We are now able to deliver overdue financial relief
Hold the old chestnut about buying elections, people have come through hard times, says Simon Harris, and the Government can help
Published 10/05/2015 | 02:30
The result of the election in our nearest neighbouring country was a surprise to many. While we are different countries in terms of political systems, we do, however, have three points of commonality. The first is that both countries have experienced a difficult economic period over the last several years. The second is that the economies in both countries are now growing again. The third is the fact that people in both countries have suffered greatly on the road to recovery.
Many of the Irish people who have suffered quietly are among what are frequently called the "squeezed middle" and the "coping classes". They don't call themselves either of those terms. Tolstoy wrote that while all happy families are alike, each unhappy family is unhappy in its own way. Each and every family in this country that found themselves poorer as a result of the economic meltdown at the end of the last government's time in office knows the truth of that sentence, because each has been hit by a set of financial problems unique to them. For one family, it's been the need to get money for speech therapy for a child with a disability. For another, it's been the humiliation of asking a parent for a dig-out because otherwise the mortgage payment can't be met. For a third, it's the misery of an incoming unexpected bill that plays hell with the best laid family plans.
People who pay their way, do their best and still find the bank account runs dry towards the end of a month are developing the sense of exhaustion that comes from running fast to stay in the same place. The way to help these people is to recognise that their tax bill is too high and needs to come down. We need to use the new-found and hard-won "fiscal space" available to the Government and to the country to acknowledge this and to take action.
The Spring Economic Statement isn't a page-turner. But it shows that, thanks to the work of the people and the policies of the Government, we can reduce tax in the next Budget. And in the one after. And in the one after that. By up to €750m each year.
And not just that; we can reduce the tax impact on people in Ireland by over €2bn over those three years and, while doing so, help create a further 20,000 jobs.
The ESRI has shown that reducing tax can help fuel job creation. It can help us achieve our plan to have full employment - faster than anyone expected.
The Fianna Fail plan would have seen more taxes on working families. They wanted to tax their way out of the crisis. We ditched their plan.
It's just not fair or sensible that as the economy recovers, the State would take over half of any hard-earned pay increase or extra hours worked in tax.
In the last Budget, we began the process of reducing the pressure on families; we cut the two lower rates of USC - 410,000 people who paid USC when we came to office no longer do so. The 7pc USC rate is still too high. Way too high. The Taoiseach has committed to cutting that.
Fianna Fail introduced the USC when the country was teetering on the brink of bankruptcy. We now need to reduce its impact. We need to lessen the pain. We need to make recovery real. Which means tax cuts to the money going into people's pockets.
And hold that old chestnut about buying elections. We're already hearing that one from opposition parties dismayed by the clear evidence of national recovery. When all of the statistics and all of the authoritative observers point to steady and strong reduction in unemployment - and not just to the recovery of our financial sovereignty, which is already a fact - what else can the opposition say? They can't afford to acknowledge that, for the first time in decades, we have had a Government of courage, competence and resolution that has delivered what the opposition parties claimed could never be delivered.
Instead of making irresponsible promises that can't be delivered, the Government has outlined the space we have for tax cuts and for investment. The first will make a real and continuing difference to the people who have taken the heat over the past few years. Their salaries will be more useful, their financial pressures reduced, not just this year, but in the years to come. Investment will create the foundation for solid jobs across a variety of sectors, as opposed to the reckless reliance on the construction sector that characterised the last Government.
The sensible electorate of this country heard, from the start of this Government's time in office, that we were determined to fight through the economic disaster facing us and that once we could, we would make life financially easier for our people.
Now - thanks to the tough times Ireland has come through - we're headed for a period during which we can and will deliver for people who are overdue some financial relief.
Simon Harris TD is the Minister of State at the Department of Finance and the Fine Gael TD for Wicklow and East Carlow