Irish budget contains measures to deal with Brexit fallout
The Irish government has announced a cautious budget after the Brexit vote, with 1.3bn euros (£1.2bn) allocated for tax cuts and public spending increases.
Finance Minister Michael Noonan said given the uncertainty, it was important to continue policies for economic growth, job creation and debt control.
The low VAT rate for the hospitality industry would continue, as would the 12.5% corporation tax, he said.
Ireland's economic growth forecast for next year has been cut to 3.5%.
However, Mr Noonan said that despite the downgrade, the Irish economy was in good shape, growing strongly and should continue to grow over the coming years.
The finance minister told the Dáil, the Irish parliament, that the only tax increase was 50 cents on cigarettes, taking the price of a packet of 20 to 11 euros (£10).
He said the government was introducing "economic shock absorbers" and announced plans to establish a "rainy day fund" of up to a billion euros per year when the Irish budget goes into surplus in 2018.
"Whatever the final settlement, what we know with certainty is that Brexit has increased risk to the Irish economy and, as well as introducing specific measures to assist particular sectors of the economy, we must also put in place safety nets to protect us against future economic shocks," he said.
Minister for Public Expenditure Paschal Donohoe told the parliament he was proposing 4,500 new front-line service jobs including Gardaí (Irish police), nurses and teachers.
He also told the Dáil that from March 2017, those getting old age pensions and weekly social welfare would get five euros (£4.50) a week increase.
This was the first budget since the formation of the new Fine Gael-led government which includes independents as ministers and is reliant on the support of Fianna Fáil, the main opposition party, for its survival.
Fianna Fáil's finance spokesman Michael McGrath said his party did not get everything it wanted in the budget but that it was much fairer because of his party's input.
"While we didn't write this budget - from the outside - we influenced it as best we could in the direction of a fairer and more decent Ireland - and we make no apologies for that," he said.
He described government proposals to increase the budgets for government departments and state agencies to deal with Brexit as "pathetic".