Michael Noonan (Limerick East, Fine Gael)

The income tax adjustments are equally puzzling. The Minister stated he would cut the tax credit by 10%, which is fairly obvious, although the universal social charge is still a mystery. This charge, as those with a long memory recall, comes from an announcement last year by the Minister that he intended to put the health levy, PRSI and the income levy together. When questioned in the budget debates, if I recall correctly, the Minister said the tax neutral position for this charge would be 7.5%. It would be tax neutral in that it would collect the same amount of revenue but have a distributional effect; it would be harder on poorer people and less onerous on wealthy people.

When I prepared the alternative budget proposals in the past few weeks, which were announced on Friday, we ran the proposals by the Department of Finance, which did an independent costing.

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