JUNIOR CYCLE BUSINESS STUDIES The government had to find money in the budget to make repayments to the EU
and the IMF. It aimed to make a saving of €15 billion, which would be made up of €10 billion in spending reductions and €5 billion in tax increases.
This was an ambitious plan. It required everyone living and working in Ireland to contribute to the country’s economic recovery.
COSTS OF THE NATIONAL RECOVERY PLAN
Government economic policy affects individuals and businesses. The expenditure and taxation measures set out in the National Recovery Plan affected a wide range of people.
• Public service staff had their pay and pensions reduced and a number of public sector jobs were lost.
• People receiving social welfare, such as Jobseeker’s Allowance and State Pension, experienced a loss of income due to welfare expenditure cuts.
• Low-paid employees were affected by a €1 reduction in the minimum wage (although this was later reinstated).
• Students had to pay more towards third-level education.
• Employees’ net pay was reduced due to increases in income tax (the Universal Social Charge (USC) was implemented).
• Consumers had to pay more VAT, which was increased from 21% to 23%. • Householders had a new utility bill due to the introduction of water charges.
