POLITICAL REACTION:ANNOUNCING THE details of the Finance Bill to give effect to last month's emergency budget, Minister for Finance Brian Lenihan said it was designed to protect existing jobs and create confidence that will lead to further employment.

He said the Bill struck the difficult balance between the need to show a credible way forward to deal with the State’s structural problems and the need to protect the economy.

“In this context, it is my view and that of the Government that a borrowing target of 10.75 per cent of GDP strikes the correct balance,” Mr Lenihan said.

He added that the majority of the bulk of the budgetary adjustments were on the expenditure side. “The reality is that the expenditure reductions adopted since last July will amount to at least €4.3 billion in 2009. The taxation increases in October’s budget and the Supplementary Budget were introduced to raise approximately €3.8 billion.”

The Minister reiterated that the Government’s approach must be rooted in a determination to put the economy on the road to renewal. “The choices we make now will not only determine our immediate economic future but also our long-term economic future,” he said.

Mr Lenihan stressed that economic and fiscal renewal must not be achieved at the expense of fairness. It was essential that everyone give according to their means.

Fine Gael deputy leader and Finance spokesman Richard Bruton said the Bill demonstrated that the Government was stubbornly persisting with a narrow agenda by piling taxes on ordinary families.

“This Bill was an opportunity for the Fianna Fáil Government to show some political leadership by leading reform in the public service and cutting the cost of running government. Instead they took the easy option of raiding Irish families,” he said.

Mr Bruton said the ESRI warning that 300,000 people would lose their jobs before the end of next year had not spurred Fianna Fáil to introduce any initiative to address the jobs crisis.

Labour Party deputy leader and Finance spokeswoman Joan Burton said the Finance Bill confirmed that marginal income tax rates would soar to levels not seen since the early- to mid-1990s.

“Families on incomes of between €40,000 and €90,000 will take the hardest hit. Families with very young children also face the loss of the early childcare subsidy,” she said.