Tax changes in budget to ease burden on ‘middle Ireland’

Minister for Agriculture and Defence Simon Coveney has said the forthcoming budget will help "middle Ireland", particularly the cohort he described as "my generation", which is struggling with debt and negative equity.

Mr Coveney (41) said the Government had blundered over the last six months but would demonstrate a fresh agenda-setting energy ahead of the October budget.

“We recognise that it is actually middle Ireland here – my generation – who have lots of debt that they’re still trying to manage and cope with, who are living in many cases in negative equity,” he said. “They are struggling to pay the bills . . . they’re the people that need a break now.”

New direction

Mr Coveney said he expected middle- and low-income families would welcome tax changes in budget 2015 and 2016. “We can only do a limited amount in this budget because the numbers are very tight. But certainly I hope we will be able to start the process of improving people’s take-home pay by using the tax system to do that,” he said.

“Whether that’s through tax credits or through [the] Universal Social Charge, whether it’s through the bands or the rates, let’s wait and see. That’ll be debated hotly over the summer.”

He said the tax changes in October would be “relatively modest”, but the budget was about “signalling a new direction for Ireland” and the changes would be built on in the following year’s budget.

Coalition blunders

“Then we’ll go to the country on the promise of more development and more improvements in terms of services and in terms of a growing economy. And that’ll be the narrative,” he said.

Mr Coveney said the Government had “made some blunders, quite frankly . . . particularly in the last six months, actually, in terms of managing situations poorly”.

The medical cards fiasco, Garda whistleblowers controversy and criticism surrounding the cost of setting up Irish Water were among the situations he mentioned.

Minister for Public Expenditure and Reform Brendan Howlin also told The Irish Times the Coalition had “lost focus” in the early months of this year, which had “unsteadied people’s confidence” in its ability to govern.