Minister for Public Expenditure and Reform Brendan Howlin has insisted the Government is acutely aware of the economic pressure on families and the impact of additional taxation.

“The Government’s job is to maintain basic services, which we are doing by borrowing over €1 billion per month, notwithstanding the additional burden in taxation which has been placed on people.” He was responding to Sinn Féin deputy leader Mary Lou McDonald, who asked how people would be able to pay the property tax in the light of the survey by the Irish League of Credit Unions revealing 1.6 million people were left with €50 or less to spend at the end of each month.

“The survey reflects that since last October an additional 230,000 people had fallen into this bracket,” she added. “This is a direct result of the Government’s austerity policies and its most recent austerity budget.”

Mr Howlin said the objective of broadening the tax base was to be in tandem with every other progressive country with a social democratic view of how taxation should be levied. “We want to avoid levying taxes exclusively on labour and work.”

He said a recent Central Statistics Office survey showed savings had increased in the last quarter of 2012 to 16 per cent. The normal level of savings in a functioning economy was in the order of 7 per cent.

Struggling

Ms McDonald said the Minister lived in a bubble if he was unaware of the extent to which households were struggling and the survey was accurately reflecting that reality.

Mr Howlin said he was not casting doubts on the survey which he was sure was genuine and clear. “Savings increased in the last quarter of last year by over €1 billion,” he said.

The Government’s ambition was clear. “We need to work over time towards a balanced budget, which we are doing,” he said. “That means squeezing expenditure as best we can while maintaining public services.”

He said a stimulus plan for jobs was needed to create an environment in which people under pressure and the unemployed could find work.