The Republic of Ireland was forced to ask for an EU/IMF bailout for €85 billion towards the end of 2010 as a result of spiralling costs for borrowing on the international money markets. The nation’s credit worthiness had been called into grave doubt following the bursting of a property bubble which left the financial sector dangerously exposed and in need of governmental support to ensure the viability of some banks. The nation ended its bailout loan in 2013 and has become the fastest growing economy within the Eurozone.
The Irish will be going to the polls in the spring, so the recent budget by finance minister Michael Noonan, will be the final one of this parliament. He used it to announce a modest tax giveaway worth about €1.5 billion in tax cuts and promise that employment would continue to improve. "Our people are in a much stronger and certain position than 2011. We are on track to recover all of the jobs lost and have more people working by the end of this decade than ever before." He noted that about 1100 new jobs are being created each week.
Taxes cut included the Universal Social Charge, more commonly known as the “bailout tax” which sees its threshold rise to €13000, personal taxation is also being eased which should mean that a family with two children and one wage earner will an additional €57 per month. Capital gains tax has been reduced and the threshold for inheritance tax has been raised.
Ireland is continuing with its policy of being a nation offering low corporate taxation levels – to the chagrin of other EU partners. A “knowledge box” tax applied to corporate profits on patents and software is to be set at 6.25% - a comparable levy in the UK attracts a taxation rate of 10%. Plans were also announced for construction of 20000 new houses which are slated for construction by 2021. It is hoped that this will deal with an acute housing shortage in Dublin which has been blamed for high private sector rents in the Irish capital.
Other measures recently announced will increase the minimum wage by €0.5 an hour to €9.15; the under 12s will receive free GP services and the Irish health service will receive an investment of €14.2 billion; child benefit is to rise to €140 per month; €3 million will be found for after school services; pensions will increase by€12 per month; social housing funding will rise to €414 million helping to provide support to an additional 14000 households; and funding will be found to expand the police force by 600 new officers.