Government tax plans to help out 'squeezed middle'
THE Coalition will today lay out the groundwork for a five-year tax plan which will be aimed at the so-called ‘squeezed middle’, as well as tens of thousands of Irish professionals who emigrated during the recession.
Finance Minister Michael Noonan will pledge €1.5bn “wriggle-room” in October’s Budget, which will be split evenly between tax cuts and spending measures.
Workers earning between €35,000-€70,000 will be targeted in the Government’s so-called ‘Spring Statement’, which has effectively shaped into a pitch for re-election.
There will a focus placed on taking 90,000 workers out of the Universal Social Charge (USC) with sources confirming that increasing the entry point from €17,000 to a higher amount is under examination.
While Labour previously dismissed talk of a five-year tax plan, the Spring Statement will outline tax and spending measures that span beyond the General Election.
It will be predicted that the economy will return to a position of growth not seen since 2007.
Ministers will tell the Dail that the country is to experience a period of inward migration in 2017 for the first time since the crash.
Next year will see a balance between outward and inward migration before an expected “rush” of people returning home.
The statement is geared towards convincing tens of thousands of emigrants that they will find employment here, as the Government continues its plans to introduce income tax reductions.
“We are predicting a rush of Irish emigrants returning home. It is of enormous importance to the Irish psyche and to confidence,” said a senior Government source.
Both Mr Noonan and Public Expenditure Minister Brendan Howlin will deliver separate speeches in the Dail, similar to the process on Budget Day.
Opposition parties and TDs will then be given an opportunity to make their cases.
The Coalition’s economic strategy is based on projected growth of over 4pc this year.
It will be predicted that the target of ‘full employment’ –whereby all the jobs lost in the recession are restored – will be achieved by 2018.
Mr Howlin will announce the beginning of the negotiations with public sector unions over the restoration of pay.
Mr Noonan will hint at measures aimed at avoiding spiralling property prices,
particularly in urban areas.
The Fine Gael minister will also refer to his plans to haul in the banks in a bid to bring about a cut in the variable mortgage rate.