Finance Minister Michael Noonan will today announce the second half of the country’s Budget 2012 with a VAT hike and other tax increases set to dominate.
Families are today coming to terms with a hard-hitting €1.4bn package of spending cutbacks, announced yesterday.
The Government is not planning to touch income tax, opting instead to hit discretionary taxes using a 2% VAT rise and fuel duty along with motor tax hikes and new levies for employees holding property or stock investments.
Mr Noonan begins his speech at 3.45pm in the Dáil and will later explain the finer detail and thinking behind some of the tax changes.
The vast majority of the austerity plans have been imposed on the country under the terms of the €85bn EU-IMF bailout and signed off by finance chiefs in Europe.
Taoiseach Enda Kenny in a national address on Sunday night supported closer scrutiny of Dublin Budget plans by the EU.
Left-wing groups fiercely opposed to the rescue loan package and austerity measures will protest at the front of Leinster House as politicians vote on the measures.
The announcement follows an unprecedented move to split the Budget in two - spending plans on day one and tax today – with families reeling from hundreds of euro of cuts to allowances.
Parents with four children will be as much as €1,000 a year worse off when all manner of savings are figured into household budgets.
The Government slashed child benefits, winter fuel, disability and back-to-school allowances.
Student fees were hiked along with medical and school transport costs while a flat-rate property tax was introduced in the €1.4bn package.
Brendan Howlin, Minister for Public Expenditure and Reform, warned that the Government’s options were extremely limited but claimed the public would support the plan.
A family of four can expect to suffer a €432-a-year cut to their child benefit payments and soaring health insurance premiums as the state pulls out of private health subsidies – expected to force up insurance fees by about €500 a year.
The raft of other spending cutbacks – spread wide across allowances and Government departments – will take more than €1,000 a year out of average family budgets.
Mr Howlin claimed weekly dole payments had been saved from the cuts but then revealed part-time workers will see their benefits targeted, ultimately falling by a fifth.
Employers did not get away unscathed as a special redundancy rebate has been drastically reduced from 60% to 15%.
Other measures include:
* The State will no longer pay for private care in public beds, expected to force up insurance fees by about €500 a year.
* Public service pay bill slashed by €400m through a 10% cut in overtime and 5% in allowances.
* Thirty-one Garda stations to close.
* Disability payments for 18 to 21-year-olds cut by €88 to €100 and for 21 to 24-year-olds by €44 to €144.
* School transport fees doubled to €100 a year.
* Overseas Development Aid spend cut by €52.9m.
* The one-off €635 grant for a multiple birth has been scrapped.
* Qualifying age for the back to school clothing and footwear increased from two to four years – payments also cut from €305 to €250 and €200 to €150.