin's Dail leader Caoimhghín O' Caolain described the Budget as a "disgrace" and labelled it "a programme for emigration".

However Mr Lenihan cautioned that turmoil in international financial markets had helped sparked the most critical Irish economic crisis in a generation.

"We are a small nation facing a major challenge in these uncertain times. We must all pull together if we are to return to more prosperous times."

Opposition leader Enda Kenny said the Budget was "savage, crude and totally lacking in inspiration."

Levies were placed on second homes and car parking spaces while further excise duty was heaped on to wine, cigarettes, a bottle of wine and petrol.

A €10 air departures tax for each passenger was described as "anti-consumer, anti-tourism and anti-business" by airline Aer Lingus.

Among the green measures, tax relief was provided to clean up polluted sites while commuters were encouraged to cycle to work.

Mr Lenihan used his 50-minute Budget speech to urge the country's citizens to "pull together" and help the economy return to boom times.

He said: "(A global) crisis presents danger and today we have taken action to meet that danger.

"This Budget provides an opportunity for us all to pull together and play our part according to our means so that we can secure the gains which have been the achievement of the men and women of this country."

He then added, to applause from Government benches in the Dail chamber: "It is no less than a call to patriotic action."