Bruton condemns '51% tax rate' for average earners

A SINGLE person on the average industrial wage in Ireland will pay tax at 51 per cent from tomorrow, says Fine Gael finance spokesman Richard Bruton, in reference to the impact of the Budget taxes and levies.

In sharp criticism of Government policy he said the “economic decline forecast for Ireland is twice as bad as in any of our competitor countries and the rise in unemployment is also twice as bad as any of our competitor countries”.

He said in the Dáil that it was “a damning indictment of policy in this country, showing policy failure by policy makers, by regulators and by the property sector”.

Rejecting the criticism, Taoiseach Brian Cowen accused Fine Gael of trying to offer some “painless way forward” which was “dishonest”.

The party offered “the prospect of addressing a redesign of the tax system without increasing income tax, which has no credibility whatsoever”.

He insisted that “as a prerequisite to economic recovery, we must get our public finances in order”.

During Leaders’ Questions, Mr Bruton said Ireland’s current economic position internationally “underlines once again that the vast majority of the difficulties faced in this country are the result of the policies which you Taoiseach as minister for finance presided over”.

Referring to the single worker on an average industrial wage paying tax at 51 per cent, he asked “how can the Government think this is a strategy for recovery”.

The unemployment figures for the first four months of the year had risen by 94,000 “on top of an increase of 120,000 in 2008”, he said.

“Behind those statistics dwell some grim facts – business people seeing their lives’ work destroyed as they have had to close their doors and families terrified that their jobs will be the next to go as the ESRI tells us that another 300,000 are to be added to the total.”

He said that would put unemployment levels above 600,000 and these were “appalling figures”.Every country had a strategy based on protecting jobs and defending employment, said Mr Bruton.

“Where is the Government’s strategy?” What the Budget offered was “a blinkered view of the world”.

The Taoiseach and Government were “smarting from criticism” by their backbenches that they were paralysed and out of touch, that they were unaware of what businesses needed, not responding to that need and “that a cosy circle is dictating policy”.

“This is nothing to the fury the Government will encounter from ordinary people who are seeing their life prospects and those of their children going up in smoke,” he warned.

Mr Cowen said Fine Gael was offering to redesign the tax system without increasing taxes “which has no credibility whatsoever”.

The Government had a jobs strategy and the first requirement was to get the public finances in order.

“Second we have increased the number of placement schemes available for people who are out of work. Third, we are trying to ensure reduction in costs.

“We are already seeing such reductions, as well as improvements in competitiveness in terms of a reduction in wage costs.”

Hitting out at Fine Gael, Mr Cowen said the party was suggesting “there is a way of moving on without the necessity to provide for an increase in taxation”, and it was “simply dishonest”.