Taoiseach Enda Kenny hints at cutting USC by more than 1% in budget

Taoiseach Enda Kenny wants to cut the universal social charge by more than 1 per cent in the next budget.

Mr Kenny said he supported calls by the Minister for Finance, Michael Noonan, to reduce the burden of the levy on workers. He said the budget would be about giving people something back after years of austerity.

“I have already announced the burden of taxation will get below 50 per cent,” Mr Kenny said. “That is why the Minister for Finance has said we will reduce the USC by at least 1 per cent.

“That is money coming back to people’s pockets. People hate the USC. It was brought in as an emergency measure by the previous administration but is gone before people get it.”

Mr Kenny said the Government would have between €1.2 billion and €1.5 billion to divide between tax cuts and spending increases in October. He said Mr Noonan would have up to €750 million for taxation measures, and a cut of more than 1 per cent in USC was one of the measures he was examining.

The Taoiseach told Mid-West Radio it was unfair that for every extra hour somebody worked the Government took 50 per cent in tax.

He said the Government was focused on giving back “what we can”, and the focus was on equalising the difficulties self-employed people faced and reducing the tax burden for workers.

Minimum wage

Mr Kenny also responded to reports that the Low Pay Commission had called for a rise of 50 cent an hour to the minimum wage, bringing the rate from €8.65 to €9.15 an hour.

Mr Kenny said the Government would “reflect very carefully” on its findings before making any final decision.

He said any change would impact employers and needed to be reflected with PRSI changes for employers.

“The Government will be looking at the recommendations, accept the report and put together a package that will balance these things out.”

Mr Kenny also denied the Government was in election mode and insisted the election would not be held until 2016.