Ahern makes plea for pay deal talks

Taoiseach Bertie Ahern said he hoped social partnership would survive and that the talks could begin shortly.

"There are some difficulties which are well known and I have addressed them already. There is an important meeting today at An Post and there are ongoing contacts at Irish Ferries," he added.

"I hope both those issues can be resolved and I ask people involved to do their utmost. It will help industrial relations overall in the country, as well as social partnership."

He was replying to Labour leader Pat Rabbitte who warned about the breakdown of social partnership, with the talks in abeyance for a new social contract following events at Irish Ferries and elsewhere.

"Is he aware that there is as deep a concern in the trade union movement about the Government's failure to meet commitments on taxation as the concern about displacement and Irish Ferries."

He said that Fine Gael finance spokesman Richard Bruton had established last week that there were 160,000 more workers paying tax at the marginal rate now than when the Government took over in 2002. At that time, the Government had pledged that 80 per cent of people would be paying tax at the standard rate.

"That was essentially incorporated in Sustaining Progress. Although this is the third and last budget under that agreement, the figures have gone back significantly. Some 73 per cent of people were paying at the standard rate in 2002, but now only 67per cent are paying at the standard rate. This has led to a situation where people on average industrial earnings are paying the 42 per cent rate."

Mr Ahern said the Government, in successive budgets, had worked on the tax rates. "We have the lowest level of personal taxation in Europe. We have also tried to deal with the biggest problem in Irish tax policy, namely the tax wedge, so that people on average wages and above would not be drifting into the tax net."

Mr Ahern said he assumed Mr Rabbitte was excluding from his figures the 657,000 people who did not pay any tax at all.

"The last budget removed tens of thousands of people from the tax net. As a result, 657,000 of the 1.9 million income earners last year were exempt from taxes in their earnings. That [is] over 34 per cent of all income earners."