Taoiseach Enda Kenny has repeated a pledge to reduce the rate of income tax paid by middle income earners to at most 50 per cent in next year’s budget and even further if the Coalition is returned after the next general election.
Speaking at a Fine Gael event in Dublin, Mr Kenny denied the Government was fuelling speculation of an early general election with the announcement, insisting it will take place in spring 2016, but he also took aim at election rivals Sinn Féin and Fianna Fáil in his comments.
“At the next budget we will reduce the rate of tax on middle income earners to at most 50 per cent and we will reduce the rate of income tax further in subsequent budgets if the people decide to re-elect this Government,” he said.
“The Opposition on the other hand have no tax plans or else want to increase tax on workers to pay for everything. In response to our progressive plans, they can only offer ill informed soundbites.”
Mr Kenny said the tax strategy being pursued by the Government would “result in all tax paying workers and self employed people paying less next year while maintaining the highly progressive nature of the tax structure that we have”.
In his budget speech, Minister for Finance Michael Noonan said moves to reduce the higher 52 per cent rate of tax in 2015 were "the first instalment of a plan" to reduce the burden on low and middle income earners.
Mr Kenny said Fianna Fáil and the Green Party had "massively" increased the top rate of tax from 43.5 per cent in 2008 to 52 per cent.
He said workers in the UK paid the higher tax rate when earning over £150,000, in Australia it was $122,000 but in Ireland it was €32,800. The Government was keen to repay people for the sacrifices they made during the economic crisis and to attract back people who felt they had been forced to leave, he added.
Asked where things had gone wrong for the Government given he found himself reminding people of parts of the budget just weeks later, Mr Kenny replied that it was a lesson of politics to keep people informed of what you are doing.
He said there “was so much information available and indeed so much misinformation available that it can be quite confusing” for people at times.
Asked what would be done for people on social welfare, Mr Kenny replied that benefit rates had not been reduced and he hoped the public sector could help to reduce unemployment alongside the private sector soon.
Mr Kenny said there was "certainly" no split between Fine Gael and Labour on tax reforms amid soundings that the former is keen to reduce PAYE and the latter the Universal Social Charge.
“This is a Government of great cohesion and solidarity and I might say that those who try to destabilise the Government have nothing else in mind other than destabilisation,” he said. “Stability in the Government over the last three and a half years has ensured stability, investment and the creation of jobs. The macroeconomic figures are clearly heading in the right direction...but that’s of little consolation to someone who doesn’t have bread in the kitchen.”
Mr Kenny said an upcoming Sinn Féin motion of confidence in him was being used by the party as an excuse to raise the water charges again. Sinn Féin was a party that had become “utterly populist” in its “obsession” with 2016, he said.
“This Government are pointing out clearly the way forward here. You make difficult choices and they are paying off. It’s a case of holding course and building on the foundations we have put in place so that the people of the country will all benefit not just those in any particular area or category.”
