Taoiseach Enda Kenny has promised to continue cutting tax rates for middle-income workers if Fine Gael is returned to power after the next general election.
After the first tax cut since the economic crisis in Budget 2015, Mr Kenny has vowed to knock at least another 2pc off the marginal rate of tax.
Mr Kenny’s focus on the economy will be viewed as an effort to move on from the water charges controversy.
And he said the cuts would again be specifically targeted at middle-income earners on wages between €33,000 and €70,000 – the cohort of workers who will benefit from next year’s tax reductions.
Speaking to the American Chamber of Commerce, Mr Kenny said high taxes were an obstacle to job-creation and he pledged to continue plans to cut tax on work.
“We understand that Ireland’s high rates of personal taxation are something that has to be addressed if we are to remain internationally competitive for highly-skilled, mobile investment projects,” the Taoiseach said.
Mr Kenny said that next year the marginal rate of tax on earnings below €70,000 would be cut from 52pc to 51pc.
“In the Budget next October, we will reduce the rate of tax on middle-income workers to at most 50pc, and will reduce the rate of income tax further in subsequent budgets if re-elected,” he said.
The Taoiseach said the Government had aimed to create 100,000 jobs by end 2015 but had created 80,000 by the end of last September and would exceed the target.
Mr Kenny also said that he wrote to US President Barack Obama to welcome his reforms to help undocumented migrants in that country.
Speaking at another function last night the Taoiseach also firmly ruled out a general election in 2015 as has been widely speculated. Mr Kenny said the Government would run its full course into the spring of 2016.
The Taoiseach also hit back at his former cabinet colleague Ivan Yates in response to searing criticisms of his leadership.
In a terse response Mr Kenny said: “Ivan’s a mercenary. He’s been very wrong in the past.”
Writing in the Irish Independent, Mr Yates strongly suggested that Fine Gael should consider changing party leader if they are to overcome the serious political difficulties they find themselves in after the prolonged water charge debacle.
The Newstalk radio presenter and Irish Independent columnist warned Fine Gael would have serious difficulty winning the next election.
“The presumption that Enda Kenny must lead Fine Gael is not open to question – it should be,” he wrote.
He also questioned Fine Gael’s expected upcoming general election strategy of presenting themselves as the people “who sorted out the mess”.
This message could be directed against Fianna Fail, who created the previous mess, or Sinn Fein and leftist groups which would only create a new economic mess. In a direct attack on Mr Kenny’s leadership he wrote: “Increasingly, Enda Kenny resembles a manager who has run out of ideas. He may also be running out of time.”
When asked for his reaction Finance Minister Michael Noonan laughed and said: “Sure, if I had to comment on what every journalist says every morning in the newspapers, and all day long in the media, I’d do nothing else.”
Another minister, who did not wish to be named, said Mr Yates was not held in high regard in Fine Gael these days. “His comments are excessively populist and all to do with him,” the Fine Gael minister said.
Last night, Health Minister Leo Varadkar accepted the party’s support had dropped but said it was “not about personalities”.
“I actually don’t think it’s because of the Taoiseach. I think it’s because of water charges and other issues that have occurred over the last year.
“What we all need to do now in government is focus on the priorities, focus on reforming our public services and improving the standard of living.
“It’s really not about personalities,” he said.