The construction industry said today that there should be no need for tax increases in the forthcoming Budget if control over current spending is re-asserted.
In its pre-budget submission the Construction Industry Federation, (CIF), called on the Government to curb spending in line with the growth rate of the economy.
A ceiling for current spending growth next year should be set no higher than the expected growth in nominal GNP - in the region of 5 or 6 per cent, it recommends.
The CIF advisesMr McCreevythat increasing capital gains tax (CGT) in the current climate would be counter productive and would result in CGT revenues being lower than they would otherwise be.
Increasing VAT would push up inflation and further erode the competitiveness of the economy, the CIF said. It added that the existing 2 per cent insurance levy, which is now collected as general taxation, should be withdrawn given the rising cost of insurance premia.
But the CIF urged that the National Development Programme should be immune from any cutbacks saying itwould be short sighted to cut back spending on the elimination of Ireland's acknowledged deficits in essential infrastructure.