THE Tanaiste, Mr Spring has given a strong indication that the expected tax cuts in the Budget will favour middle income families, rather than high earners.
"In common with all my colleagues in Government, I am determined to ensure that, this year, PAYE workers and their families will see a direct return," Mr Spring told a Leinster Society of Chartered Accountants lunch in Dublin.
"Families are not going to be better if we steer tax reliefs towards the higher income sectors, and pay for them by cutting services that are essential to our community as a whole," he added.
Mr Spring said PAYE workers had played a large, many would say disproportionate" part in putting the economy on a strong footing. Every family in the PAYE net should be able to "see a tangible improvement in their standard of living as a result of the improved state of the nation's finances", the Tanaiste added.
Those who argue that it is easy and painless to reduce public spending even further must accept the obligation, to "spell out in detail just what services they would cut", according to Mr Spring. "Ease solutions to issues are almost always bogus solutions," he added.
Mr Spring's comments come as the three coalition partners begin the complex negotiations aimed at formulating the Budget. The Government Departments submitted their initial estimates for spending next year to the Department of Finance in recent weeks, and it is understood that almost all estimates are above the targets set by the Minister for Finance Mr Quinn.
The two Departments which have exceeded the targets by the greatest margin are understood to be Agriculture, which has additional costs relating to the impact of the BSE crisis, and Justice, which has to pay for the new anti crime package agreed after the murder of journalist Veronica Guerin.
Mr Quinn will emphasise to his colleagues that the greater the increase in spending agreed for next year, the less will be available for tax cuts. The coalition partners must also agree on where to direct the tax reductions, with close attention being paid by advisers on identifying measures which would benefit families in the £12,000 to £18,000 income bracket. A Fine Gael tax committee has called for deductions in both the top and standard income tax rates, but Mr Spring's speech may signal Labour resistance to the idea of reducing the top 48 per cent rate.
Mr Spring said the economy had made great strides in recent years as Irish GDP growth has exceeded the European average by a factor of three since 1990. One in every 10 jobs created in the EU last years was created in the Republic, he added.
But Mr Spring noted that unemployment remained "stubbornly high".
He acknowledged that membership the single currency - and particularly the transition to it - out some pain" but added that recent studies had shown that, overall, Ireland from EMU.
