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| Version 2 | Version 3 |
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| Tough 2010 Irish budget unveiled | Tough 2010 Irish budget unveiled |
| (about 1 hour later) | |
| The Irish government has unveiled one of the most severe budgets in the Republic's history. | The Irish government has unveiled one of the most severe budgets in the Republic's history. |
| Finance Minister Brian Lenihan announced pay cuts for public sector workers, as part of efforts to achieve savings of 4bn euros ($5.9bn; £3.6bn). | Finance Minister Brian Lenihan announced pay cuts for public sector workers, as part of efforts to achieve savings of 4bn euros ($5.9bn; £3.6bn). |
| Taoiseach Brian Cowan will have his pay reduced by 20%. "Those at the top will lead by example," Mr Lenihan said. | Taoiseach Brian Cowan will have his pay reduced by 20%. "Those at the top will lead by example," Mr Lenihan said. |
| The Irish economy will shrink by 1.25% in 2010, he forecast. He had previously estimated a contraction of 1.5%. | The Irish economy will shrink by 1.25% in 2010, he forecast. He had previously estimated a contraction of 1.5%. |
| The economy is expected to shrink by 7.5% this year, confirming a previous reading. | The economy is expected to shrink by 7.5% this year, confirming a previous reading. |
| "Our economy is still in a weakened condition, and our self confidence as a nation has been shaken," Mr Lenihan said. | "Our economy is still in a weakened condition, and our self confidence as a nation has been shaken," Mr Lenihan said. |
| "The government's strategy over the last 18 months is working and we can now see the first signs of a recovery here at home and in our main international markets." | "The government's strategy over the last 18 months is working and we can now see the first signs of a recovery here at home and in our main international markets." |
| Richard Bruton, finance spokesman for the opposition Fine Gael party, called the budget "jobless and joyless". | Richard Bruton, finance spokesman for the opposition Fine Gael party, called the budget "jobless and joyless". |
| He added that the proposed cut in the Taoiseach's pay was "simply a sham" and did not take into account previous adjustments. | He added that the proposed cut in the Taoiseach's pay was "simply a sham" and did not take into account previous adjustments. |
| The real cut was much lower than 20%, he said. | The real cut was much lower than 20%, he said. |
| Planned savings | Planned savings |
| Mr Lenihan announced savings in 2010 of: | Mr Lenihan announced savings in 2010 of: |
| • 1bn euros on the public sector pay bill. Public servants will face pay cuts, ranging from 5% on those earning 30,000 euros to 15% on those earning more than 200,000 euros | • 1bn euros on the public sector pay bill. Public servants will face pay cuts, ranging from 5% on those earning 30,000 euros to 15% on those earning more than 200,000 euros |
| • 760m euros on social welfare | • 760m euros on social welfare |
| • 980m euros on day-to-day spending programmes | • 980m euros on day-to-day spending programmes |
| • 960m euros on investment projects. | • 960m euros on investment projects. |
| But he said the pay cuts in the public sector would not apply to existing public service pensioners. | But he said the pay cuts in the public sector would not apply to existing public service pensioners. |
| He also reduced the rates of child benefit by 16 euros per month, bringing the lower rate to 150 euros per month and the higher rate to 187 euros per month. | He also reduced the rates of child benefit by 16 euros per month, bringing the lower rate to 150 euros per month and the higher rate to 187 euros per month. |
| And he introduced a carbon tax, equivalent to 15 euros per tonne. | And he introduced a carbon tax, equivalent to 15 euros per tonne. |
| Other taxation measures include switching to a simpler income tax system with just two charges on wages, and bringing VAT down to 21% from 21.5%. | Other taxation measures include switching to a simpler income tax system with just two charges on wages, and bringing VAT down to 21% from 21.5%. |
| Excise on beer, wine and spirits was reduced, but there was no change in tobacco tax. | Excise on beer, wine and spirits was reduced, but there was no change in tobacco tax. |
| Corporation tax - which has been a draw for foreign investors in the Irish Republic over the last few years - was held at 12.5%. | Corporation tax - which has been a draw for foreign investors in the Irish Republic over the last few years - was held at 12.5%. |
| Lowering the deficit | Lowering the deficit |
| The Irish deficit currently stands at 12% of GDP. European Union (EU) rules state that countries are expected to keep their budget shortfalls below 3% of GDP. | The Irish deficit currently stands at 12% of GDP. European Union (EU) rules state that countries are expected to keep their budget shortfalls below 3% of GDP. |
| While this government was partly responsible for the current economic mess we find ourselves in, this tough budget reflects the 'real-economic' and is the only way to a real recovery Steven Nestor, Dublin, in reaction to the announcement Read your comments | |
| But Mr Lenihan said if it were not for action taken by the government, the situation could have been much worse. | But Mr Lenihan said if it were not for action taken by the government, the situation could have been much worse. |
| "The government over the past 18 months has made budgetary adjustments of more than 8bn euros for this year," he said. | "The government over the past 18 months has made budgetary adjustments of more than 8bn euros for this year," he said. |
| "Had we not done so, the deficit would have ballooned towards 20% of GDP - a level at which the very financial survival of this country would have been at risk." | "Had we not done so, the deficit would have ballooned towards 20% of GDP - a level at which the very financial survival of this country would have been at risk." |
| He went on to say that he expects the deficit to come down over the next few years - to 11.6% next year, 10% in 2011 and to reach 2.9% in 2014, thereby reaching the EU target. | He went on to say that he expects the deficit to come down over the next few years - to 11.6% next year, 10% in 2011 and to reach 2.9% in 2014, thereby reaching the EU target. |