Plan means people 'can adjust own lives', claims Taoiseach
Published 25/11/2010 | 14:34
The radical €15bn four-year savings plan will allow Irish households to see how their lives will be affected, Taoiseach Brian Cowen claimed today.
Workers are facing €5bn more taxes, €3bn axed from social welfare and the minimum wage cut by €1 by 2014.
Normal business in the Dail (parliament) was suspended for the day to allow the Opposition to challenge the Government's roadmap to recovery.
"I think that this plan's announcement yesterday does give people the opportunity to see what the level of adjustment is in their own lives and plan in their own lives," Mr Cowen said.
"I think everyone in this country, knowing from their own household budget experience, knows that a country cannot continue in the aftermath of a serious crisis the likes of which we have not seen, and one of such magnitude and global impact that compared to the 1929 Wall Street Crash."
The 140-page plan detailed yesterday gives a package of reforms and savings designed to cut public spending by €10bn and raise another €5bn in taxes.
Other areas targeted are student fees up to €2,000 and 1pc VAT increases first to 22pc and then 23pc.
Trade unionists and rights campaigners warned the lowest paid would be hit with a double-whammy when income tax bands and rates dramatically widen and increase to raise €1.9bn.
In a statement to the Dail, Mr Cowen said: "I think it's true to say that the challenge we face is something we have not, this country has not had to look at for many years, certainly in a quarter of a century.
"It is clear to us that this country has by the provision of this plan, a signpost, a pathway to recovery which is within the recent experience of our own people."
Enda Kenny, leader of main opposition party Fine Gael, accused the Government of arrogance after finance minister Brian Lenihan branded any alternative to the massive cuts package "nonsense".
"I've never seen a more po-faced, sombre, demoralised beaten crowd," Mr Kenny said.
"The reason is shining out of their eyes. It's not conviction but guilt. The reason it's guilt is because you had the opportunity, the responsibility and influence to change our nation for the better and you failed.
"And the people will savage you when they get their opportunity."
The plan also includes dramatic public service reform - newly-hired workers such as teachers and nurses will be pitted colleague against colleague as they start off on 10pc lower wages than current State employees. Retired workers will also see their pensions cut.
Elsewhere, pension tax relief is to be halved and new capital gains and acquisitions taxes are to be brought in.