Enda Kenny dismisses IMF concerns over cutting taxes

Enda Kenny has dismissed concerns from the International Monetary Fund about cutting taxes and defended promises to phase out the USC so as to entice home Irish emigrants.

But the Taoiseach at the same time warned that it would be the “biggest failure” if there was debate about spending in the coming weeks ahead of the general election, with the economy still fragile

In an interview with Matt Cooper on Today FM’s Last Word, Mr Kenny said the economic recovery was the key to driving investment in public services such as education and healthcare.

Ahead of his visit to the World Economic Forum in Davos, Switzerland, he said the visit was not about “hobnobbing”, but about meeting people who had a lot of clout and made investments.

“We’ve started on a journey and come quite a distance and I think the biggest mistake that could be made over the next period ahead is to have a political discourse up and down the length of the country about spending the fruits of an economy that is still very fragile.”

“For me and a party going into the general election situation I will be saying to keep that recovery going, that you have strength in the economy to invest in facilities like third-level education.”

Asked to outline his position on whether taxes would be reduced to US-style levels, Mr Kenny said: “We want to bring back 70,000 [people] from abroad, these are young men and young women who for whatever reason are working in other countries.

“Many of those countries have a lower taxation rate than Ireland, so where we need to be in the time ahead is to have a competitive taxation system here. That’s why we want to abolish the Universal Social Charge over the next five budgets.”

Asked about reports on the IMF’s concerns about the coalition’s recent budget and promises to cut USC further, he said: “They’re very much entitled to their opinion, but we have to make decisions here that are prudent and safe in the context of our economy.”

Ahead of the Fine Gael Ard Fheis this weekend, Mr Kenny said that he would not be concentrating on the past achievements at the two-day event in City West, Dublin.

Instead, the focus is expected to be on the years ahead and Fine Gael’s promises for voters, he said.

Meanwhile, government TDs have raised concerns about plans by the Education Minister Jan O’Sullivan to remove the importance of religion in school curriculums.

Speaking at Labour’s weekly parliamentary meeting last night, the minister told TDs that she would remove ‘rule 68’, which in schools stipulates religion is the most important part of a curriculum.

The minister is expected to abolish the rule next Wednesday.But Labour TDs, including Kerry’s Arthur Spring and Dublin’s Brendan Ryan, said this could be divisive in the weeks leading up to the general election.