Noonan won't rule out tax hikes for jobs plan
Published 16/04/2011 | 05:00
The Government last night refused to rule out tax hikes to pay for the measures to be included in a so-called jobs initiative next month.
The Coalition also again warned that public-sector reform would have to be delivered upon or else there would be further pay cuts.
The EU and IMF agreed the coalition could proceed with its jobs plan, including the reversal of the cut in the minimum wage and a cut in employers' PRSI.
The jobs initiative, formerly called a jobs budget by the Government, will be announced early in May by Finance Minister Michael Noonan.
The previous cost of the package was €220m, but the minister did not say if all the planned elements were still going to go ahead.
But Mr Noonan and his colleague, Public Expenditure Minister Brendan Howlin, refused to say how the plan would be funded.
He indicated the funding would come from cutbacks in departmental spending but would not say where this would occur or if there would be a tax element.
"It has to be fully cost-neutral like everything else," Mr Noonan said.
Mr Howlin said nothing would be done to dent confidence in the economy.
"The scale of it will be clear and how it is paid for will be clear when the minister makes his statement," he added.
Mr Noonan explained why the term "jobs budget" had been ditched by the Government.
"I suppose the word 'budget' has connotations of pain and suffering," he said.
In relation to Government warnings to the public sector of further pay cuts if the Croke Park agreement reforms are not progressed, Mr Noonan said this was a commitment in the deal with IMF and EU.
Mr Howlin said the threat of pay cuts was always there. "It's not only in the memorandum of understanding but it is also in the Croke Park agreement.".