Business Irish

Thursday 18 September 2014

Brendan Howlin insists may be 'leeway' for tax cuts in Budget

Insistence came follow warning from fiscal watchdog that €2bn in cuts and savings needed

Niall O’Connor and Colm Kelpie

Published 17/06/2014 | 10:19

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Minister for Public Expenditure Brendan Howlin
Minister for Public Expenditure Brendan Howlin

PUBLIC Expenditure Minister Brendan Howlin has insisted that there may still be some "leeway" for tax cuts in October's Budget despite a stark warning from the country's fiscal watchdog.

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Mr Howlin was responding to a report by the Irish Fiscal Advisory Council which urged the government to stick to a package of €2bn worth of savings.

The watchdog said the coalition would be "unwise" to aim for an adjustment of less than €2bn if it wants to meet its 3pc deficit target.

And if it's not met, this could leave Ireland being hit with a fine of about €300m from Europe as well as a rise in borrowing costs, the Fiscal Advisory Council (FAC) said yesterday.

"We're certainly aware of the political difficulties in terms of implementing another very difficult budget," said Fiscal Advisory Council chairman Professor John McHale.

But speaking ahead of this morning's cabinet meeting, Mr Howlin said he believed there was still scope for tax relief.

The Minister of Finance has indicated that the end of May [exchequer returns] returns are good. Expenditure is very much under control and income into the State by way of income tax is way above profile" he said.

"More people are at work. That means that there are more people paying income tax, more people paying PRSI. So all that is good and I think may give leeway at the end of the year if that pattern continues but I think we have to be cautious," he added.

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