The average Irish household will have to pay up £3,000 in extra taxes under a four year austerity plan required as the precondition for an EU-IMF bailout.
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Bruno Waterfield
Telegraph
Between 2011 and 2015, the Irish government must make £8.5 billion of spending cuts and collect an additional £4.2 billion in taxation with an austerity programme that will bring Ireland’s generous welfare state to an end.
There was more bad news for Ireland this morning after Standard & Poor cuts its debt rating two points as contagion threatens to spread through the rest of the euro region.
The EU has warned the fragile Irish government that it must find savings worth £5 billion next year, in what is expected to be a deeply controversial 2011 budget to be unveiled on December 7.
EU and IMF officials will police the plan and Ireland has been warned that if targets are not met then euro zone loans, totalling £72billion over three years, will be withheld until tax increases and spending cuts are ratcheted up.
Middle class Irish families face the loss of tax credits and low paid workers, totalling 50 per cent of the labour force, will start to pay taxes for the first time.
The current entrance level for income tax is £15,506 for a single person and £27,071 for a married couple with children, thresholds that will rise over the next four years.
Ireland’s minimum wage is to be cut 13 per cent and all Irish households face a new £257 property tax from 2012. Welfare payments, including jobseekers allowance and child benefit, will be cut five per cent or £2.5 billion.
Breaking a previous agreement with Irish trade unions, the public sector payroll will be cut by £847 million with 27,000 civil service jobs lost.
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