McCreevy Refuses To Rule Out Tax Hikes To Pay For Benchmarking

by Robert Lee, Tax-News.com, London

27 February 2003

Irish Finance Minister, Charlie McCreevy has refused to rule out the possibility of tax increases in order to finance the forthcoming public sector pay deal, according to reports in the national media.

Speaking to the Dail on Tuesday, Mr McCreevy argued that suggestions that taxes will automatically rise to cover the 9% pay increase for the Republic's 260,000 public sector workers are highly speculative at this stage in the proceedings.

However, according to the Irish Examiner, he also told politicians that: 'the question of how to pay for these increases in the new social partnership deal depended on resources available to the government.' This lack of concrete detail on the 1 billion euro pay deal was strongly criticised by Fine Gael's finance spokesman, Richard Bruton.

The Examiner report also revealed that, according to a report compiled by Goodbody Stockbrokers, taxpayers in Ireland may need to fork out over 3 billion euro over the next four years to meet total pay increases for civil servants.

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