THE Irish Small and Medium Enterprises Association (ISME) has said the next Government should cap public expenditure in real terms and freeze public sector pay at its current level to free up resources for tax reform.

"At the end of five years of boom the average income earner in the private sector is better off to the tune of just 83p in nominal tax take per week," it says.

The group says that despite the "soaring tax revenues projected to last beyond the year 2000", the net gain from the various political tax packages on offer is at most £1.75 per week during the period of Partnership 2000. "The difference in the tax reform between all parties is just an extra 60p per week in the wages of the average income earner."

It said the wealth generated over the past nine years had been hijacked by the public sector.