DUBLIN (AP) — Ireland announced Tuesday it will inject a further 1.5 billion euros ($1.7 billion) in tax cuts and spending hikes into its already fast-growing economy as the country accelerates its rebound from an international bailout and banking crisis.
Finance Minister Michael Noonan detailed a 2016 budget packed with measures designed to raise job growth, net incomes and welfare benefits. He forecast that Ireland in 2016 would achieve a Europe-leading rate of growth for the third straight year, a reduction in national debt back below the eurozone average, and a further pruning of unemployment from the current 9.4 percent to 8 percent.
This is the last budget before Ireland's 4 ½-year-old government seeks re-election in an expected March vote. Prime Minister Enda Kenny hopes to campaign on a platform of sound economic stewardship following Ireland's descent to the brink of bankruptcy under the previous government. Following seven austerity budgets, Ireland since last year has resumed expansionary spending, its economy underpinned by about 1,000 high-tech exporters focused on software, pharmaceuticals and IT services.
"Our economy has been transformed. It is growing strongly across all sectors and, most importantly, is sustaining and creating jobs. The economy has recovered all of the output lost during the crisis and is bigger than ever before in our history," Noonan told lawmakers, Kenny and other Cabinet ministers.
Ireland required in 2010 a package of rescue loans from European Union partners and the International Monetary Fund when the cost of saving Irish banks overwhelmed the country's own finances. But since exiting bailout support in late 2013, Ireland has regained its status as the fastest-growing economy in the 28-nation EU.
Noonan said he expected Ireland's economy to grow 6.2 percent this year, nearly double the estimates from earlier this year, and a further 4.3 percent in 2016.
The minister for expenditure and reform, Brendan Howlin, told lawmakers about a string of increases in welfare payments, clawing back some ground lost during five years of cuts. He also raised Ireland's minimum wage nearly 6 percent to 9.15 euros ($10.45) per hour.
Noonan announced only one immediate tax hike: another 50-cent increase to a pack of cigarettes, raising their average cost to 10.50 euros ($11.95), highest in Europe.
Noonan's department acknowledged another major social change: May's national vote to legalize gay marriage in a country that taxes married couples proportionately less.
When listing examples of how typical households would gain net income from the budget changes, the Finance Department tweeted an example of a married couple with no children, two jobs and combined gross income of 95,000 euros. It said the hypothetical couple, Claire and Michelle, would be 1,678 euros ($ 1,910) better off next year.
Text of Noonan speech, http://bit.ly/1k1PE0Q
Finance Department household examples, http://bit.ly/1WZOcKE