The Minister for Finance has said today's Budget was tough, but the Government had to make judgements in order to raise €3.8 billion.
Speaking on RTÉ's 6.1 News, Michael Noonan said the Government tried as far as possible to impose the burden on those who could shoulder it the most.
Earlier, the Minister outlined his Budget measures to the Dáil. They include changes to the universal social charge to help the low-paid and extra mortgage interest relief for those who bought at the peak of the housing boom.
The top rate of VAT is to increase by two percentage points to 23% from January 1, while capital taxes and DIRT will rise to 30%.
Mr Noonan also confirmed that there would be no increase in income tax in the budget.
There will be a 25 cent increase in the excise duty on 20 cigarettes, but there will be no change in relation to alcohol.
Carbon tax also goes up - petrol and diesel by 1.5 cent per litre from midnight - though home heating fuels will not increase until May, and solid fuels are excluded altogether.
As already announced, there will be a household charge of €100 per dwelling, and as expected there are increases in motor tax.
The point at which people start paying the universal social charge has been increased from €4,000 to €10,000 a year, which the Minister said would benefit 330,000 people.
The Department of Finance has published tables showing the impact of tax changes of different categories of people.
To try to increase activity in the property market, stamp duty for commercial property transfers will be reduced from a top rate of 6% to a flat rate of 2%.
There is also help for those who bought homes at the height of the property boom - mortgage interest relief for first-time buyers who bought between 2004 and 2008 will go up to 30%.
The Minister also admitted that it would not be possible to abolish upward only rent reviews - instead he is relying on NAMA to approve rent reductions where justified on its properties.
Growth forecast for next year lowered
Mr Noonan told RTÉ the household charge, in its flat rate form, was just an introductory payment and would have a more progressive base as the Government proceeded.
He also said there had been a lot of misunderstanding about the VAT increase. He said food, oral medicines, books and children's clothes were all zero-rated. and a whole range of goods produced in Ireland were 13.5% or 9%.
Mr Noonan said the universal social charge was unfair when it was brought in last year at too low a level, and disincentivised work.
His Budget announcement follows yesterday's publication of plans to cut Government spending by €1.45 billion next year.
Minister Noonan said a gradual recovery had begun to take hold, adding that the Department of Finance was forecasting an increase of 1.3% in the volume of GDP next year. This is lower than the 1.6% forecast in the mid-term economic review last month.
Mr Noonan said the general government deficit target for 2012 was 8.6% of GDP, adding that this year's figure of 10.1% would be less than the 10.6% targeted under the EU/IMF programme.
Budget documents show that the Government is targeting an increase of 4.8% in the tax take for 2012, and a reduction of 2.25% in current spending. The Exchequer deficit for 2012 is expected to be €18.9 billion, higher than expected, mainly due to €1.3 billion now needed to recapitalise Irish Life & Permanent after the sale of Irish Life fell through.
Property slump having "psychological" impact
Finance Minister Michael Noonan told a press conference tonight that the Government was doing "small, targeted things" to increase employment and boost growth.
The minister said they may not all work, but the Government could not tax its way out of the current problems.
Mr Noonan said problems in the property sector were having a huge psychological impact in Ireland, and some of today's moves were aimed at encouraging people to spend and invest.
Explaining the turnaround in attitude towards upward-only rent reviews, Minister Noonan said that overseas investors had told him that Ireland lacked certainty.
