Ireland's 'Final Austerity Budget' Unveiled
Ireland has published its "final austerity budget" - a plan to slash 2.5bn euros (£2.1bn) from next year's deficit - in preparation for its exit from the international bailout programme.
Finance Minister Michael Noonan said the government had decided to reduce austerity measures and quoted WB Yeats, saying "too long a sacrifice can make a stone of the heart".
He announced "25 pro-business and pro-jobs measures" worth half a billion euros, the most significant being a decision to extend the 9% VAT rate for the hospitality industry into 2014.
The scrapping of tax on air travel will go down well, alongside the introduction of a home improvement scheme and other measures to stimulate investment in the financial services industry.
Less popular measures include another 10% duty on a packet of cigarettes, an extra 10% on a pint and spirits, and 50% on a bottle of wine.
In addition to the raid on the old reliables, Mr Noonan outlined a wide range of tax hikes on bank deposits, state pensions and many other goods and services.
He said the largely state-owned banks would be required to pay new levies totalling 200m†euros (£169m) in 2014, but left the 23% sales tax and fuel duty unchanged.
Some workers have seen their take-home pay cut by 20% by income tax hikes but the minister left rates unchanged this time.
Ireland has been increasing taxes and reducing spending since 2008 when the so-called "Celtic Tiger" boom fuelled by cheap eurozone credit came to an abrupt end, almost crippling the economy.
The minister is confident Ireland can resume normal borrowing on bond markets at affordable rates by December because the treasury has "stockpiled cash" to pay the bills in 2014.
The move comes three years after Ireland was forced by the crippling cost of bank rescues to seek emergency loans from the European Union and International Monetary Fund.