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| Ireland unveils emergency budget | Ireland unveils emergency budget |
| (19 minutes later) | |
| The Irish Republic has unveiled its second budget in six months to deal with its sharply contracting economy. | The Irish Republic has unveiled its second budget in six months to deal with its sharply contracting economy. |
| The emergency budget includes higher taxes and a reduction in spending, to boost the public finances. | The emergency budget includes higher taxes and a reduction in spending, to boost the public finances. |
| Finance Minister Brian Lenihan also said an independent agency would take over banks' bad assets to try and restore lending. | |
| Dublin is having to deal with a deepening recession while being forced to correct the worst deficit in Europe. | |
| The finance minister said the Republic had relied too heavily on the housing sector, which had proved to be a bubble. | |
| But speaking before the Dail, Brian Lenihan said it would be wrong to assume that it was only the collapse in the housing and construction sector which was to blame for the Republic's recession. | |
| It had been especially hard hit due to the nature of Ireland's small and open economy, he said. | It had been especially hard hit due to the nature of Ireland's small and open economy, he said. |
| Any future economic recovery would have to be based on a revival in exports. | Any future economic recovery would have to be based on a revival in exports. |
| Key aims of the budget include: | Key aims of the budget include: |
| • Putting the public finances in order | |
| • Restoring the damaged banking system and restoring credit | |
| • Regaining competitiveness, increasing exports and driving down costs | |
| • Protecting jobs and improving investment in training | |
| • Restoring reputation abroad. | |
| 'Bad assets bank' | |
| Looking ahead, Mr Lenihan lowered his forecast for economic growth, saying the economy was likely to contract by 8% in 2009, more than a recent forecast of 6.75% and significantly higher than the 3% contraction experienced in 2008. | |
| He said this change marked "a serious decline in national living standards: the sharpest fall on record. Forecasts for 2010 are not as severe." | |
| He added that consumer prices would drop by almost 4% this year. | |
| In light of the deteriorating in the finance sector, Ireland will become one of the first country's in the world to establish an agency which will remove toxic assets from banks. | |
| This, the finance minister said, would help give banks a "clean bill of health", reduce uncertainty in the system and try to get credit flowing again to businesses and individuals. | |
| Taxes | |
| As for taxes, he reiterated that those earning the most should pay the most. | |
| A person on the minimum wage, about 17,500 euros annually, will be asked to pay 2% of their wages. | |
| Someone earning 50,000 euros per year, 4% of their income, while anyone earning 300,000 euros annually will pay 9% of their income. | |
| Mr Lenihan said tax on cigarettes would rise by 25% but there would be no increase in duty on alcohol or petrol as he was concerned any rise would lead to a loss of revenue. | |
| Did you watch the budget? What is your reaction? Send us your comments using the form below. | |
| Send us your comments using the form below. | |
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