Michael Noonan defends 0.5% USC cut

Finance Minister Michael Noonan has defended suggestions the worst off in society may benefit by just €2 a week under budget USC reforms, as a Fine Gael colleague said councillors are in line for a €1,000 pay rise.

Mr Noonan outlined the position at the latest Fine Gael parliamentary party last night, during which he also definitively ruled out mooted tax plans to entice emigrants home.

In a short budget presentation to TDs, senators and councillors, Mr Noonan repeated the fact Government will have €1bn for tax cuts and spending rises next year.

While not giving exact details on how the money will be broken down, he confirmed USC cuts for the lowest two rates are likely.

Mr Noonan addressed criticism that a 0.5% cut to the lowest USC rate would result in some of the worst off people in society only receiving an extra €2 a week.

He said while the sum sounded small, it will take up a significant part of the €340m in tax cuts available, and added it is not unfair for people to still pay a small amount of USC.

Mr Noonan also clearly shot down Jobs Minister Mary Mitchell O’Connor’s 30% tax rate for returning emigrants on €75,000 or more a year suggestion, mirroring similar Dáil remarks from Taoiseach Enda Kenny.

The position was widely backed by Fine TDs, with one joking afterwards it had been “put on a plane and flown one way”, and another simply saying: “It’s dead, it’s gone. Hallelujah, hallelujah.”

The meeting did not see any questions over Mr Kenny’s leadership after two critical reports were released about Fine Gael’s election performance.

Meanwhile, it emerged last night that despite tight budget spending restrictions, councillors are set to receive a €1,000 pay increase outside of the budget plans.

Local Government Minister Simon Coveney is believed to have told a meeting of senators the move is likely, which will see councillors’ pay increase to €17,565 in addition to their other employment.

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