A CLEAR CHOICE exists between the Government's promise to share tax reductions equally within society and the Fianna Fail/Progressive Democrat pledge to concentrate benefits on the higher paid, the Fine Gael deputy leader, Mrs Nora Owen, said yesterday.
Presiding over the issuing of Fine Gael's election manifesto in Dublin, the Minister for Justice said the Rainbow parties were committed to creating employment and greater tax equity through increasing personal allowances by 50 per cent; widening the standard tax band by 20 per cent; reducing PRSI to 3 per cent; reducing the top rate of tax from 48 to 45 per cent and reducing levies by increasing the threshold by 66 per cent.
Fine Gael, the Labour Party and Democratic Left had agreed the broad goals of future economic and social policy, she said, but the parties were free to adopt their distinctive approaches within that framework during the election campaign. There would not be a specific Government policy on tax reductions.
As for Fine Gael's proposals, she believed the party could deliver on what had been set out. Different parties might have a different emphasis on certain elements in their documents, but there was no fundamental disagreement as to the broad agenda.
Policies on education, health and the family, on crime and on the environment would be issued by Fine Gael over the next two weeks, she said. The party also intended to issue specific policy statements on Dublin, on Cork and on the west and Border counties.
The Minister for Enterprise and Employment, Mr Richard Bruton, said the Government planned to create 200,000 new jobs over the next five years and to create work, or pathways to work, for all young people under 25. The aim was to place Ireland among the top 10 of the world's most competitive countries. There would be greater investment in education and in new technology and the semi state sector would be encouraged to act commercially, he said.
Fine Gael's priority would be to reduce the top rate of tax from 48 to 45 per cent. Under Fine Gael's proposals, 85 per cent of single taxpayers and two thirds of married taxpayers would be better off than under Fianna Fail. Almost all married taxpayers would be better off because of the more generous childcare provisions.
Instead of simply reducing tax rates and concentrating the benefits on the higher paid, the Government parties were trying to build a society which included everybody by giving people on middle and lower incomes a break and by removing disincentives to the creation of more jobs.
As part of this strategy, each person under the age of 25 who was unemployed for a year would be guaranteed a job or a planned pathway to a job, through training and local employment services. This would carry with it an obligation for the unemployed to participate in schemes and to accept the offer of work. Failure to comply with such obligations would result in the withdrawal of social benefit, Mr Bruton said.
The Minister of State at the Department of Finance, Mr Hugh Coveney, said all borrowing for current and capital purposes would be eliminated and government Departments would be encouraged to cut back on wasteful expenditure through a Fiscal Transparency Act and a system which would allow 70 per cent of savings to be used for other more productive purposes.
Cutting tax rates was of little benefit to workers, Mr Coveney said, if they took home less money at the end of the week. The Government parties aimed to create a situation where a single person on £17,000, or a married couple with £34,000, would pay tax at a rate of 26p in the pound.
Asked about the different approaches by the three Government parties to the detail of tax reforms, Mr Coveney replied that, while they had agreed the targets, further negotiations would be required in government.