Noonan: Tax hikes possible in budget

Finance Minister Michael Noonan has revealed that the Coalition may hike taxes in next month’s budget to help increase Government spending.

Mr Noonan also privately told Fine Gael TDs yesterday that the Government is looking at overhauling Nama’s role so it can become a type of housing authority.

At the party’s pre-Dáil meeting in Adare, Co Limerick, he spoke about Fine Gael’s election priorities and said the Coalition was planning a cycle of budgets.

“It [economic recovery] has spread widely through the country now — all the cities, Cork, Limerick, Galway and a lot of the hotspots like Kilkenny, Kenmare, and Westport. There’s very strong economic growth.”

Childcare support, the treatment of the self- employed, and reducing personal taxation will be priorities for Fine Gael at the next general election, it was announced.

Mr Noonan said it was still his plan to allocate €750m on tax cuts and the same amount on funding services in the budget. But he indicated for the first time that the figure could increase if further taxation measures are introduced. The minister also strongly hinted that a further hike in duty on tobacco may be on the cards in the budget.

“There can be variations on that [splitting €1.5bn] because under the fiscal rules, if we were to raise taxes, it can increase the space. If we were to collect another €200m in taxes, €1.5bn would become €1.7bn because you can spend receipts of extra taxes.

“But we’re not really minded to do a lot on tax increases. We may raise some taxes, obviously on health grounds. There’s always an interest in raising duty on tobacco. We won’t rule it out completely.”

During a private session with TDs and senators, Mr Noonan said the Coalition parties were considering changing the remit or mission statement of the National Asset Management Agency, so its work with be similar to that of a housing executive.

“It has the tools, land and manpower. Why not?” said a TD. One minister confirmed the plan and said it would help alleviate the housing shortage if Nama had a direct role in the private sector, rather than solely acting as a “bad bank”.

Mr Noonan told reporters that a new model was being considered to alleviate the housing shortage. He said the issue was discussed at the think-in.

“There was quite a strong view that we need a major housing programme,” he said.

There was a need to deliver family homes, private houses, three-bed and four-bed semis and detached units, he said.

Earlier, Taoiseach Enda Kenny ruled out any reductions or changes to water charges if Fine Gael are returned to power.

He said prices would remain fixed until 2019 and that the decision was the right one.

Mr Kenny said he would serve out the full five years as Taoiseach if the Coalition is returned to power.