Finance spokesman says party sees no reason for increasing taxes

Taxation: Fine Gael will not increase personal, corporation or capital taxes if it wins the next general election, the party…

Taxation:Fine Gael will not increase personal, corporation or capital taxes if it wins the next general election, the party's leader, Enda Kenny, and deputy leader Richard Bruton declared.

In a clear message to Labour, Mr Bruton said the party's attitude was "crystal clear".

"We have enough taxes. We see no case for increasing personal, corporate or capital taxation. Far from it. What this country needs is to give back to the taxpayer real value for the huge sums of money that their effort and sweat has yielded to the Exchequer in recent years," he told the FG national conference in Millstreet.

Questioned later about Mr Bruton's speech, the Fine Gael leader said: "Taxes are running ahead of the Government's own targets. We are clear. We see no case for increasing taxation."

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The strong line will cause some difficulties with the Labour Party, which has left open the possibility of some, though still unquantified, increases in capital taxes.

Mr Bruton favoured the capping of tax reliefs and pension contributions to ensure that high-earners could reduce their tax bill to zero, which is occurring for many earning over €1 million a year.

Tax credits, which were frozen in the 2002 budget, should be increased substantially and then index-linked thereafter to ensure that tax rates do not increase by default, he said.

Aware that €16 billion in Special Savings Investment Accounts (SSIAs) would be released next year and in 2007, Mr Bruton said people should not pay taxes on their accounts if they roll them into their pension.

State and local authorities should be required to get a Dáil-approved "public interest certificate" if they wanted to increase charges above inflation.

Despite the Government's claims to run a low-tax economy, Mr Bruton said taxes have jumped by €27 billion in eight years: from €21 billion to €48.5 billion or by 72 per cent in real terms.

The "sad truth" was that low direct tax rates have been maintained "by stealth taxes, by freezing tax allowances and by soaring charges" for hospital, utility and college charges.

Pointing out that the State took a third of the cost of a new home in taxes, the FG deputy leader said 65 per cent of the cost of a new car was accounted for by taxation, 60 per cent of an alcoholic drink, while taxes added 150 per cent to petrol prices.

Indirect taxes in the State were at the top of the EU league: Irish VAT was the highest.

"It is consumers who have made the sacrifice to secure the important objective of maintaining low direct taxes. Let us not forget what those tax rates are," he said.

"While the tax burden came down in the first few years since 2002 it has relentlessly grown, with the proportion of GNP collected in taxes rising from 34.7 per cent to 36.7 per cent."

The Government, Mr Bruton claimed, had wasted €6.5 billion on a variety of State projects since the 1997 election. "This is equivalent to €5,000 for every household in the country. What people do see is a catalogue of deplorable waste of public money on projects which have been ill-conceived and badly managed. The taxpayers have had to pick up the bill for all of them."

Ministers, he said, have announced "glamour projects to build up their egos", carried out no proper planning, and negotiated "bad deal with contractors, consultants and those clamouring for tax breaks".

No minister has stood up to take responsibility for mistakes.

"The tricks are covered. Some scapegoat is found. Ministerial fingerprints are sufficiently smudged so that they can chink and weave. If Ministers were in a private company they would be out the door so fast their feet would barely hit the ground."

Mark Hennessy

Mark Hennessy

Mark Hennessy is Ireland and Britain Editor with The Irish Times