February 17, 2011
By Staff Reporter
It was the government’s second budget in six months and its provisions will come into force on May 1.
Widely described as an “emergency” budget, it was prompted by the republic’s fast contracting economy which has raised fears of out of control plummeting public finances and even more job losses.
And the fiscal pain might not be over yet as Lenihan pointed to other measures that might need to be implemented in the months ahead.
As budget day, a damp and dreary one, dawned, Taoiseach Brian Cowen’s government faced the double challenge of dealing with a deepening recession while being forced to correct the biggest budget deficit in Europe.
Unemployment has already risen to almost 12 percent and government forecasts predict the budget deficit could reach four times the level that is legally allowed by the European Union.
For almost 20 years, economists have been praising the Irish republic as the economic model to follow, but the days of major foreign investments have ended and the purring of the Celtic Tiger has given way to an uneasy silence.
Lenihan admitted the emergency budget would not be easy on anyone, but vowed in advance that it would be fair. It certainly was wide ranging.
His budget doubled the current income and health levies at the various income levels they apply to, did away with the end of year social welfare bonus and reduced mortgage interest relief. Overall, the hardest hitting revenue raising measures were aimed at those with the highest incomes.
Lenihan told the D