Finance Minister Michael Noonan and Budget Minister Brendan Howlin told lawmakers on Wednesday that the government would introduce up to €3.5 billion in tax increases and spending cuts, saying that it will apply the painful measures fairly. It was Ireland's sixth austerity budget since it began to confront the huge costs entailed in saving its stricken banking system in 2008.
Mr Noonan announced a long list of up to €1.25 billion in tax increases, including a new tax he plans to impose on the value of residential properties, taxing maternity payments for the first time, capping pension tax credits for some higher-paid executives, and increasing taxes on drink and cigarettes.
The new property tax, which had already stirred political controversy in recent months, would be levied at 0.18 per cent of the value of the residential property. A higher charge of 0.25 per cent, dubbed "the mansion tax", would apply to properties valued at over €1 million.
The budget also included spending cuts totalling about €2 billion, including cuts in child benefit payments and unemployment programmes, and reductions in the government's overall pay and pension bill.
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