Ireland austerity details: cut welfare, cut gov't jobs, cut minimum wage, tax more people, invent new taxes, cut health-care spending, cut education spending, but don't touch the lowest corporate rate in Europe

Get ready for Greek like protest in Ireland.  As Ireland unveils their austerity plan and it is going to be a difficult pill for workers unions to swallow.

Ireland won't be the only country to have to go on a diet.  Most of the Western world, including the US and Japan are still pretending that they will be able to pay off their debt and unfunded liabilities, without politically difficult cuts.  Via NY Times:

The International Monetary Fund and Ireland’s partners in the European Union insisted on an austerity budget as a condition for the $114 billion bailout, money that Ireland badly needs after it intervened to rescue its banks.

During the economic boom years before 2008, Irish banks borrowed cheaply and pumped out loans on houses and construction projects, helping to fuel an American-style housing bubble that went bust, ravaging their balance sheets.

The austerity plan calls for cuts of nearly 15 percent in Ireland’s social welfare budget, one of Europe’s most generous, saving $4 billion a year. Some 24,750 public jobs — a huge number in a country of about 4 million people — would be eliminated, cutting state payrolls down to about what they were in 2005 and saving about $1.6 billion a year. Child benefits and other social welfare payments would be reduced, and the nation’s minimum wage, now 8.65 euros, or $11.59, an hour, would be cut by 1 euro, or about $1.34, in the hope of promoting job creation.

Under the measures, Ireland’s tax net would be widened to take in some low-income workers who currently pay no tax, and a series of new taxes would be imposed on certain residential properties, as well as on 120,000 people who receive public sector pensions.

The government also plans to cut spending on health care by over $1.9 billion through a series of measures that are likely to push up the cost of private health insurance.

Capital spending on education will rise, but education programs will nonetheless take a hit starting next year, as more than $66.7 million is cut from the four-year budget. Classroom sizes may also grow if educators cannot find ways to reduce teacher payrolls.

Thousands of young Irish, along with people who have been shut out of the job market, are swelling the ranks of Ireland’s university students as they ride out a difficult economy.

Still, the austerity plan does not touch Ireland’s low corporate tax rate of 12.5 percent, which has helped to lure companies like Microsoft, Intel and Pfizer to set up operations in the country.

Comments

Popular posts from this blog

October retail sales come in strong, especially auto sales

Tea Party Buffalo Pictures

How to spot a fake Tea Partier