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Ireland's four-year austerity plan: main points

24 November 2010, 20:47 CET
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(DUBLIN) - Heavily-indebted Ireland published a four-year austerity roadmap on Wednesday in a key step towards receiving an international bailout of at least 85 billion euros (114 billion dollars).

Under-fire Prime Minister Brian Cowen has delivered a series of measures to slash a huge deficit and save 15 billion euros (20 billion dollars) by 2014.

Wednesday's austerity package comprised 10 billion euros of spending cuts and 5.0 billion euros in taxation hikes.

A budget will follow on December 7, which Cowen says must be passed by parliament before he will call a general election in the crisis-hit eurozone nation.

Here are the key points of the four-year plan:

OBJECTIVES

- Aim to reduce public deficit to target of three percent of gross domestic product, in line with EU rules. It has ballooned to 32 percent of GDP this year

- Average economic growth of 2.75 percent in 2011-2014

- Unemployment to be brought below ten percent by 2014, from its current level of over 13 percent

SPENDING CUTS

- Make welfare budget savings of 2.8 billion euros

- Cut nearly 25,000 public sector jobs to return to staffing levels last seen five years ago

- Make payroll savings of 1.2 billion euros

- Minimum wage to be cut by one euro an hour to 7.65 euros an hour, but it remains "one of the highest rates in the EU," according to the government

TAXES

- 12.5 percent corporation tax rate remains unchanged, preserving a key magnet for foreign companies to locate offices or production in Ireland

- Overhaul of income taxation that will collect an additional 1.9 billion euros

- VAT, or value added taxation on goods and services, to be hiked to 23 percent from 21 percent by 2014

- Student tuition fees to rise

- Introduction of charges for domestic water consumption by 2014

- Pension-related tax reforms


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