Kenny pledge to lower income taxes if Fine Gael and Labour remain in government after election

Taoiseach Enda Kenny has criticised the approach of the Opposition parties to taxation and repeated a pledge to lower income taxes further if Fine Gael and Labour remain in Government past the next election.

Mr Kenny and Tánaiste Joan Burton denied on Monday there was a rift in the Coalition over tax, amid suggestions of tensions over whether the focus should be on reforming PAYE or the universal social charge.

Mr Kenny said the Coalition was a Government of “great cohesion” and accused those who said otherwise of having “nothing else in mind other than destabilisation”.

Mr Kenny said the Government would reduce the rate of tax on middle-income earners to “at most 50 per cent” in next year’s budget and there would be further reductions “if the people decide to re-elect this Government”.

“The Opposition on the other hand have no tax plans or else want to increase tax on workers to pay for everything,” he said at a Fine Gael press conference in Dublin. “In response to our progressive plans, they can only offer ill-informed sound bites.”

Minister for Finance Michael Noonan said in his budget speech moves to cut the higher 52 per cent rate of tax in 2015 were "the first instalment of a plan" to reduce taxes for low- and middle-income earners.

Fianna Fáil’s Michael McGrath said the Government appeared “determined to repeat the mistakes of this year’s budget in future by focusing tax cuts on the top rate and those on above-average earnings”.

A Sinn Féin spokesman said the party had repeatedly set out its tax proposals in fully costed budget submissions and the Government was in no position to lecture having burdened citizens with water charges and the property tax.

Public information

Asked where things had gone wrong for the Government, given he found himself reminding people of parts of the budget just weeks later, Mr Kenny replied that it was a lesson of politics to keep people informed of what you are doing.

He said there “was so much information available and indeed so much misinformation available that it can be quite confusing” for people at times.

Asked if his announcement was further fuel to talk of a general election, the Taoiseach said there would not be a general election before spring 2016.

Ms Burton denied there was a disagreement between Fine Gael and Labour over tax but said the issue had led to "strong debate and discussion".

The Tánaiste said developments in Budget 2015, where changes to USC rates and entry points as well as a 1 per cent reduction in the higher rate of tax were announced, were “a very good signpost” to the agreement between Fine Gael and Labour on taxation.

She said the “real case for reform” of tax arises in relation to low- and middle-income earners, and creating a tax system that ensured it was “always worth taking a job”.

“I believe that is a view that Fine Gael share,” Ms Burton said. “Fine Gael has chosen to emphasise cuts in the top rate of tax” but there was no doubt the USC was “quite severe in its impact”, she added.