Budget 2012 – €3.8 Billion of Savings

A few days later than expected – as mentioned in our Budget 2012 Timetable  – the Finance Minister yesterday  unveiled the government’s  medium-term fiscal statement setting out the headline adjustments that will be made between 2012 and 2015.
The 2012  Budget will now  include €3.8 Billion of savings – with  €2.2 billion in spending cuts and €1.6 billion in additional taxation.  This is fairly close to the €3.6 billion figure that was expected.

The Irish public will not be impressed that these figures were released  in the same week that the Dept. of Finance found out that the national debt was in fact €3.6 Billion lower than they thought – because of accounting errors !

Mr Noonan  said there will be no changes to income tax rates, income tax bands or income tax credits in 2012 .

As previously announced  in November 2010 the top rate of VAT is  due to increase from 21% to 22 % – but it will now happen earlier than originally planned . The €100  property charge  or household charge was also confirmed again. The Carbon Tax  increase  was confirmed too. (Details on Budget Day)

Socail Welfare cuts were not mentioned – but it is very likely there will be reductions in the welfare budget in 2012  as they were mentioned in the four year recovery plan. (€0.6billion of savings were mentioned for 2012)

All of these changes were announced back in November 2010 as part of the Four Year Recovery Plan agreed with the IMF and EU . So they should come as no surprise to people in Ireland.

In 2012 – the day-to-day spending  by the government is also to be cut by €1.45 billion.  About  €750 million of the cuts will come from the capital investment budget.

The full details will be revealed on December  7th  – Budget Day