Taoiseach Enda Kenny has said his Government will not back down on tax cuts next year, despite the threat to the economy from Brexit, the US presidential election, and EU divisions.
Mr Kenny said he has no plans to cancel USC cuts, State pension increases, and self-employed tax credit rises when faced with claims the moves could stall Ireland’s economic recovery.
Speaking to reporters as part of a wide-ranging Christmas round-table interview, Mr Kenny said Brexit, Donald Trump’s election as US president, and EU divisions must be addressed in 2017. However, despite calls for a retreat on popular financial moves, he vowed to push ahead with the initiatives and said any external problems will not negate their value.
“No, we’ve set out our Programme for Government,” said Mr Kenny. “We’ve been very focused on continuing to manage the economy carefully and prudently in the public interest.
“That’s why the growth rates projected by the ESRI [show that] while it’s going to be difficult for the next eight or nine years, they will average around 3%. We need to use every opportunity that comes our way; new markets, new countries, trade missions, the potential benefits that may come.”
Under previously flagged plans, USC is to be cut by 0.5% next year in a move that will cost €335m. In addition, the income tax credit rate for the self-employed is due to be almost doubled, while there will also be a €100 rise in the home carer’s tax credit, a cut from 41% to 39% on Dirt tax for savings, and cost of living State pension rises.
Despite the plans being welcomed by most groups, economists including the Irish Fiscal Advisory Council have warned the tax cuts may not be in Ireland’s interests. The Government has said the moves pose no threat to Ireland’s stability, with Mr Kenny saying the economy is projected to grow 3.5% next year.
© Irish Examiner Ltd. All rights reserved