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Ireland's Kenny Defends Budget Policies

by Jason Gorringe,, London

10 December 2014

Enda Kenny has defended his Government's economic record and stressed that "people will start to see a bit more in their pay packet as the first tax cuts come into play."

The Irish Prime Minister was speaking during a December 9 parliamentary debate on a motion of confidence in his Coalition administration. The motion was introduced by Kenny after opposition party Sinn Féin moved a motion of no confidence last week. The Government won the vote on Kenny's motion by 86 to 55.

Kenny pointed out that Ireland has the fastest-growing economy in Europe, and that its "crushing deficit is down and will be eliminated completely by 2018." More than 80,000 new jobs have been created, "personal taxes are down and people will benefit further from other tax restructuring in the forthcoming Budgets," he added.

Deputy Prime Minister and Labour leader Joan Burton also highlighted the Government's achievements on tax. She said that the "highly progressive adjustments" introduced in Budget 2015 will "give the greatest proportion of the gains to low- and middle-income workers," and ensure that "they share in the recovery."

Earlier this week, Kenny and his Fine Gael party launched a new online tax calculator which allows everyone who pays income tax or the Universal Social Charge (USC) to see how they will benefit from the Budget 2015 tax cuts.

Kenny said: "Before the recent Budget someone on EUR32,800 (USD40,503) entered the 52 percent [marginal tax] rate. That is simply not fair. High rates of personal tax make it much harder to create jobs and to attract people back into work. This is why in Budget 2015 we took the first small step to fix this."

He added: "Our strategy will result in all taxpaying workers and self-employed people paying less next year. We believe our tax cuts, when repeated again in 2016 and 2017, will create another 15,000 jobs in Ireland."

Opposition party Fianna Fáil this week unveiled details of its plans to reform the income tax system. According to Finance spokesperson Michael McGrath, there is a need to recognize the importance of the ability to pay, reform and reduce the burden of the USC, address the "unfair" treatment of the self-employed, and increase tax credits.

TAGS: Finance | Budgets | tax | Ireland | tax incentives | tax credits | tax rates | social security | tax reform | individual income tax | Europe

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