THE RECOMMENDATIONS of the Commission on Taxation report will be implemented in the long term rather than the short term, Taoiseach Brian Cowen has indicated.
Mr Cowen said the immediate issue was the “unsustainable” nature of the public finances. He was responding to a claim in a newspaper yesterday that the report, which was published two weeks ago, would be shelved.
“We do have to recognise that this is about setting out over the coming years. There’s a long-term focus, if you like, to how you would redesign our tax system,” he said.
“So that is an exercise that will, over time, have to be considered and implemented by Government . . . and obviously political decisions and input have to come into that consideration. But I think the immediate issue is clearly that the public finance position is presently unsustainable.”
The Commission on Taxation’s 550-page report had 230 recommendations covering a range of areas. Mr Cowen said the proposed redesign of the tax system would reward enterprise and result in equity, fairness and transparency. He said the system must provide a sustainable level of income to the exchequer for the provision of public and other necessary services. The Taoiseach said Ireland needed to position itself so it could compete when an economic upturn came.
He said rectifying the public finances was an indispensable part of that process. The Government was working “to continue to bring sustainability back to our public finance position”, Mr Cowen said. “It’s a major challenge, one that we intend to confront . . . and get back to forging ahead.”
He said there would be more emphasis on expenditure rather than taxation in the next budget. Two budgets in the course of this fiscal year had seen impositions of personal taxation and pension levies on workers and on taxpayers generally, he said. “At a time when the economy is fragile, we need to be mindful of the impact a raise in the taxation burden on labour will have . . .”
Meanwhile, Fine Gael enterprise spokesman Leo Varadkar TD pointed to comments from Minister for Arts, Sport and Tourism Martin Cullen. “Two days ago Finance Minister Brian Lenihan told us to read his lips: there would be no tax rises. Now Minister Cullen has very publicly said at a meeting attended by influential figures from around the world that he would not tolerate any cutbacks in his own department.”
Mr Varadker said Mr Cowen said no area of Government spending could be exempt from cutbacks. He said the Cabinet was divided about the content of the forthcoming Budget, as well as future fiscal and industrial policy.
