Gilmore: Budget will put end of austerity in sight

An end to crippling tax hikes and tough spending cuts will be nearly in sight following the Budget, Tánaiste Eamon Gilmore claimed today.

He said while the €3.5bn of adjustments due to be announced tomorrow will be tough, Ireland will have achieved 85% of its debt bailout targets.

“It will therefore put the end in sight for this type of Budget,” said Minister Gilmore.

“What we are seeking to do is to protect the most vulnerable and those that have the most will contribute the most.”

Ireland hopes to exit the bailout programme it entered with the Troika – the IMF, European Central Bank and European Commission – by the end of 2013.

Finance Minister Michael Noonan and Public Expenditure Minister Brendan Howlin will announce the sixth austerity Budget to hit the country since the collapse of the economy in 2008.

They are expected to make the €3.5bn in savings by hiking taxes by €1.25bn and slashing State spending by €2.25bn.

A new property tax imposed on all homeowners will make up much of the new revenue raised.

Most will be hit with a charge of 0.18% of the value of their property while those with homes worth more than €1m will be taxed 0.2%.

Motor tax is also expected to increase, along with the other usual suspects such as cigarettes and alcohol.

The elderly are also likely to take a hit, with more pensioners having to pay for prescription drugs due to a cutback in medical cards for the over-70s.

Other cuts expected within social welfare are likely to include a reduction in dole payments to jobseekers without five years of PRSI payments behind them.

Back-to-school allowances for clothing and footwear are also likely to face the chop.

Some €24bn in cuts and new taxes have been introduced since the economic crisis began.

This included adjustments of €3.8bn in last year’s Budget announcement – among them a VAT hike and a savage 60% motor tax increase for the greenest vehicles.

A further €3.1bn package is expected for 2014 and €2bn of savings for 2015.