Spring Statement: Government pledges tax cuts and spending increases until 2020
The Government has pledged to introduce a suite of tax cuts and spending increases until 2020 as it fired one of the first shots of the General Election campaign.
The much-anticipated 'Spring Statement' today sets out a tax and spending plan aimed at workers, emigrants and hard-pressed families.
The Dail was told that the economy is set to grow by 4pc this year and a further 3.75pc each year until 2020 in a sign that the era of austerity is coming to an end.
While today's statement lacked in specific budgetary detail, it laid out the Government's plans to slash income tax particularly for the so-called 'Squeezed Middle'.
Read more: Spring Statement: Key points
And there was a clear message sent out to Irish emigrants: Jobs are being created at home.
But the statement was seized upon by the Opposition who claimed it lacked any firm pledges for struggling families.
In his speech, Mr Noonan said up to €1.5bn will be available for tax cuts and spending in the upcoming Budget.
Among the other measures detailed by Mr Noonan included:
- Plans to put pressure on the six main financial institutions to deliver interest rate cuts
- The entire tranche of taxpayers' money invested in three of the country's main banks, AIB, Bank of Ireland and PTSB, will be "fully recovered"
- The Government will introduce an "expansionary budget" this year and every year until 2020 "if this is deemed prudent".
- Employment is expected to go beyond two million next year with all jobs lost during the recession to be replaced by 2018.
- Measures to address mortgage crisis due in the coming weeks
Mr Noonan said returning to the days of “if I have it I’ll spend it” or the “even if I don’t have it I’ll spend it” will put the economic recovery in jeopardy.
He said this is an end to the "lost decade".
“We must never again repeat the boom and bust economic model. Over the remainder of this decade we expect all sectors of the economy to contribute to growth and employment,” Mr Noonan added.
Meanwhile, Public Expenditure Minister Brendan Howlin said the "fruits of economic growth” will be shared by all citizens.
In his speech, the The Labour Party politician detailed:
- Permission secured from Cabinet to open talks with public sector unions on pay
- Government will pump €750m into social welfare, education and health.
- Some 920 mainstream teachers, 480 resource teachers and 365 special needs assistants.
- There will be a need for an extra 3,500 primary and secondary school teachers by 2021, while the number of third level students will increase by 20,000.
Reacting to the Spring Statement, Sinn Fein deputy leader Mary Lou McDonald said the economic recovery has not been felt by many families.
He said there is no "game changer" for the low paid or so-called 'squeezed middle' despite the fanfare surrounding the statement.
Former Fine Gael Minister and Renua leader Lucinda Creighton has condemned the Government's Spring Statement on the economy as "scattered promises" and "disorganised thoughts."
Ms Creighton - who has launched her own party with other former Fine Gael TDs and senators - said the plans outlined in the Dail this afternoon harked back to the days of Fianna Fail's Charlie McCreevy as Finance Minister.
"The Generals continue to thrive whilst the soldiers continue to be shot," Ms Creighton said.