2014 Budget must signal end to austerity, IBEC claims

2014 Budget must signal end to austerity, IBEC claims

Business group IBEC has called on Government to use the budget as a signal that the end of austerity is in sight.

In its pre-budget submission, it also urged the Cabinet to drop €500m of planned tax hikes and introduce new measures to rebuild consumer confidence, support job creation and encourage spending in the domestic economy.

Ibec chief executive Danny McCoy said the economy and Irish workers are taxed enough.

“The focus should be on ways to reduce the tax burden,” he said.

“The remaining adjustment should be made by growing the economy and reducing public expenditure. We continue to spend more than we can afford. ”

The Government will announce spending cuts and tax adjustments to the tune of €3.1bn for the 2014 budget on October 15

Taoiseach Enda Kenny has previously guaranteed there will be no hike in income tax in the next budget as promised as part of the Programme for Government.

But figures released last month showed Ireland officially dipped back in to recession after the Government’s export-led recovery took a hammering.

Mr McCoy warned that despite progress, the recovery remains fragile.

“To protect and help create new jobs, employment costs should not rise,” he added.

“Any attempt to push sick pay costs onto employers or further increase health insurance premiums must be resisted. Additional costs will push already struggling firms out of business and fuel the unemployment crisis.

“We need an ambitious growth strategy and a tax system that supports investment and activity in the domestic economy.

“The lower VAT rate in the hospitality sector should remain, and the tax code should be reformed to attract more foreign investment and encourage entrepreneurship.”

IBEC added that in recent years the tax burden has risen dramatically and further increases would undermine growth and set back the recovery.

Trade union SIPTU criticised IBEC's call for no tax increases, calling it a "sheep in wolves' clothing."

In a statement, union president Jack O'Connor said the call was a tactic to support the wealthy and inflict more misery on the less well-off.

The union is, however, joining IBEC in calls for an end to austerity.

It said the government can achieve the 3% deficit target by the end of 2015 without inflicting more misery on the majority of citizens, if the rich contributed more in taxes.

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