Noonan: tax cuts on way for squeezed middle
Published 02/05/2014 | 02:30
MIDDLE and low-income families have been promised tax cuts by Finance Minister Michael Noonan in his strongest comments yet ahead of October's Budget.
Mr Noonan, speaking at a Fine Gael event in Dublin yesterday, said the current level of income tax, particularly for lower-paid workers, was a major inhibition and barrier to people getting jobs.
Mr Noonan signalled clearly that he intends raising the bands to increase the level at which people begin to pay the higher rate of tax.
"The greatest inhibition in the income tax code is that on an income of €32,800 people go on the higher rate of income tax," he said. While he has suggested tax cuts previously, Mr Noonan's comments represent the most tangible signal of his intentions for the Budget.
Despite having to introduce spending cuts and tax increases totalling €2bn, Mr Noonan said his priority now is to look closely at the income tax codes.
As the tax take begins to flow more strongly into the Exchequer, the Finance Minister said he wanted to make sure that current income tax codes do not prevent job creation.
He also said he wants to address those barriers which are preventing people from taking up jobs and preventing our young people from coming back home.
"So it is a priority of the Government to address that, and to lift that figure . . . whatever resources we have available over the next two Budgets we will do that," he said.
"I hope we will be able to start the job in the Budget in mid-October."
Meanwhile the Government's tax receipts for April are 9pc higher than they were a year ago.
The Finance Minister says he saw a preview of the figures last night. He says the income tax take is about 6.5pc higher than 12 months ago.
Mr Noonan also pointed to his record of adjusting taxes to create jobs since taking office in 2011, despite the pressures on the public finances.
"Over the three years, even when we didn't have any money, we changed the tax codes so we made it more jobs friendly.
"We cut the VAT rate on the tourist industry from 13.5pc to 9pc. That created an awful lot of jobs in the tourism industry," he said.
His comments however come in the wake of an Irish Independent/Millward Brown opinion poll on Monday in which voters signalled they would prefer an end to austerity rather than tax cuts.
Last week, a number of trade unions called for pay hikes amid signs of economic recovery.
The Civil, Public and Services Union, representing lower-paid civil servants, called for restoration of pay lost under the last two cost-cutting deals with the Government.
SIPTU and IMPACT indicated they will seek pay raises if the government finances improve during the Haddington Road deal.
David Begg, leader of the Irish Congress of Trade Unions, has backed calls for post-troika wage rises. Companies who could afford it should pay up, he said.