Budget: main spending plans

The government’s spending plans for next year include increasing the tax and premium burden by €7bn and increasing VAT to 20%.

■ Budget surplus to reach 0.5% in 2008, rising to 1% by 2011.
■ Economy to grow 2.5% next year.
■ National debt to reach 37.5% of GDP next year, down from this year’s 39.1%.
■ Inflation to reach 2% in 2008.
■ Total package of tax and premium increases to generate €7bn for new policies.
■ Basic tax rate to be cut by 0.5% to 33.15%. Second band to rise slightly to 41.45%.
■ Unemployment benefit premiums cut for workers, increased for employers.
■ VAT (btw) to rise from 19% to 20% in 2009.
■ Extra tax break for the over-63s who stay at work. Richer pensioners to pay more tax.
■ Tax on environment-unfriendly company cars to go up from 22% to 25% of catalogue value.
■ Home-owners with property worth over €1m to pay more tax. No change on mortgage tax relief.
■ €350m for public transport over four years.
■ Refugee amnesty to cost €360m. €80m for ‘integration’.
■ Subsidies for solar panels and boilers.
■ Extra tax on air travel.
■ Partial introduction of free text books in secondary schools, and free museum visits for under-12s.
■ Cigarettes up 25 cents a packet, a beer will cost 2.7 cents more.
■ Introduction of own-risk element in healthcare insurance.
■ €335m cut from the budget for hospitals and specialists but
€60m to boost staffing.

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