THE Government parties have put forward a common platform on tax reductions, agreeing that rate cuts will come later in the next parliament. They also accused Fianna Fail and the Progressive Democrats of doing a "cartwheel" on their own policies.
The Government parties have won the argument on taxation, the Minister for Science and Technology, Mr Pat Rabbitte claimed.
There is now agreement that the way forward for the tax system is, through widening the bands and increasing the allowances, according to the Rainbow partners.
However, the Minister for Finance, Mr Quinn, admitted that reductions in the top rate of tax, as proposed by Fine Gael, would have to follow the other measures.
Speaking at the launch of the Government parties' income tax policy yesterday, Mr Rabbitte said the opposition parties "obsession and concentration" on rates has been shown to be lacking.
"Watching Mr Michael McDowell shedding crocodile tears is enough to make a cat laugh," Mr Richard Bruton, Minister for Enterprise and Employment quipped.
Fianna Fail and the PDs have done a cartwheel on their tax reform admitting that focusing on the bands and allowances is the way forward, the partners insisted.
The three Government parties insisted that they have a "long term perspective" on the management of the economy.
"We now have, well in advance, an agreed framework for substantial tax reform and reductions over a five year timeframe. Others can not even agree on the lowest common denominator, never mind a five year agreed income tax package."
Mr Bruton added that for the first time the Government parties seeking reelection have a "solemn agreement" on tax policy which "is the basis of our future prosperity and social cohesion as we brace ourselves to cross the threshold of the new millennium."
The promised reductions are based on assumptions that the economy will continue to grow at five per cent a year. The Government partners are also committed to cutting the debt and to balanced budgeting.
"There are serious dangers in policies of financial profligacy inherent or implied in pursuing policies other than those set out by the Government parties," Mr Bruton" warned, adding that there is a need to be prudent and keep on a steady course ahead of monetary union.
The parties have agreed a broad taxation framework, although some detail has yet to be decided.
The basic agreement, according to Mr Quinn, is that at cast 60 per cent of resources will be used for increasing personal allowances. Around 20 per cent will be used to widen the standard rate band, with the remaining 20 per cent used for increasing exemption limits and adjusting PRSI and levies.
However, there is no agreement yet on the most likely way forward on child benefit. Mr Bruton insisted that all parties were going in the same direction, but there is no decision yet on whether Fine Gael's proposal for £300 for the under fives would win or the Labour and DL proposals for increasing child benefit.
The Government is also expecting to create 40,000 jobs a year over the next five years.
The three parties have also pledged to reduce corporation tax to a single rate of 12.5 per cent on all profits. At the same time, it has said it will implement new anti abuse measures and claw back windfall gains.