Minister for Finance Brian Lenihan's widely feared 2010 budget has slashed welfare and increased taxes, prompting heckles within the Dáil that the measures were "an attack on the poor".

It is estimated that some low to middle income families could face a reduction of up to €3,000 per year under the budget proposals, due to slashed child benefits, tax increases, increased fuel duty and pension cuts.

However, in a packed and roudy chamber yesterday, Mr Lenihan (pictured) said there were "clear signs of hope" at the time of crisis as he slashed €4 billion from Government spending and raised the tax burden by €2 billion.

The previously suggested minimum wage cut of 12%, which is understood to have been the result of a demand by the International Monetary Fund, was finalised along with reductions to child benefit by €10 per week for one child and €20 for additional children.

Brian Lenihan told the Dáil the economy was returning to growth after a deep and prolonged recession, but that the gap between Government income and expenditure must be closed.

"Today's Budget is our first step in ensuring that we can get back firmly on our own feet,” the Finance Minister told the Dáil under a salvo of abuse and disagreement.

Other measures include an increase in excise duty on petrol by 4 cent per litre and a 2 cent increase in diesel; The €10 travel tax was cut to €3 in an attempt to entice tourists; A cap on incoming top earners in the public service to €250,000 and a €500 rise in college fees to €2,000 a year for the first child.

Responding to the budget this morning, Labour Spokesperson on Finance Joan Burton described the budget as "the last sting of the dying Fianna Fáil wasp", but a "vicious sting and one that carries a long tail life".

"At the end of this set of Fianna Fail budgets, and as a direct result of this government's policies, the gap between rich and poor will have widened. Ireland will be a more divided society than ever. It is the disadvantaged who will carry the bulk of the cost and those whose reckless antics caused the disaster will survive best of all. Yes their wealth will be diminished but they will have escaped, waiting for the chance to strike again."

Meanwhile, Fine Gael said the budget "flunked" job-creation, hit the most vulnerable and put more pressure on lower and middle income earners.

Fine Gael Finance Spokesman Michael Noonan said: "This Budget is the budget of a puppet Government, who are doing what they have been told to do by the IMF, the EU Commission and the European Central Bank, so that the State can draw down the bail-out funds now that the country is insolvent."

Despite the harsh measures and apparent opposition to the budget, it's understood the Mr Lenihan's budget will be passed in the Dáil.

(DW/BMcC)