Saturday 22 October 2016

Kenny's ham-fisted effort to clarify comments just muddies the water

Published 01/07/2015 | 02:30

Enda Kenny
Enda Kenny

The Taoiseach has attempted to clear up the mess he created by claiming this country did not hike valued added tax, income tax and pay related social insurance during the bailout.

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But his rather ham-fisted explanation has only served to muddy the waters.

Controversy has raged since Enda Kenny said in Brussels that income taxes and valued added tax (VAT) were not increased during the bailout by the Troika.

He had urged Greece to follow Ireland, and said: "In Ireland's case we did not increase income tax; we did not increase VAT; we did not increase PRSI."

Fianna Fáil finance spokesman Michael McGrath was among those who said the statement simply did not reflect reality, with a huge range of tax hikes since the Fine Gael-Labour Coalition came to power.

Mr McGrath said the attempt to clarify the situation was unsuccessful.

"The facts are clear that in each category, VAT, PRSI and income tax, the Government has been increasing what they are taking out of the economy. This is alongside a whole raft of stealth taxes which are hitting family incomes."

He said water charges were also an effective tax for households on the top of the local property tax. "Enda Kenny cannot credibly claim to be leading a low-tax government," Mr McGrath said.

Mr Kenny was later asked if his comments were not misleading and unfair as the standard rate of VAT was increased and parameters of PRSI (pay related social insurance) were changed.

"What I meant was in the context of where Greece is now and the opportunities that Ireland had to deal with our challenge; one of the issues that was so important in Greece and here was the hospitality sector.

"We could have tinkered around with this. But we reduced from 13.5pc to 9pc VAT in the hospitality sector."

The Taoiseach said the reduction in VAT for the hospitality industry had stabilised that sector, and created another 35,000 jobs.

"And that's what I meant by saying we didn't increase VAT, because the Greek position was that tourism is so important to them and they have problems with the extent of the number of islands they have and the distances they are apart."

He said his Government had taken out 420,000 people from the Universal Social Charge net.

That is possibly what he meant to say in Brussels.

But the fact remains that is not what he said. He had insisted VAT had not been raised when the standard rate has been increased to 23pc during his leadership, even if the hospitality sector got a reduction. And there have been changes to tax credits and bands during the bailout programme.

Changes to PRSI by this Government mean more people are paying it, and stealth taxes have been piled on consumers like the property tax and water charges. Why not just admit he got it wrong?

Irish Independent

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