Lenihan rules out tax rate hikes and welcomes backing for NAMA
FINANCE Minister Brian Lenihan last night said that if Irish banks had defaulted on their debts it would have led to "incalculable economic consequences".
He also ruled out any further hikes in tax rates in this year's Budget.
Addressing the annual dinner of the Irish Taxation Institute in Dublin, Mr Lenihan welcomed the European Commission's approval yesterday of the National Asset Management Agency (NAMA).
He said that he expected the majority of €54bn in loans to be transferred to the agency before the summer.
It's expected that the first tranche of those loans will go to NAMA within the next few weeks.
Mr Lenihan said the process of achieving the commission's approval for the establishment of NAMA had taken longer than expected as the agency would set a precedent for other member states "queuing up" to achieve similar goals to the Irish government's.
The minister also reiterated that the marginal rate of tax, which is currently above 50pc, would not be increased in next December's Budget.
He said that while he "did not underestimate the pain" being endured by many families around the country as a result of the current economic environment and Budget measures that saw pay packets reduced, he urged the end to "low-level" industrial action being undertaken by public workers.
"We need to bring industrial peace to our public services," said Mr Lenihan, adding that the government remained open for negotiations with representative bodies.
In a wide-ranging speech, the minister also said that people who wanted local government needed to be prepared to pay for it.
Mr Lenihan was alluding to the forthcoming election later this year for Dublin's first ever executive mayor.
He said local authorities had become too dependent on levies imposed on developers during the economic boom years to fund their services.