Ireland's austerity budget: Brian Lenihan plays 'Santa'

By Mark Simpson
BBC News, Dublin

image captionBrian Lenihan announced that ministers would also be taking a pay cut

A lesson in how best to deliver bad news was given by the Irish Finance Minister, Brian Lenihan, as he announced a long list of pre-Christmas cutbacks.

It was billed by one evening newspaper as the "bloodbath budget", but by racing through his budget speech at high speed, fast-talking Mr Lenihan made it sound less painful.

He seemed to slow down when it came to the positive news - no change to the state old-age pension, and a reduction in the air-travel tax, which will lead to cheaper flights.

During these parts of the December budget speech, Mr Lenihan tried to sound more like Santa than Scrooge.

However, no amount of fast talking could completely hide the bad news. The reduction in welfare payments captured the headlines, especially the cuts in child benefit and the disability allowance.

In addition, there was a 12% reduction in the minimum wage and a widening of the income tax net to take in thousands of low-paid workers.

Mr Lenihan announced he and other ministers would be taking a pay cut, amounting to almost 12,000 euros (£10,000). It was, he said, in the national interest.

He tried to cheer up the nation by saying: "There is every reason to be confident about the future of this economy, and this country, if only we have confidence and belief and faith in ourselves."

Frosty mood

There is no guarantee that the budget will be passed by the Irish parliament. The government has only a two-seat majority.

However, having just agreed a huge international bail-out - and having heard that European Union finance ministers had also approved it - most Irish politicians seem to recognise the need to save money.

With the rest of Europe watching closely, it would be a surprise if the budget was rejected.

One figure which was not mentioned during the budget speech was -9 - the level to which the Celsius temperature plunged on Monday night in Ireland.

The heavy snow across the country meant the post-budget demonstration outside the Irish parliament was not as large as expected. The turnout was only a fraction of the 50,000-strong crowd that brought Dublin to a standstill 10 days ago with a mass protest.

The big chill has made the Irish public mood frosty.

A letter to Tuesday's Irish Times newspaper complained: "It appears that not only have we contracted Iceland's financial problems, we now have its weather as well."

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