Government expected to announce tax cuts and spending increases today
The Government will today signal €1.5bn in tax cuts and spending increases in its 'Spring Statement'.
In addresses to the Dáil similar to a Budget, Finance Minister Michael Noonan and Public Expenditure Minister Brendan Howlin will outline the broad economic parameters for the next five years.
They will also signal further changes in 2017 and beyond if the current Coalition is re-elected.
The statement is expected to announce plans to bring unemployment below 9% this year and that there will be no rise in corporation tax.
Minister Noonan said that cuts to income tax and the Universal Social Charge will improve living standards every year up to 2020.
He said that the Spring Statement will set out the road for the years ahead - and anyone who pays tax will benefit.
“The lost decade is over now and we’re starting to rebuild the economy,” he said.
“People will see an improvement in their living standards every year from now out to 2020 and we have the resources to do that, to provide better services, but also by cutting income tax and USC rates for middle income and low-income people in particular.”
Minister Howlin is also expected to secure Cabinet approval this morning to begin talks with public-sector unions to reverse pay and pension cuts imposed over the last seven years.
He said that the Coalition has to find a “path” to public pay restoration that doesn't damage the economic recovery.
Negotiations are expected to get underway in mid-May. It has been reported that the final figure for pay rises may be between 2-3%.
Minister Howlin would not be drawn on specific numbers, but he said that any increases must be affordable.
“I haven’t tabled any figures at all,” he said.
“We obviously have to have a path to pay restoration that is sustainable and affordable, that doesn’t undo the really good work we’ve done, both on the reform side and in having sustainable resources to pay for public services.”
Taoiseach Enda Kenny said the statement will be an opportunity for the Government to outline its plans for the future and highlight progress that's been made.
“Well, it’s an opportunity for the two ministers to set out where we want our country to be for the next number of years, the progress that has been made, and how we see the challenge up ahead,” he said.
“So, both Minister Noonan and Minister Howlin will set out that, and obviously both myself and the Tánaiste will speak tomorrow about the situation.”
