Taoiseach says tax break for ‘squeezed middle’ Budget priority

Taoiseach Enda Kenny has said easing the tax pressure on the “squeezed middle” will be a priority in the upcoming budget.

Speaking at a jobs announcement in Dundrum this afternoon, Mr Kenny described the 52 per cent tax rate as a "burden".

A priority in the Budget would be “in respect of low and middle income workers, the squeezed middle as they’re called, to begin the reduction of that burden”.

He stressed details had not been finalised but he hoped an “affordable” budget would be produced on October 14th.

“This is not a giveaway budget. This is a budget to solidify and strengthen the progress that we have already made,” he said.

The Government has been advised by the Fiscal Advisory Council, an independent body set up to advise the government, by the European Commission and other bodies to stick to a planned budget involving €2 billion in cuts and extra taxes.

The Commission this week put renewed pressure on the Government to implement the €2 billion budget. It fears the strong exchequer figures in the second quarter may not be sustainable for the remainder of the year and has concerns about the “volatility” of Irish quarterly GDP estimates.

As with all euro zone member states, the Department of Finance must submit its budgetary plan to the European Commission in advance, with the EU's executive arm reserving the right to demand changes.

However, the Government has repeatedly rejected calls for another tough budget. Minister for Public Expenditure and Reform Brendan Howlin has said such an approach would hinder rather than assist growth.