Minister for Finance Brian Lenihan has outlined six steps to restore the Irish economy in his supplementary Budget.
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These steps cover the restoration of the public finances, banking, competitiveness, the protection of jobs, and the restoration of confidence and our reputation abroad.
For the second time in just six months, Brian Lenihan entered the Dáil chamber to announce a Budget.
This one was widely predicted to be the most severe in decades.
The Minister said that the economy could be fixed if the country took the right course of action and if everybody signed up for it.
Stressing that the measures were dictated by the economic turmoil globally he said he wanted to assure the Irish people that the Government had ‘the will to bring us out of this period of severe economic distress’.
Today's measures will increase revenue by €1.8bn, while spending will be cut by €1.5bn - but next year and in 2011, the Minister said the balance will be on cuts rather than tax.
On Taxation, the minister revealed that the 12.5% rate of corporation tax would be retained.
The rates of the Income Levy will be doubled and the entry points for each rate will be reduced. The new rates will be 2%, 4% and 6%.
The new entry points will be €15,028, €75,036 and €174,980 per annum with the weekly equivalents being €289, €1,443 and €3,365 respectively.
Mortgage interest relief will now only be available for the first seven years on principal private residences.
While the 12.5% corporation tax rate will remain other tax reliefs will be abolished or curtailed.
Health Levy rates will double to 4% and 5%. The entry point for the higher rate will be reduced to €1,443 per week which is €75,036 per annum.
Mr Lenihan said the PRSI ceiling will be raised to €1,443 per week or €75,036 per annum.
The new taxation measures will take effect from 1 May.
The level of tax relief investors can claim on the interest for mortgages and loans on residential rental properties will be reduced to 75% of the interest with immediate effect.
The current 20% special rate applied to trading profits from residential development land will be abolished.
Property related accelerated capital allowance schemes in the Health Sector will end.
Mr Lenihan admitted it was no longer sustainable to keep minimum wage earners outside of the tax system.
From midnight tonight excise duty on cigarettes will go up by 25c per pack of 20.
Excise on auto-diesel will go up by 5c per litre. These changes are VAT inclusive.
Minister Lenihan said there was no scope to increase the excise duties on alcohol or petrol because of a substantial risk that a lot of revenue would be lost by people buying these items in Northern Ireland.
On the issue of social welfare, it was revealed that the Early Childcare Supplement cost the State €480m last year.
This programme is to be replaced by a free Early Childcare and Education year for pre-school children at an estimated cost of €170m. It will start next January.
The existing early childcare supplement is to be halved with effect from the 1 May and will be abolished by the end of 2009.
The child benefit payment (children's allowance) will be means tested or taxed in the Budget for next year.
Jobseekers' allowance for the under-20s will be halved to €100 per week so as to incentivise the young unemployed to participate in training programmes.
Payments under the rent supplement scheme will be reduced to reflect the fall in prices in the rental market.
Cuts in the Education budget, amounting to €81m, include cuts to the capital expenditure programme, and Higher Education.
Capital expenditure in education is to be cut by €54m. That includes a reduction of 30 million in the School Building Programme. The minister says all projects already announced will go to tender.
Announcements in relation to further building projects will be made at a later stage.
The higher education budget is down by €24m.
€2m will be saved through delays in recruiting additional educational psychologists as well as what are described as administrative savings within the National Educational Psychological Service.
The Department says a saving of another €2m will come from the Residential Institutions Redress Board through a lower level of awards and administrative economies.
Savings of €5m are expected from the already announced moratorium on promotions in schools.
The school transport budget is to be cut by €2m and the same figure is to be cut from research budgets.
The Strategic Innovation Fund will also have its budget cut by €2m
The overall reduction to the education budget since October's budget is €134m. This includes the €81m announced today.
The budget of the Department of Transport is to be cut by €300m this year, a 1% reduction.
A spokeswoman said €2bn would continue to be spent on roads in 2009, as well almost €1bn on public transport.
Projects such as Dublin's Metro and rail Interconnector continue to go through the statutory process.
In the case of the Metro, it is unlikely the proposal and recommended bidder will before Cabinet for a decision before December.
Moving to the credit system, Minister Lenihan announced changes to the role and structure of the Central Bank of Ireland.
He said the role of the Central Bank of Ireland will be reformed to place it at the centre of financial supervision and financial stability.
The Central Bank of Ireland will in the future be headed by a Commission, chaired by the Governor.
A national asset management agency is to be set-up under the aegis of the National Treasury Management Agency. Assets will be transferred from the banks to the new agency to ensure the banks have 'a clean bill of health'.
The agency will have a commercial mandate and will have the central objective of maximising over time the income and capital value of the assets entrusted to it.
The minister also announced several changes to the remuneration of TDs and Senators following the decision to cut the number of junior ministers from 20 to 15.
No longer will deputies receive long service payments or increments, while there will be a 10% reduction in all expenses other than mileage rates where a 25% reduction has already taken place.
The arrangement where former ministers who were paid ministerial pensions while they are still members of the Oirechtas will not continue. The allowances paid to Oireachtas committee chairman will be halved and the payments to whips and vice-chairs will also go.
In the department of Communications, Energy & Natural Resources, savings will include a €5m reduction in the allocation for RTÉ, An Post and the Broadcasting Fund, reflecting lower receipts from the broadcasting licence fee, and general reductions on other programmes.
Mr Lenihan said the Government was determined to maintain high levels of public investment but spending could not be maintained at the levels envisaged when the economy was in rapid expansion.
He said projects that maximise economic and social returns must be progressed.
He said the Exchequer capital allocation is to be set at €7.3 bn for 2009, which is greater than 5% of projected GNP.
The overall Exchequer capital allocation for public investment for the next four years is to be fixed at €6.6bn for 2010 and €5.5bn for 2011.