Erratic and mistaken tax policy blamed by Bruton

The Government's difficulty in its meeting with the social partners yesterday was caused in no small measure by its mistaken and erratic tax policy, according to the Fine Gael leader, Mr John Bruton. He added that the Government's Budget this year had had a foreseeable effect. It had made the well-off better off and it had done little or nothing for the low-paid.

Too late, the trade union movement expressed its dissent from the Fianna Fail/Progressive Democrats policy.

Now the Government was hinting that it was going in a completely different direction on tax for 1999, Mr Bruton said. It seemed, in effect, to be reversing its manifesto promises and belatedly adopting Fine Gael policy.

"Unless the 1998 tax changes are actually reversed, the 1999 Budget is being framed within a tax structure that is fundamentally more unequal than the tax structure that Fianna Fail and the PDs took over when they came into office in June last year," he said.

He claimed that a government which abandoned its manifesto tax policy because of pressure from trade unions "sends out a signal that it is ready to be pushed on other issues, too".

Describing the Taoiseach's comments as unclear and confusing, the Labour leader, Mr Quinn, said Mr Ahern had suggested that the social partnership might need to change but gave absolutely no indication as to the direction this change should take.

The future of social partnership would depend on how the new resources available within the economy were shared out, he said.

The Government had also abandoned reform within the public service. The effect of this had been to condemn many public servants to work without real prospects of promotion or pay commensurate with their performance.

"If we are to succeed in transforming our public service into one of the best in Europe, the link between productivity and pay is essential," he said.