Sunday 15 December 2019

Noonan: ‘There are people on €70,000 who aren’t particularly well off’

Minister for Finance Michael Noonan
Minister for Finance Michael Noonan
Brian O'Reilly

Brian O'Reilly

FINANCE Minister Michael Noonan has said there are people earning €70,000 who ‘wouldn’t be particularly well off’.

The Minister was explaining new measures he introduced in the budget to relieve the ‘squeezed middle’.

“We’ve all heard about the coping classes, and we’ve all heard about the squeezed middle”, he told Pat Kenny on Newstalk.

“I’ve defined it in money terms, it’s those people from €32800 - €70,000 who are going into the higher rate of tax, and I’m focussing on those.

“There’s somebody on €70,000 who wouldn’t be particularly well off, they’d pay €25,000 in personal taxes, you wouldn’t do that anywhere else. It’s a tax on jobs.”

He also ruled out axing the Universal Social Charge, introduced by late Finance Minister Brian Lenihan as a temporary measure at the height of the economic crisis.

“There will be USC for the foreseeable future. But the adjustments for low paid people will be for USC so they’re paying less. I’d like them to pay a little but not a lot.”

The Minister said he believes everybody, regardless of their income, should make some financial contribution to the exchequer.  

“I believe everybody that works should pay something. They’re citizens and should be part of a contribution.

“It’s (USC) going to be part of the personal taxation code. A lot of people at the bottom don’t like it.

“Some people wouldn’t pay tax at all if it wasn’t for the USC. From an Exchequer point of view it’s very efficient”, he said.

He quipped that when the House of Commons introduced income tax in 1906, it was also called a ‘temporary measure’.

Mr Noonan also said he is confident that the taxpayer will recover all money used to recapitalise the banks – however nothing would be recovered from the now wound down Anglo Irish Bank.

“It wasn’t an arrangement this government was party to, and we tried to fix it. We liquidated, and put in government paper to underpin it.

“We’re not going to get our money back out of Anglo, it should never have been done and never been arranged.

“On the banks we’ll be more than quids in, NAMA is already running a surplus. The liquidation of IBRC is running a surplus. We’ll lose overall on Anglo Irish Bank.”

He said the value of the banks is now leading him to rethink the need for retroactive recapitalisation from the ESM.

“I'm coming around to the view that we should be exploring other possibilities.

“The idea was one should give the bank shares to the ESM and they would give us money, but the banks are very valuable now.

“Over a period of time I’m confident now we will get our money back.”

He said European monetary policy was weak when compared to that in the United States or Britain – and that mistakes were made in the creation of the single currency.

“We can’t shift the blame on a ‘them and us’ model. The establishment of the Euro was flawed project. The architecture to underpin a common currency wasn’t put in place.

“Monetary policy in Europe is very weak. If you look at the US and UK they’re out of recession. They’re growing. The difference was their Central banks were allowed to intervene”.

Mr Noonan said the biggest threat to the Irish economy was the level of national debt.

He also said that he saw two key issues which need to be addressed – the availability and the price of credit.

However he ruled out using the state’s shareholding to dictate commercial policy to the banks.

“Government doesn’t interfere with commercial decisions. If we did, there’d be shades of eastern Europe 25 years ago.

“We need two strong banks competing, but we need other sources of credit as well.

Speaking on the next General Election, the Limerick TD said it was his intention to stand again.

He said the Water Crisis has given the electorate two clear choices for the next government – one led by either Fine Gael of Sinn Fein.

While the party’s preference is to govern alone, he said Labour would remain its choice of coalition partner.

While he did not rule out coalition with Fianna Fail, he said he could not yet form a view.

“Until Fianna Fail clarify their position it’s impossible to have a view about coalition with them.”

“If you look at the composition of independents in the Dail, there is a lot of left wing independents – but there’s a lot of centre right independents as well."

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