Thursday 22 August 2019

Kenny pledges to push ahead with USC cuts despite threats from Brexit

Enda Kenny takes part in the annual Christmas Carol concert held at Government Buildings. Photo: Tom Burke
Enda Kenny takes part in the annual Christmas Carol concert held at Government Buildings. Photo: Tom Burke
Cormac McQuinn

Cormac McQuinn

Taoiseach Enda Kenny will plough ahead with further cuts to the USC, despite the perils facing our economy in the wake of Brexit.

Mr Kenny has rejected suggestions that it would be prudent to rein in plans for further tax cuts.

The Government instead will push ahead with the Programme for Government including a further increase to the State pension and plans to increase tax credits for the self-employed.

Mr Kenny pointed out that while the next decade will be "difficult", Ireland's economy is projected to grow by 3pc a year.

Mr Kenny vowed to "follow through" on the plans agreed with Independent TDs in Government.

Fine Gael promised to abolish the USC (Universal Social Charge) over five years ahead of the General Election. The Programme for Government states that it will continue be "phased out".

The three lower rates of USC were cut by 0.5pc in the Budget at a cost of €335m over a full year. Workers will see the impact of that in their first pay packet in January.

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Meanwhile, pensioners will see a €5-a-week increase from March and the Programme for Government commits to increasing the State pension above the rate of inflation.

It also pledges to increase the earned income tax credit for the self-employed to €1,650 by 2018.

In a round-table interview with reporters, Mr Kenny was clear he intends to press on with such measures.

He was asked if it would be prudent to pull back from those commitments given the threat to the economy posed by Brexit.

"No, we've set out our Programme for Government", Mr Kenny replied and pointed to predictions of continued growth of the Irish economy.

He said that the Government was "very focused on continuing to manage the economy carefully and prudently in the public interest".

"That's why the growth rates projected by the ESRI (The Economic and Social Research Institute), while it's going to be difficult for the next eight or nine years, average around 3pc."

Mr Kenny also said that opportunities would arise from the UK decision to leave the European Union.

"We need to use every opportunity that comes our way - new markets, new countries, trade missions, the potential benefits that may come from some of the of the decisions arising from Brexit," he said.

The Government is seeking to attract London-based financial services jobs to Ireland as banks and other institutions consider re-locating to EU countries.

"Our priority really is to continue to manage the economy in the interests of everybody, follow through on our Programme for Government, and continue to legislate and make decisions in the best interests of all the people," he said.

The continued creation of jobs is "key" to economic strategy, Mr Kenny said.

He said that more than 1,000 jobs a week were created in 2016 and the unemployment rate dropped to 7.3pc.

"That's obviously a strong performance given situation and the nature of the difficulties and challenges right across Europe," Mr Kenny said.

He said the Government's target for job creation remained 200,000 over five years, with 135,000 of those outside Dublin.

He promised a new Action Plan for Jobs and an Action Plan for Rural Ireland in the new year. "So we expect to create around 50,000 jobs in 2017 and that's going to be our target both between SMEs and foreign direct investment," Mr Kenny said.

Irish Independent

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