Thursday 29 September 2016

Joan Burton: Tax cuts are essential - but the highest earners will still have to pay fair share

Joan Burton

Published 04/01/2016 | 02:30

Tanaiste Joan Burton. Photo: Tom Burke
Tanaiste Joan Burton. Photo: Tom Burke

This year, as we commemorate the Rising, the people will also elect the next government. To me, it is fitting that there should be a General Election in 2016, because the people voting to chart the future course of a sovereign state is precisely what the founders fought for.

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Of course in 2010, we lost much of that sovereignty in a very real sense as the troika arrived in town after the Fianna Fáil-led government brought the country to the brink of ruin.

Five years on, the overall picture is very different. Labour in government, together with our coalition partner Fine Gael, have driven a strong economic recovery. That recovery is why this month all workers will take home more pay because of USC reductions; why child benefit will increase by €5 to help every family; and why older people will see the state pension rise by €3 a week.

These are modest but progressive steps in our wider plan: to spread the recovery in such a way that the benefits are felt by every household.

That starts with delivering full employment - meaning a job for every person who wants one - and already there has been significant progress. We are on the verge of having two million people at work.

Businesses have enjoyed the best trade at Christmas since 2008 - because many people are in a better place financially and feeling optimistic about the future.

But not every person, and not every family, has felt the recovery yet. So it's essential that the wider plan be implemented in full. And in my view, that will happen only with Labour returned to government, together with Fine Gael.

We are different parties, with different outlooks on economic and social issues. But the people chose a balance of centre-left and centre-right parties in 2011 to turn the country around and the balance has worked.

The first phase of the work - building the recovery - is largely done. Now, we are embarking on the second phase - raising the living standards of our people, who gave so much to get this country back on its feet.

And stable, balanced government will be essential to complete the task.

Let's consider stability first. Our public finances are in rude health and our public debt has been brought firmly under control. We are recording the fastest economic growth in the EU. More than 1,000 new jobs are being created every week.

New and exciting apprenticeships are being created for our young people and the Government is working hard to bring emigrants home. The continued stability delivered by this Government offers continued progress on all these fronts and more.

The Opposition cannot offer such stability. For a start, Fianna Fáil and Sinn Féin don't want to govern with Fine Gael and don't want to govern with each other. They therefore cannot present a credible alternative government and that's before we even discuss policy.

So far, all we have are mostly vague, disjointed fragments of a policy agenda disconnected from a coherent strategy and, in some cases, equally disconnected from reality. Voters deserve better.

Fianna Fáil's economic policies caused the bust in the first place, while Sinn Féin's would return us to bust. They are a gamble guaranteed to turn bad.

Next, to the need for balance. Fine Gael's natural instinct is to drive the bulk of available resources to tax reductions, with the remainder to public services.

In Labour, we take a different view. We believe that tax reductions are essential for low and middle-income workers - but that the highest earners must continue to pay their fair share. That's why, under Labour's plan, USC will be abolished on the first €70,000 of income, but those fortunate enough to earn more than that will continue to pay USC on the portion above €70,000 and gains will be progressively capped for the very highest earners. This means that, under our plan, those on individual incomes above €120,000 will continue to pay precisely the same taxes as they do now.

In this way, income tax relief goes towards those who need it most and the bulk of available resources can go towards essential services.

I am confident, for example, that with Labour in government over the next five years, we can continue to progressively increase the state pension, deliver the smallest class sizes in the history of the State, provide high-quality childcare at much lower cost to parents, and deliver free GP care for all. And in tandem with full employment, we will focus on delivering a Living Wage to accompany it.

There will be those who say this sounds like auction politics. It is nothing of the sort. It is building on the work done to date - USC is already being progressively reduced; the pension was protected throughout the worst of the crisis and is being increased now; the pupil-teacher ratio is being reduced in primary and post-primary schools this year; children are now eligible for free childcare from three to five and-a-half years of age; and free GP care is already a reality for children under six. The minimum wage, meanwhile, increases this month for the second time under this Government.

That is what we have delivered through stable, balanced government - and that is what Labour will continue to deliver if returned to government.

Labour will stand up for working people, for families, and for older people who deserve security in retirement.

We will stand up for Ireland's future.

Irish Independent

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