Friday 19 January 2018

Noonan's pledges a clear sign that era of austerity is over

Minister for Finance Michael Noonan speaking at the Spring Economic Statement at Government Buildings
Minister for Finance Michael Noonan speaking at the Spring Economic Statement at Government Buildings

Niall O'Connor and Daniel McConnell

A suite of tax cuts and further reforms to the Universal Social Charge (USC) will be rolled out over the next five years in the clearest sign yet that the era of austerity has come to an end.

Finance Minister Michael Noonan yesterday forecast significant economic growth until 2020 which he says will provide a major boost for job creation.

Mr Noonan said the delivery of 'full employment' by 2018, which will see all the jobs lost during the recession restored, was a clear sign to Irish emigrants that there were opportunities for them at home.

But the Fine Gael politician warned of the need to be "prudent", accusing the Opposition of having policies that would scupper the economic progress.

"We must never again repeat the mistakes that left Ireland on the verge of bankruptcy in 2010 and resulted in a lost decade and such hardship in the lives of so many people," he said.

The decision to outline tax measures up until 2020 is being perceived as a joint tax strategy between Fine Gael and the Labour Party.

Mr Noonan said the Coalition's plans would boost people's pockets.

"A growing economy is not an end in itself - it is the means by which we will improve living standards, create employment and deliver better public services to the Irish people," he told the Dáil.

Mr Noonan said he was confident the entire tranche of taxpayers' money invested in three of the country's main banks would be "fully recovered".

Significantly, however, his 30-minute speech made no mention of the 2012 European decision in relation to bank recapitalisation, a clear sign that he believes Ireland will not get any money from Europe.

Mr Noonan has for almost a year been slowly distancing himself from the prospects of Ireland receiving any European funds to offset the €64bn cost of Ireland's bank bailout since 2008.

Both Mr Noonan and Taoiseach Enda Kenny have repeatedly signalled a preference to sell AIB on the open market, and the absence of any mention of a retrospective recapitalisation was last night seen as significant.

Mr Noonan used his Spring Statement address to flag the Government's intentions to sell stakes in AIB, Bank of Ireland and Permanent TSB.

"The exit strategy is about recovery of the full cost of the taxpayers' investment in these institutions and using the proceeds to further reduce the debt," Mr Noonan said.

"The sale of 25pc of PTSB that concluded yesterday further improves the position and I am now confident that all the taxpayers' money invested in AIB, BOI and PTSB will be fully recovered," he added.

On the issue of mortgage rates, Mr Noonan said he "looks forward" to holding discussions with the country's pillar banks on their plans.

The Limerick TD said addressing personal debt was "essential" for the Government as the economy "returns to strength".

He told the Dáil that the number of households falling into arrears increased due to the recession.

He said he was awaiting a report from the Central Bank, following which the discussions with the banks will be initiated.

"The Central Bank will report back to me in the coming weeks and I intend, during the month of May, to initiate discussions with the six main lenders in Irish banking on the issue and look forward to hearing their plans for reducing interest rates," Mr Noonan said.

Irish Independent

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