The Government’s much anticipated four-year National Recovery Plan (the “Plan”) was announced yesterday with some severe implications for the country and it’s citizens.
The main points of the Plan are listed below:
- €15bn in measures aim to bring deficit under 3% GDP by 2014
- €6bn of adjustments to be front-loaded in 2011
- An extra €1.9bn sought via income tax changes
- Standard VAT rate to rise from 21% to 23% in 2014
- Entry point for income tax to fall to €15,300 – from €18,300 currently – by 2014
- Minimum wage to be reduced by €1 to €7.65
- Reduction of social welfare spending of €2.8bn targeted
- Domestic water charges to be introduced by 2014
- Introduction of a site value tax in 2012
- Students’ contribution charge to rise from €1,500 to €2,000
- Reform of capital acquisitions, capital gains tax
- Pension-related tax changes to yield €700m
- Tax savings of €240m on public sector pension deductions
- Site valuation tax to be introduced
- Cut in public service staff by 24,750 from end-2008 levels to 2005 levels
- Overall pay adjustments of €1.2bn by 2014
- 10% pay cut, new pension scheme for new public sector entrants