No alternative to tax hikes, says Gilmore
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Taxes will have to increase, but the current Government's second budget will have to be part of a coherent three-year national recovery plan, Labour leader Eamon Gilmore said yesterday.
Addressing more than 1,000 delegates at the Labour conference in Mullingar, Co Westmeath, he described the recession as a "horrible human experience". Mr Gilmore said Ireland will recover, although there is no quick fix.
He added that what was needed was a plan for the public finances, not just another set of panic measures.
"You cannot close the gap between income and expenditure in one year alone. Sending the country further into a downward spiral of job losses, followed by cuts, followed by more job losses, followed by more cuts.
"Do taxes have to increase? Yes, they do. They are increasing already and are going to have to increase more.
"Nobody likes that, but there is no choice -- that is where Fianna Fail has brought us. The gap cannot be sustained."
He said the Labour Party would publish their pre-budget statement next week, and their tax proposals would include a third rate of income tax for the highest earners.
Mr Gilmore added: "If working people have to pay more tax, then everybody is paying tax. And that goes for tax reliefs on property and on director's pensions."
He called for everyone in the country to work together to beat the recession and warned against the scapegoating of public service workers such as "nurses, teachers and gardai".
Mr Gilmore said the anger that everyone felt towards the Government which had lined the pockets of a few and had left the rest to rescue a country brought to the brink by sheer naked greed should be harnessed and focused on economic recovery.
He said that the culture of "crony capitalism" nurtured by the Fianna Fail administration must be replaced with a merit-based society where people were rewarded for hard work and genuine risk, and not for sharp dealing and insider trading.
Labour's finance spokeswoman Joan Burton said a scheme should be put in place to encourage under-25s to return to education as an alternative to remaining on the dole queues.
Ms Burton added: "The social cost of leaving a generation to rot will be far greater then the financial cost of creating jobs and training now.
"Crime, welfare dependency, children's problems, mental and physical illness and all the other social ills are huge debts that will weight on Ireland as surely as any projections of future deficits/"
Speaking on justice in tax affairs, she said: "The McCaughey case has highlighted how easy it was to set up a perfectly legal tax scheme to avoid a modest 20pc tax on a €25m profit from the sale of a business that had enjoyed multiple taxpayer subsidies.
"A whole industry has developed among tax accountants and lawyers to facilitate this, with the connivance of Fianna Fail Finance Ministers over the past 12 years.
"This has to end. The Government had failed to understand there is a hostile mood in the country against greed,excess, waste, tax cheating and selfish, self-indulgent behaviour, an intolerance of binge lending by banks and vanity spending by Government," she said.
- Don Lavery
