BY NIAMH HENNESSY
THE TOUGHEST-EVER Budget in the history of the Irish State will deliver savings of £3.6billion for the crippled Irish economy.
One of the most startling plans for cost savings is a plan to cut Government ministers’ pay by 15 per cent, bringing their salaries to £173,401 a year.
But despite Taoiseach Brian Cowen’s pay taking a hit of almost £54,000 to £207,000, he will still be one of the highestpaid leaders in the world, coming in ahead of British Prime Minister Gordon Brown who is paid almost £196,000 a year.
In similar measures hotly-tipped to be announced in Britain this week the Irish Government is also looking at targeting high earners. Public sector workers too are due to take wage cuts of between 5 and 6 per cent.
Social Welfare has been put under the spotlight in this Budget.
The Government is looking for a reduction of £7.60 in the basic Dole payment.
Old age pension is likely to remain untouched for now. The Irish Government is also looking to cut child benefit by £9 per month.
It is expected by some commentators that the planned 20 per cent cut in Dole payments for under-23s who do not agree to participate in training courses could see many deciding to leave Ireland and head to Britain in search of work.
Other announcements include A&E charges going up by £9 to £100, the cost of private beds in public hospitals increasing and a prescription charge of 45p for medical cards holders per transaction.
The Irish Government is also planning on raising £453million with a carbon tax.
A report suggested a slight increase on a litre of petrol which could see even more people travelling North to fill up their cars.
The Irish Automobile Association said the carbon levy will certainly result in people driving across the border for cheaper petrol and diesel.
The Government is unlikely to make any moves to bring Ireland’s VAT rate in line with the North, in a bid to halt shoppers heading across the border.
But it is likely to keep a closer eye on alcohol prices and an increase in excise duty any time soon is unlikely but cannot be ruled out completely.
The British Government however is likely to confirm its plans this week to increase the VAT rate as planned in the New Year.
Chancellor of the Exchequer Alistair Darling in the Government’s pre-Budget report (PBR) is also likely to target public sector workers and high earners.
In last year’s PBR Mr Darling cut VAT from 17.5 per cent to 15 per cent in an effort to stimulate consumer spending. That reduction is due to expire on New Year’s Day, although the Chancellor has been lobbied by retailers to push the date back.
The move saw even more Irish shoppers heading North but Ernst and Young have predicted that he may in time set VAT at 20 per cent, which would be good news for Irish retailers hammered by the thousands of shoppers heading North.
Meanwhile gardaí and trade unions met separately in Dublin earlier this week to formulate strike action against the Government for the pay cuts expected in the December 9 Budget.
The Irish Federation of University Teachers said if the Government cuts the pay of its members, it would sanction an equivalent withdrawal of productivity.