More Pain Than Gain, As Smokers Hit Hard

The 2009 Budget has seen an expected increase in taxation on cigarettes.

However, while Finance Minister Lenihan was widely expected to hit tobacco products hardest, his Budget speech stopped short of savaging the cost of a smoke.

He told the Dail that Excise on cigarettes would rise by a just 50 cents per packet of 20.

The tax on a standard bottle of wine will also go up by 50 cent, with pro-rata increases on other wine products and an increase of eight cents on a litre of petrol.

There will be no excise increase on beer, cider, spirits or on diesel.

The Minister also announced a levy of 1% on all income below €100,000, and of 2% on income over that.

"We realise the solidarity of demands of all tax payers, but there is too much at stake - we all have too much to lose by not taking action now," the Minister said.

"This levy will allow all income earners to contribute in a proportionate manner to the restoration of order and stability for the public finances.

"This will enable Ireland to return as soon as possible to a natural level of economic growth."

However, the Minister also said the Government was committed to protecting the most vulnerable in society with an increase in pensions.

"I am happy to announce the full personal rate of the state pension will be increased by €7 per week for all pensioners," he said.

"This will bring the state contributory pension to €230.30, and the state non-contributory pension to €219 per week."

Conversely, Minister Lenihan announced cuts in child benefit payments.

"Child benefit payment will cease for 18-year-olds from January 2010, and will be halved for that group to €83 per month from the first of January next," the Minister confirmed.

"However, welfare recipients, including those on family income supplement will be compensated through appropriate adjustments to their support payments.

He added: "Early childcare supplements will cease at five and a half years of age."

(DW)