Austerity Measures

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ASSIGNMENT

Assignment Title: “Main features of the austerity measures”

Student: Lubica Gabrisova

Student Number: C00163492

Programme: Bachelor of Arts (Hons) Accounting

Programme Code: CW_BRLAC_B Y1

Module: Economics

Submission Date: 15th March 2012

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Irish economy

Ireland is a small country and the crisis in the Eurozone has a strong effect on its economy. Government has to find a better system how to recover from this tough situation by changing regulations to ensure that the economic growth is built on solid foundations this time.

Budget 2008

In the Budget for the year of 2008, Minister for Finance Mr. Brian Cowen announced new spending and taxation measures that would focus on better management of Government spending by making spending and revenue decisions in a more transparent manner.

The rate of increase on public current expenditure in 2008 was over €1.7 billion as €53 billion was provided for public expenditures. This included around €960 million for welfare and child care payments to support people with low income and over €8.6 billion in 2008 for investment on the capital side. (Department of Finance. Budget 2008)

Motor tax rates and fees for trade licence plates increased by 9.5% for cars below 2.5 litres and 11% for larger cars (this should bring a yield of €83 m). The Excise Duty on cigarettes increased by 30 cents per packet, Licensing fees for Off-licences increased from €250 per licence to €300.

Budget 2009

The economic collapse in 2007/2008 was caused by rapid growth of the property bubble in Ireland over the last decade. The economic confidence was dazed, the Government decided to a permanent reduction in the cost of the public payroll plan-deduction of 7.5% from the salaries of...