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