Enda Kenny (Mayo, Fine Gael) | Oireachtas source

We signalled very clearly that the mandate given to Government was to fix our finances and get our country working. As far back as early summer, we indicated that the priority in respect of tax was to deal with the crushing burden of 52% imposed on workers through a combination of dealing with the tax band, the USC and PRSI. Deputy Martin asked me if it is fair. It is very fair to say that Government set out with the specific objective of reducing that burden so that the tax changes being made over the next three years will result in approximately 15,000 extra jobs being created over and above what might normally come from growth. That is very different from the 52% tax burden imposed by Deputy Martin's own Government which made the country uncompetitive, unattractive and not fair in the sense of the proportion of tax people had to pay. Deputy Martin's Government did this while borrowing to go to €15 billion with rising interest rates and at a time of out of control emigration and unemployment falling off the cliff. What we have said is that the changes in the tax system - the reduction in the rate and the increase in the band - are designed to create 15,000 extra jobs over three years. The path out of unemployment and poverty is job creation. This is the start of a three year programme of tax changes designed to do that. It is an entirely different matter from the perception that is being put abroad that tax changes are in some way related to the issue of the provision of Irish Water and water for businesses and consumers.

We said very early on that we needed to change the tax system to reduce the burden of tax on people. We have taken serious numbers - 80,000 - out of USC at the lower level. For those who still have a tax liability, there is a reduction in the USC at the two lower levels. In the first budget the Minister for Finance, Deputy Noonan, brought in, 330,000 were people taken out of USC altogether. The increase in the tax band will take many thousands more out of the higher rate of tax liability altogether. Beyond €70,000, it has been between €30,000 and €70,000 that has been the area where people have had to pay all of the sacrifices, all of the charges and it is there that the priority impact of the budget has been. The tax changes are the first of three years to bring about a reduction in the rate of tax and other adjustments that will create 15,000 jobs over and above anything that occurs in the normal way.

See this speech in context