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Noonan says income tax cuts are not a play for popularity

The Minister for Finance said once they have the resources, the Irish government will look to cutting income tax.

Michael Noonan at the OECD seminar today.
Michael Noonan at the OECD seminar today.

SPEAKING AT AN OECD seminar this morning, the Minister for Finance Michael Noonan said as soon as the resources are there, the Irish government will look to widen the average band rate of income tax.

At the seminar, entitled “The Euro Area at crossroads,” Noonan addressed the issue of possible income tax cuts in the next budget, which Taoiseach Enda Kenny stated last week.

Speaking to CNBC News at the IBEC conference Convention Centre Dublin, Kenny said he accepts that “income tax levels are too high here”.

Kenny’s comments came after IBEC advised the Government to cut income tax as a means of boosting consumer spending because many employers can not afford wage increases.

Noonan denied today that it was complacent to make such a move, adding that even through difficult times the Irish government were prepared to make tax cuts.

Damaging

He explained that income tax was too high, stating that they were damaging job creation.

“As soon as we have resources will be widen the average rate band of income tax so the people can earn more before hit the higher rate and can do more overtime” before they are also hit. He added that it was “not a process to endear ourselves with the people”.

Noonan said “politics is an art rather than a science” stating that the one thing the Irish government “did well, was bring the people with us, one has to talk to the public all the time”.

He added, however, that everyone in Ireland “is clear” that the government will continue on the path to meet their restructuring targets and corrections as long as they are in power.

However, he said that Ireland was moving at a good pace, stating that market confidence is high, the public finances are “under control” and growth predictions are good. He added that bank confidence has also improved, stating: “So far, so good…”.

He did state however, that the Irish government only sees it as a “job half done”. He said that Irish people are “very committed Europeans” and that we are not “looking to Europe to solve our problems” but that if Ireland’s objectives are achieved it would be good for both Ireland and Europe.

Read: Taoiseach: We’ll consider tax cuts next year, if we can afford it>

Read: IBEC: Income tax reduction needed as employers can’t afford pay increases>

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