Wednesday 26 July 2017

Noonan confirms controversial USC will be cut by at least 1pc in Budget

Minister for Finance Michael Noonan
Minister for Finance Michael Noonan
John Downing

John Downing

FINANCE Minister Michael Noonan has confirmed he will cut the Universal Social Charge by at least 1pc in the Budget next October.

"I use the Budget for economic management purposes and I’m going to cut personal taxes in this Budget," the Minister said.

"I’m going to cut the Universal Social Charge (USC) by at least 1 per cent and maybe a bit more," he told Pat Kenny on Newstalk.

Mr Noonan said he especially wanted to target people on low pay to ensure work paid better than welfare. He said he needed to change income tax, PRSI and the USC in different ways to achieve a better reward for work.

"I’m doing it so work pays better than it pays now and there’s more take-home pay and that I’m incentivising more people to go to work and I’m incentivising people to come home who were forced out,” Mr Noonan said.

The comments also confirm previous government signals that changes are likely in relation to the 7pc cent USC rate for workers on between €17,500 and €70,000 per annum. It also signals hopes among backbenchers in both government parties that Fine Gael pushing for a cut in the higher tax rate, and Labour pushing for USC changes, can compromise.

On the ongoing Greek crisis, Mr Noonan said there was a “better than 50 pc chance” of a deal on a new bailout. He said the other EU and Eurozone countries were not sure up to now how serious the Athens government was about a third bailout and might have preferred exiting the euro while blaming their partner countries.

“It seems now they are quite serious and the have started the legal process. We got a letter signed by the Prime Minister of Greece, on behalf of his government and the Greek people, requesting a third programme for Greece,” the Finance Minister said.

Mr Noonan said the new Greek Finance Minster, Euclid Tsakalotos, had made a better impression than his predecessor, Yanis Varoufakis.  He said Mr Varoufakis had given an impression of disinterest and detachment.

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