BUDGET POLICY:TAOISEACH ENDA Kenny has confirmed that income tax will remain untouched in the Budget which will be delivered to the Dáil today and tomorrow.
Instead, he said, the Government would raise the €1.6 billion of extra taxes that Ireland needed mainly through indirect taxes, difficult though those would be.
“The highest priority is to create more jobs, but we will also do all we can to protect the most vulnerable in our communities - our children, the sick and the elderly.’’
In his RTÉ state of the nation address, Mr Kenny said he wished he could tell people that the Budget would not impact on every citizen in need, but he could not.
“Difficult choices are never easy, but we will invest in crucial projects like the National Children’s Hospital, school buildings and health centres.’’ The Budget, said Mr Kenny, would be a “jobs’ Budget’’ in two ways.
“Firstly, by putting our public finances back on to a sound footing. “As our deficit moves to sustainable levels, investors will start regaining their confidence in Ireland and credit will be made available at better rates.
“This means that businesses will be able to start borrowing, expanding and hiring again.
“Secondly, the Budget will include a series of targeted measures specifically designed to create jobs and get people back to work.
“It will include, among other initiatives, a new system of loan guarantees which will enable banks to resume lending and a new micro finance scheme which will help people to start their own businesses.
“This will allow small firms to take on one or even two employees.’’ Mr Kenny said that before asking families to make sacrifices, the Government also insisted on sacrifices from those at the top. “We cut the pay and removed State cars and Garda drivers for Ministers.
“In the last few weeks, I have informed former taoisigh that entitlements, like free mobile phones and staff allowances, are being withdrawn.
“The pay and pensions of senior public servants have been cut.’’
The Budget would go further, said Mr Kenny, with the abolition or merging of 50 quangos. The public sector would be downsized by 23,000 people by 2015.
A referendum would be held next year to abolish the Seanad.
But those steps were just a start, said Mr Kenny.“We will reform how we run the country so that we never return to the practices that drove our economy into free fall – reckless spending, weak oversight of banks and reliance on a property boom for tax revenues.”
Mr Kenny said Ireland supported stronger economic governance throughout Europe, and particularly in the euro zone.
“In fact, the Irish people are paying the price now for the absence of such rules in the past.
“European leaders must make and – more importantly this time must implement – clear decisions this week to prove our shared determination to protect our currency. Otherwise, international confidence and investment in Europe will continue to fall.’’
Mr Kenny said that in outlining the Government’s strategy, he did not, for a moment, want to make it sound simplistic or painless. “It is not. We are on a four-year path to recovery. This, our first Budget, is a necessary step, but it will include cuts to many worthwhile projects.
“It will also raise some indirect taxes which will be hard for many people.
“The truth is that our economy remains fragile, and it will take us several years to recover fully.’’
Mr Kenny said the Irish people were not responsible for the crisis.
The Government was determined, he added, that the necessary decisions and changes would be made to ensure that it would never happen again.
“That requires fixing the enormous deficit in our public finances caused by too much borrowing and the cost of rescuing the banks.’’
It meant cutting public spending by €2.2 billion and raising €1.6 billion in extra taxes in the Budget.
Mr Kenny noted that tomorrow marks the 90th anniversary of the signing of the Treaty in 1921.
“Just as our fledgling State made its way to becoming a Republic then, I believe with all my heart, that we the Irish people can now make our way to recovery, to prosperity and to the fulfilment of the dreams of our children and the founding fathers of our nation.’’
