Wednesday 16 January 2019

Andrew Lynch: After tax hike U-turn, how can we believe anything else the Government says?

Whoops, there goes another election promise. In the run-up to February 25, Michael Noonan lobbied for our votes by pledging that he would not increase income tax under any circumstances.

Now that he's safely ensconced in the Department of Finance, it seems that commitment is just a distant memory -- which means that tax hikes are well and truly back on the menu for next December's budget.

It's already being termed the 'Baldy bombshell'. Speaking in the Dail yesterday, Noonan casually declared, "I am not going to rule out any tax initiative or any tax increase... at a level of principle."

This will come as a bit of a shock to the poor innocent souls who took him at his word when he warned during the general election campaign, "If we tax, we lose more jobs."

In other words, the Programme for Government might as well be torn up now or filed under the 'Fiction' section of a second-hand book shop. That document clearly states on page 16 that the new coalition will "maintain the current rates of income tax together with bands and credits".

If this promise no longer applies, then presumably everything else can be thrown out the window as well -- and the Government can finally admit that it got elected on a series of false pretences.

Earlier this week, Noonan warned opposition TDs about the dangers of talking down the economy in his own inimitable style. "If you want to scaremonger and frighten the children and talk about the Boodyman coming down the chimney, go right ahead," he sneered.

Actually, the Finance Minister is doing a pretty good impression of the Boodyman [it's a Limerick thing] himself -- because he sure as hell doesn't look like Santa Claus.

During the election, Fine Gael and Labour constantly argued over the merits of tax increases versus spending cuts. Now it looks as if they've decided to compromise by doing both. "Yes we can," is Enda Kenny's new slogan (haven't we heard that somewhere before?) -- but he rarely bothers to add, "as long as you foot the bill, of course."

The Irish people are not stupid. We know full well that the economy is in rag order and that money to plug that frightening budget deficit has to be raised from somewhere.

We do, however, like our politicians to be honest with us -- and if Noonan really does raid our pay packets in December, he can kiss goodbye to his straight-talking reputation for good.

The Government may well be calculating that since voters are already so punch-drunk from so many u-turns, one more is not going to make much difference. In the first 100 days alone we have seen promises broken on renegotiating our debt, burning bondholders, water charges, university fees and banning corporate donations.

Ministers may plead that they didn't fully understand the scale of our economic crisis before they took office -- but the reality is that they were willing to say almost anything to get votes in an election they were certain to win anyway.

The timing of Noonan's announcement could hardly have been worse. On the same day, ECB president Jean-Claude Trichet dropped a hint that another mortgage rate increase is on the way next month.

When you add in the Government's plans to introduce a new household charge and cut wages for low-paid workers, it's no wonder that so many families feel like they're staring into the abyss -- and one more hike could send them right over the edge.

Michael Noonan has just proved that this Government's promises are worth about as much as Ryan Giggs's wedding vows. No wonder so many voters must be feeling like a quick trip to the divorce courts.

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