The Irish government yesterday unveiled a raft of Budget measures to restore the State’s finances by 2014.

Measures include cutting social welfare by €3 billion, reducing the public sector pay bill by €1.2 billion and increasing VAT by two per cent.

The four-year plan warned that the drastic cuts will negatively impact on the living standards of the people of Ireland.

The Budget roadmap includes the following savings and tax reforms: The minimum wage is cut by €1 to €7.65 euro; VAT will increase by one per cent to 22 per cent in 2013 and to 23 per cent in 2014; Corporation tax will remain at 12.5 per cent; Public sector workforce to be cut by 24,750, bringing levels back to 2005 levels; Student fees will increase; Water metering will be brought in by 2014; Carbon tax charges will double to €30 a tonne, raising €330 million.

The National Recovery Plan stated: “The Plan will help dispel uncertainty and reinforce the confidence of consumers, businesses and of the international community.

“The tax and expenditure measures contained in this Plan will negatively affect the living standards of citizens in the short term.

“But postponing these measures will lead to greater burdens in the future for those who can least bear them, and will jeopardise our prospects of returning to sustainable growth and full employment.”