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€600 stealth taxes will hit families in Budget

Families will have to find at least €600 more to pay stealth tax hikes after next month's austerity Budget.

But the cost to families in lost services will be far higher, with cuts to health, social welfare and education adding to the pain.

The immediate hike in taxes will come from higher VAT and carbon taxes.

It has also emerged that the promised €100 household charge -- aimed at raising €160m -- could be applied to tenants in private-rented accommodation.

These increases represent just a quarter of the total cuts and savings planned for next year -- a year in which the Government has to borrow €17.3bn just to run the country.

Outlining the shape of budgets for the next four years, Finance Minister Michael Noonan admitted that VAT rates would rise, but would not say by how much.

Over time the top rate, which is currently charged on a range of items including adult clothing, household goods and some food, drink and medicines, will go from 21pc to 24pc, but a date has not been set as to when this will happen.

Several commentators, including the Herald's Dan White, have warned against the dangers of a VAT hike in the current climate. Retail sales have fallen dramatically, with hardpressed consumers staying out of the shops.

The current carbon tax on home heating bills and motoring fuel costs could be increased to add at least another €56 to annual motoring bills and and make household heating bills soar. These rises, along with the household charge, will add at least another €600 to household annual bills.


When reductions in social welfare payments, health costs and education costs are taken into account, the bill will rise by several hundred more euro.

Another drop in child benefit is likely, along with higher charges for hospital visits and school-related costs. The minister has also refused to rule out social welfare cuts in the budget. Mr Noonan said he wanted to raise and extra €1bn in taxes on top of the €600m being paid mainly from the universal social charge.

The taxes account for just part of the total €3.8bn worth of measures being planned in the Budget. Spending cuts will account for €2.2bn, including a further €750m reduction in capital spending.

Major infrastructural projects such Metro North and DART Underground look doom and other areas such as school-building projects are also likely to suffer.