Irish News

Wednesday 17 September 2014

Noonan defens PRSI allowance axe

Published 06/12/2012 | 10:39

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Tanaiste Eamon Gilmore said the latest cuts were necessary to move the country a step closer to recovery

Finance Minister Michael Noonan has defended a hike in PRSI contributions introduced as part of a crippling budget, insisting people will benefit in the long run.

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As Taoiseach Enda Kenny said the Government had ensured the richest would contribute the most, Mr Noonan claimed low earners would still be hit.

Most workers will be forced to pay an extra five euro a week after the scrapping of the standard PRSI allowance, which was one of the headline cuts and tax increases unveiled among 3.5 billion euro worth of austerity measures.

"For somebody on low pay on 25,000 euro, an extra five euro a week to replenish the social welfare fund will guarantee their benefits, but particularly their contributory pension," Mr Noonan said. "It's about the best value for five euro that anybody can get."

He also stood by the introduction of a value-based property tax, saying it was preferable to hiking income tax and would ultimately protect workers.

Mr Noonan and Public Expenditure Minister Brendan Howlin were forced to defend the scatter-gun budget, which targeted everyone from the elderly and sick to the poor. The new property tax was among the headline cuts and hikes in what was the sixth austerity budget since the onset of the economic crisis.

Meanwhile, Mr Howlin was forced to defend his decision to slash the respite care grant, which will be cut by 325 euro a year - from 1,700 euro to 1,375 euro. He said the Government was anxious to protect the core payments of social welfare, but had to make savings somewhere.

Later, the Taoiseach said the cuts had been as fair and equitable as possible. Although he recognised it had been a difficult budget that would impact on families across the country. He said: "We have ensured that those who can afford to contribute most will do so. Primarily, we are supporting hard working families struggling to make ends meet by not increasing income taxes."

Among the few positive measures were a freeze on petrol and diesel excise duties along with a three-year exemption for property tax for first-time buyers and the purchase of new or unoccupied homes. There will also be a voluntary deferral scheme on the property tax for those hardest hit by the recession.

And in a bid to demonstrate politicians are not immune from the pain, TDs will now have to vouch for their expenses, while party leaders will have their special allowance cut by 10%.

Press Association

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