VAT cut and €50 'work' bonus key to jobs plan
Pension funds raided in bid to kickstart the economy
THE Government last night pinned its hopes of kick-starting the economy on price cuts and a €50-a-week work incentive -- funded by €470m of taxpayers' pensions.
It slashed the VAT rate in key areas and promised to pay 5,000 unemployed people a top-up of €50-a-week in addition to their dole to take up training places in companies.
The new drive came as the country's leading economic think-tank urged the Government to intensify the programme of cuts in public spending.
The Economic and Social Research Institute (ESRI) also called on the Government to abandon the Croke Park Agreement by cutting salaries and to raise taxes for everybody so that the country can stop borrowing by 2014.
That is a much more ambitious target than the one set by the IMF and EU as part of the bailout agreement.
In its quarterly report, the ESRI said that cuts introduced in last December's Budget had slowed growth, but further cuts would help the economy by reducing the deficit.
The report, which will be published today, also forecast that the level of unemployment will remain at 14.5pc this year.