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The Floating Voter: 'We are just in circumstances that are so difficult at the moment' - Minister for Finance Paschal Donohoe on Budget 2021


Finance Minister Paschal Donohoe has insisted he is still an "advocate" for income tax cuts despite failing to include any significant reductions in the biggest spending budget in the history of the State.

Speaking to Independent.ie's Floating Voter Podcast in association with EY, the minister said he will seek to give hard-pressed taxpayers personal tax cuts when the economy returns to good health.

"I will continue to be an advocate to look at how we can change the point where taxpayers pay the higher rates of income tax and USC," Mr Donohoe said.

"When we get to the point in our economy where we can continue to make progress in relation to that I absolutely will," he added.

The minister said he believes is important that people should earn more if they work hard and put in long hours in their jobs.

However, he said: “We are just in circumstances that are so difficult at the moment and it wasn't the right course of action for the Budget," he said.

Mr Donohoe said if he had cut taxes he would have had to either borrow more money or ditched other spending initiatives aimed at protecting businesses and jobs.

He defended pumping millions into private businesses saying the funding was in recognition of the risk employers take to create jobs for others.

Mr Donohoe said that if a business is failing at the moment it is mostly like because of the Covid-19 pandemic or the Government restrictions imposed to stop the spread of the virus.

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He also said he hoped to get people back to work in offices next year and urged caution against incentivising working from home.

“Before we make a decision about how we change the balance, from a tax point of view, from working from an office or working from home I want us to, if our public health guideline allows us, to get to a place where we have different balance than what we have today,” he said.

“Particularly if you are at the start of your career, the ability to be in a collective environment has a huge affect on the development of your skills, your career, what you can earn, what you can contribute to our economy,” he added.

Meanwhile, EY Head of Tax Kevin McLoughlin told the podcast the Budget had been well received by the business community. “There was bit of forward looking to it and a nod to innovation and a nod to how innovation might play in the future development of the economy in creating jobs,” he said.

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