Taoiseach Brian Cowen has confirmed tax increases will form part of Government’s four-year budgetary plan.
Mr Cowen said the Coalition would adopt three strategies in its attempt to address the €18.5 billion deficit – the gap between public spending and tax revenue.
“There’s a gap between what we spend and what’s coming in of €18.5 billion,” he said.
“We have to come forward with a four-year framework that would see how we would reduce that considerably through growth in the economy, where we can identify it and have it implemented, tax increases and also expenditure cuts. They’re the three ways in which you deal with that gap,” he said.
Asked if more people would be brought into the tax net in December, Mr Cowen said the State needed “more buoyant revenues coming into the economy and into the exchequer”.
Mr Cowen would not be drawn on speculation about a possible cut to child benefit for higher earners. “It really is idle for me to speculate in respect of any of those areas until cabinet considers the situation and then comes to its decisions,” he said.
The Taoiseach was speaking at the Irish Medical and Surgical Trade Association (IMSTA) showcase in Dublin city centre this afternoon.
Yesterday, business lobby group Ibec called for the Government to limit tax increases in the upcoming budget to €600 million and to focus on cuts from current expenditure as outlined in the McCarthy report.
In its pre-budget submission, Ibec claimed increasing the marginal rate of tax would make Ireland less competitive and says the tax base should be widened by a reduction in tax credits.
