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Saturday 10 December 2016

Budget will eventually be seen as 'reforming' – Noonan

Tom Molloy and Michael Brennan

Published 06/12/2012 | 17:00

FINANCE Minister Michael Noonan has robustly defended his second Budget, saying it would be recalled as "reforming".

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Mr Noonan said he had finally broadened the tax base by introducing a property tax after years of discussion while also reforming the public and private pension system.

"We have the most progressive income tax system in the EU," he said.

Mr Noonan defended his decision not to increase the Universal Social Charge for those earning over €100,000 for top earners, which annoyed Labour backbenchers.

He said it would have broken the commitment in the Programme for Government not to increase the marginal rate of tax.

And he said he had been advised by multi-national companies that it would discourage foreign executives from moving to Ireland.

"When it comes to the individual tax rate, the decision to set up here or in the UK or France is very often down to the chief executive who's coming to work here – and he looks at his pay packet," he said.

Mr Noonan also denied the Budget will cost the average family €1,000 per year in taxes and lost benefits.

Asked how he could justify taking so much from hard-working families, he said only exceptional cases such as a family with six children living on a low income but living in an expensive house would lose that sort of money.

"I don't accept that figure. You might get an example that fits that but it's not typical," he said.

Mr Noonan said Ireland was now competing directly with the UK for foreign direct investment, especially since it cut corporation tax to 21pc yesterday to lure companies to set up shop in Britain.

Wine

Mr Noonan defended his decision to increase the price of a bottle of wine, saying it was the first increase since 1994. He said the duty on spirits last rose in 2002 and there have been no hikes in alcohol duty in the past six budgets.

At the joint press conference in Government Buildings, Public Expenditure Minister Brendan Howlin said the Budget might be the last December Budget and suggested October as a possible date.

He also defended the decision to implement a flat rate cut of €10 to child benefit payments rather than means testing or taxing them.

Irish Independent Supplement

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