Kenny promises to bring ‘benefit of recovery’ to public

Coalition priorities include reducing income tax burden and tripling housing output

Harry McGee and Fiach Kelly discuss the ins, outs and movings within the cabinet reshuffle.

Fri, Jul 11, 2014, 23:03

The Government has pledged to bring the beneift of economic recovery into people’s lives as it set out an ambitious series of tax, income and housing measures in a “Statement of Priorities” for its remaining 21 months in office.

The 10-page document commits the Government to take as yet unspecified steps in the October budget to reduce the income tax burden on low and middle-income and gradually expand the entitlement to free GP care as the Government moves towards Universal Health Insurance.

As many as 400,000 beneficiaries of the Household Benefits Package wil lreceive an additional €100 per year to help compensate for water charges in Budget 2015 . Such payments, which will be in addition to allowances already made in respect of water charges, will be made in four quarterly installments of €25.

To help execute its plan to triple housing output by 2020, the Government pledged to enact new legislation overhaul the local authority development contributions reime to reduce the burden on new housing development.

In advance of the October budget, the Government will examine a new “Help to Build” funding scheme for “affordable” private sector housing. It will also examine a “New Buy” scheme to ensure availability of adequate, affordable mortgage finance for first-time buyers.

To put downward pressure on variable mortgage interest rates, the Government said it will work with national and European competition authorities “to encourage and support new mortgage lenders into the market.”

The Government also resolved in the document to establish a Low Pay Commission on a statutory basis to make annual recommendations to the Cabinet about the appropriate level of the minimum wage and related matters.

While document also a commitment to introduce a further series of political reforms, the Government also signalled that the referendum on same-sex marriage will take place in the first half of 2015.

The Statement of Priorities was the subject of talks since Monday between Taoiseach Enda Kenny and incoming Tánaiste Joan Burton, who won the Labour leadership election last week. It was endorsed by the new Cabinet when Ministers met at Áras an Úachtaráin for its first meeting after the reshuffle.

The document is predicated on a forecast of 2.1 per cent economic growth cent this year, 2.7 per cent growth in 2015 and 3 per cent growth in 2016. In line with long-standing commitments to Ireland’s European partners, the document reiterates the Government’s promise to bring the budget defict below 3 per cent of economic output next year.

In respect of income tax, the statement said the Government will in the next budget publish a reform plan “to be delivered over a number of budgets to reduce the 52 per cent tax rate on low- and middle-income earners.”

Although no guidance is offered in terms of the targetted reduction or timeframe, the document said the decrease in tax will be introduced “in a manner that maintains the highly progressive nature” of the Irish system.

In relation to health, the document said people over 70 will be the prioritised in the next pghase of the roll-out of free-GP care. Following the introduction of free GP care for children under six this year, the essential aim to introduce free care for overr 70s in 2015, for primary school children aged 6-11 in 2016 and for secondary school chilredn aged 12-17 in 2017.

The document commits the Government to bring in measures in the next budget to improve child income supports so parents “moving from welfare to work will retain payments for children to ensure that people are better off” working.

“We will also increase access to subsidised childcare and after-school places by extending eligibility and rebalancing parental contributions for families making their way into employment.”

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