The next step is to transform a recovered economy into a decent society

08 February 2016

 

Speaking at the launch of ‘A Strong Economy for a Decent Society’ this morning

This election is about the future of our country.

 

A future rescued from the scrap heap it was left in by Fianna Fail five years ago.

 

A disastrous situation which would only have been made worse if the policy prescription of Sinn Fein to tell our only funders to take a hike had been listened to.

 

The same party that voted for the bank guarantee.

 

But thankfully we are a long way away from the position Fianna Fáil left us in.

 

Ireland is the fastest growing economy in the EU for the second year in succession.

 

Unemployment is coming down rapidly.

 

A balanced budget by this year. 2016.  My prediction.

 

5 years ago it was 32% of GDP.

 

Labour is proud of the road we have played in turning Ireland around.

 

Labour, alongside Fine Gael is offering to take the next steps on the recovery path.

 

The next step is to transform a recovered economy into a decent society.

 

As Minister for Public Expenditure and Reform I know, better than most the pressures that are build up over the difficult years in the public services.

 

Pressures we can now begin to relieve.

 

So what’s Labour’s plan.

 

We intend to deploy €11.2bn over the next five years split on a three to one ratio between public services and tax reductions.  €8.4bn (8.368) and €2.9bn. (2.866).

 

That’s €3bn for our health services.

 

Over €2bn for education.

 

And €1.7bn for Social protection increases like the old age pension.

 

The other legacy issue is tax reform.

 

The USC is an onerous tax on people on low to middle incomes.

 

It is a burden on workers.

 

That is why Labour will seek to spend the remaining quarter of resources in our plan to abolish USC on incomes of up to €72,000.

 

Freezing the benefit on incomes between that level and €100,000.

 

And begin to claw back the benefit for those over €100,000 so that at €120,000 there will be no benefit.

 

For low paid workers we will extend PRSI relief for workers between €18,000 and €36,000 to increase their take home page

 

The other tax proposals we have is to continue to increase the tax credit for the self-employed so that pay the same tax rates as other employees.

 

We will increase CGT entrepreneur relief to 15% and increase the lifetime limit to €10m.

 

Our plan will be funded by available resources of €10.1bn and €1.1bn worth of revenue raising measures – an increase in the bank levy, a sugar tax and tobacco duties.

 

All of these are, of course, five year numbers.

 

Individual decisions will have to be taken on an annual basis.

 

Adhering to the fiscal rules is an annual exercise too.

 

Let me say a few words about those resources.

 

Labour is sticking to the numbers published on Budget Day by the Department of Finance.

 

We are unapologetically proposing to utilise the new agreed definition of the MTO which the Department of Finance has informed all parties of.

 

It is a useful exercise that parties match their spending plans to an authorised view of what might be available.

 

But it is not an exact science.

 

A five year economic forecast is, by definition, just that, a forecast.

 

I did not, for example, believe we could be where we are today five years ago when I became Minister.

 

And for all the downside speculation about available resources the only concrete data we have to date is the opposite – it is positive.

 

Budget Day forecasts for economic growth both this year and last year look conservative.

 

That would reduce the debt burden further.

 

Tax returns bear out the good news story.

 

€1bn ahead by the end of last year.

 

Ahead again in January.

 

This country can look forward to the future with confidence.

 

But not with complacency.

 

You have in place a proven team.

 

Labour is at the heart of it and it would be reckless to gamble on the flaky alternatives.

 

 

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