Taoiseach: Ireland seeking alternatives to income tax rise

Taoiseach Enda Kenny said today that the Government has put forward alternatives to increases in income tax to the Troika.

Mr Kenny also said that he regretted the manner in which a document given to the European Commission entered the public domain.

The document emerged at a German Parliamentary Committee and included the proposal to increase VAT to 23%.

The Government is committed not to increase income tax in next month's Budget, but there is a commitment in the bailout agreement to raise an extra €250m in income tax.

Speaking at the North-South Ministerial Council meeting in Armagh, Mr Kenny confirmed the Government has been putting forward alternatives to income tax hikes.

“They have looked for alternatives, if the issue of the income tax question is to be re-negotiated, which was signed off as part of the first deal.” he said.

“So I’m not in the blame game here. I regret that these things which are speculative, which are not signed-off on, should be a source of some discussion in other quarters.”

Finance Minister Michael Noonan echoed the Tasoiseach's sentiments.

“It was disappointing,” he said. “When confidential information leaks it is always disappointing.”

“This is another example of how the sovereignty of this state has been handed over,” Sinn Féin president Gerry Adams said.

Fianna Fáil leader Micheál Martin said the disclosures to foreign politicians are unprecedented.

“For the public outside it defies belief and demands explanation from the Government and demands clarification as to what information is going to be put before 40 members of the German parliament in relation to details of the forthcoming Budget,” he said.

The leaks were all the more embarrassing as they occurred as the Taoiseach held talks with Chancellor Angela Merkel.

The document was written by Irish Government officials but it had not been signed off by Mr Noonan or Central Bank Governor Patrick Honohan.

A spokesman for Olli Rehn, European Commissioner for Economic and Monetary Affairs, confirmed officials in Brussels sent the Budget 2012 document to Finance Ministries in all 27 EU states.

“On behalf of the Commission the leaks are regrettable,” said Amadeu Altafaj Tardio.

“But we have a legal obligation to share the information that we receive from the authorities in Dublin with the member states. This is actually our mandate.

“Ireland sees the same information from the Troika about Greece, for example,” he said.

German politicians sitting on a budget committee in the lower house of parliament were given access to the document under strict rules reinforced by the country’s Constitutional Court. The Bundestag rather than the government in Berlin decides whether the country is willing to keep funding bailout packages.

The Commission insisted it did not forward the unsigned, draft budget document to the German parliament.