Tax cuts a priority for Government - Taoiseach

Taoiseach Enda Kenny has today described tax cuts as a priority for the Government.

Speaking in Sligo Mr Kenny said that while he could not give guarantees in respect of the budget, if the economy continues to grow and strenghten “any flexibility will be shown to hard pressed people, I meet them every day.”

He described Minister for Communications Pat Rabbitte’s comments about the need to focus on tax cuts, as an endorsement of Minister for Finance Michael Noonan’s position.

Flexibility in the tax system was something Mr Noonan wanted to see in the next two budgets but it depended on the strenght of our economy, he said. The Government would maintain its priority of trying to fix our finances and creating job opportunities, Mr Kenny said.

Earlier today Mr Rabbitte said the Government must refocus on the issues that concern the public six years into the recession.

Mr Rabbitte said the “last couple of months haven’t been good for Government, and there is a need to get a grip”.

He said the cost of borrowing money on the markets was no longer a concern for the public, and the focus of Government should shift to issues such as housing and tax relief for people on modest to middle incomes as the economy improves.

“Six years into this recession people are saying we’ve had enough, we can’t take any more,” he said.

“It is simply not acceptable that people become liable to pay the marginal income tax rate on the average industrial earnings. We can’t sustain that position.”

Speaking on RTÉ Radio, Mr Rabbitte said tax relief was economically justifiable as it would stimulate consumer spending, for which there would be an economic return.

Mr Kenny also told journalists that work on 5,000 new houses had been started last year. “We should be starting 25,000 and this week the Government will unveil its construction strategy,” he said.

There were 1000,000 skilled construction workers on the live register, he said. “We need to get these back to work”. “I recognise that too many people are still unemployed” Mr Kenny said.. The Government’s action plan for jobs was focusing on indigenous industry and start-ups, he said.

His comments follow Tánaiste and Labour Party leader Eamon Gilmore's call yesterday for a substantial "renewal of purpose" for the coalition following the departure of the troika, during his speech at Labour's annual 1916 commemoration in Arbour Hill.

The call came at the end of a week of political turmoil surrounding the resignation of Alan Shatter as minister for justice.