Ireland’s austerity budgets

Budget 2009
October 14th, 2008

Just two weeks after the blanket bank guarantee, the true extent of the financial crisis facing the State began to crystalise. Minister for Finance Brian Lenihan announced measures designed to raise an extra €2bn in taxation and to make savings of €1bn in public spending.

A one per cent levy was introduced on income up to €100,100 rising to two per cent on salaries over that amount. The standard rate of VAT was increased from 21 to 21.5 per cent. The tax on petrol rose by eight cent a litre. Duty on a standard bottle of wine went up by 50 cent.

A €200 charge on all non-principal private residences was introduced, which the Government said would be used to fund the work of local authorities.

Automatic entitlement to a medical card is ended for people over 70.

Emergency Budget 2010
April 7th, 2009

In April, the government announced its second budget in six months . Mr Lenihan told the Dáil that stabilising the public finances was "most urgent". He announced measures to raise €1.8bn in taxes and cut spending by €1.5bn.

The Government announced its plans for a National Asset Management Agency (Nama) designed to take toxic assets off the balance sheets of banks.

The income levy introduced in October was doubled and the thresholds at which it is charged were reduced. The jobseeker’s allowance for under-20s was halved to €100 a week.

Excise on auto-diesel increased by 5 cent a litre and the charge on a packet of 20 cigarettes is increased by 25 cent.

Budget 2010
December 9th, 2009

Public servants and social welfare recipients bear the brunt of the €4 billion in spending cuts announced by Mr Lenihan who said the country was on the road to economic recovery: "We have turned the corner."

The budget includes cuts of more than €1 billion in public service pay, a reduction of €760 million in social welfare, just under €1 billion on day-to-day spending and the same amount on capital projects.

Public servants faced a cut of 5 per cent on the first €30,000 of salary, 7.5 per cent on the next €40,000 and 10 per cent on the next €55,000. Social welfare recipients faced an average reduction of 4.1 per cent with those under 25 experiencing much more substantial cuts.

Child benefit was cut by €16 a month with families on social welfare compensated through an increase of €3.80 a week in the qualified child allowance.

In an effort to curb cross-border shopping, Mr Lenihan reduced excise duty on alcohol. He also announced a reversal of the half per cent increase in VAT imposed in Budget 2009.


Budget 2011
December 7th, 2010

The budget at the end of 2010 sees the Government make a further fiscal adjustment of €6bn. Most workers faced substantial tax increases. Some lower-paid workers were brought into the tax net for the first time.

The budget hits taxpayers hard through a cut of 10 per cent in the tax credits and bands, a new consolidated social charge of 7 per cent and the abolition of the PRSI ceiling.

There were cuts in the childcare allowance and increases in third-level college registration fees. The unemployed will have a cut of €8 a week in their benefits, while a similar cut also applies to the carers and disability allowance. A couple with three children and a household income of €75,000 who contribute €4,500 to their pension pot annually saw their net income fall by €1,815 in Budget 2011.

Pensioners were one of the few groups to remain unscathed, with no change in the State pension.

Fine Gael finance spokesman Michael Noonan said the Budget was the product of "a puppet Government who are doing what they have been told to do by the IMF, the EU Commission and the European Central Bank".
Budget 2012
December 5-6th, 2011

Budget 2012 is the first budget of the new Fine Gael-Labour coalition. Also, for the first time, the budget is split between two departments: Finance and the newly formed Department of Public Expenditure and Reform.

Minister for Public Expenditure Brendan Howlin announced measures to cut public spending by €2.2bn. Minister for Finance Michael Noonan's tax hikes of €1.6bn bring the overall adjustment to €3.8bn.

The payment for third and subsequent children is cut from up to €177 to €140 a month over the next two years. The back to school allowance is scrapped for two and three-year-olds and payments are reduced for all eligible children.

The threshold for the Drug Payment Scheme goes up to €132 a month, an increase of €12. Third-level registration fees increased by €250 to €2,250. The anticipated household charge of €100 was also announced.

A range of increases in indirect and capital taxes were announced. The higher rate of VAT rose by two points to 23 per cent.

The pay threshold at which workers are exempt from the universal social charge rose from €4,004 to €10,036.


Budget 2013
December 5th, 2012

An overall fiscal adjustment of €3.5 billion meant almost every adult in the State was hit by a range of measures including a property tax, reduced child benefit, extended PRSI and cuts in the entitlements for the elderly.

There were also increases in excise duty on alcohol and cigarettes, motor taxes, the student registration charge and Dirt tax on savings.

Two of the more controversial measures were a cut to the respite care grant, and the treatment of maternity benefit as taxable income.

The carer’s grant was reduced by €325 to €1,375 per annum. Excise duty went up by 10 cent on pints of beer and cider and measures of spirits, and by €1 on a bottle of wine.

Motor tax roses by between €10 and €126. A €10 a month reduction in child benefit was also announced.

Budget 2014
October 15th, 2013

A fiscal adjustment of €2.5bn was announced in a budget that included a €500 million jobs stimulus package.

The measures were intended by the Government to pave the way for the end of austerity. They included a wide range of spending cuts and revenue-raising measures rather than any major change in the tax or welfare system.

Eligibility limits for medical card holders were tightened, prescription charges were increased and maternity benefit was reduced.

There was also a reduction in the income threshold for medical cards for the over-70s, the telephone allowance was ended, and the bereavement grant was abolished.

Beer, spirits and cigarettes went up by 10 cent, while the price of a bottle of wine increases by 50 cent.

Free GP care for all children aged five and under was introduced at cost of €37 million. Payments for 22- to 24- year-old jobseekers fell from €144 to €100 a week, while 25-year- olds got €144 a week instead of €188.

– Colin Gleeson