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Ireland suffers savage budget cuts to stay afloat

Less pay for everyone, from the prime minister to the cop on the beat.

The body representing the country’s police force is planning to ballot members on strike action. They have been warned by Justice Minister Dermot Ahern not to do so as it is illegal in Ireland for the police to take strike action. But who would arrest the cops?

The lowest paid members of the public are facing reductions in child benefit allowance, unemployment allowances and in social services, leading opposition finance spokesman Richard Bruton to charge that the poorest are being made to pay for the bungling of the country’s finances by bankers and developers, with the connivance of the governing party, Fianna Fail.

There is some good news in the budget figures. The cost of living in a country sometimes described as “rip-off Ireland” has fallen by over 6 percent this year. And the price of alcoholic drink is to come down with a reduction in excise duty of around 14 percent.

Cheap drink is one of the reasons consumers in the Republic have been driving across the border in big numbers into Northern Ireland to do their shopping.

During a one-day stoppage by public service employees two weeks ago, there was a five mile tailback at the border as striking workers lined up bumper to bumper to do their pre-Christmas shopping in Newry in Northern Ireland.

The phenomenon of shopping in the neighboring jurisdiction has been so beneficial to the Northern Ireland economy that it officially came out of recession this month.

The good times may be over for cross-border shoppers. The value-added tax rate on goods sold in Northern Ireland will rise by 2.5 percent under the United Kingdom budget, also announced on Wednesday, and will fall by half a percent on goods in the Republic.

In a nod to the Copenhagen conference on global warming, Lenihan announced a carbon tax of €50 ($74) per tonne on petrol, diesel, home heating fuel and natural gas.