We will use the fruits of growth to put money in workers’ pockets
Speaking as Labour outlined proposals to increase take-home pay for low and middle income workers
The next government will have two main tasks.
To sustain the growth in the economy.
And to ensure the benefits of growth are spread widely and well.
If we do succeed in sustaining growth, I’ve made it clear that the Labour Party will use the fruits of growth to improve community services and to put more money in the pockets of workers.
We will do so in the ratio of three to one – €3 of investment in services to every €1 in tax cuts.
Labour has set out in more detail than any other party how we will improve the services which workers and families need.
Brendan Howlin and Ged Nash addressed this issue in detail at yesterday’s press conference.
Today, we are addressing the issue of income tax and PRSI.
We are doing this because we believe it’s important that voters are clear as to how the choice they make next Friday will affect them in their pockets.
Our proposal has three main elements:
- We will eliminate USC on the first €72,000 of individual income. We will do this over a five-year period;
- We will change the PRSI system so as to provide relief for workers earning between €18,000 and €36,000 per annum; and
- We will gradually withdraw the benefit of personal tax credits for those earning more than €100,000 so that high earners (more than €120,000) will pay the same tax as they do now.
I believe our proposals are affordable.
They are realistic.
And they are fair.
Our proposals are different from those of the other parties in that they strike a balance that is both fair and substantial.
Some other parties – Sinn Féin and the Social Democrats – will do little or nothing for workers.
Fianna Fáil, meanwhile, have set out proposals which confer benefits on high earners who are well able to look after themselves.
Only Labour gets the balance right.
Only Labour has set out specific proposals for those earning more than the minimum wage but less than the average wage.
So it’s indisputably true that workers earning between €18,000 and €36,000 per year will be better off with Labour than they would be with any other party.
Only Labour treats high earners fairly.
Sinn Féin would nail them to the wall.
Fianna Fail would waste scarce resources by giving them relief that they do not need.
Last week, Gerry Adams said in an RTE interview that workers on low and middle income would be better off with Sinn Fein than they would be if the present government was re-elected.
This is simply untrue.
It’s untrue because Sinn Féin would do nothing at all for workers earning more than the minimum wage.
So the vast majority of workers would gain absolutely nothing – not a red cent – in their wage packet if Sinn Féin were in government.
Even if we assume that Sinn Féin was to carry out its reckless promise to abolish property tax and water charges, the benefit to taxpayers would be much less than the increase in take-home pay which workers would enjoy under Labour.
To give just one example.
A couple on average pay – let’s say €35,000 each – living in an average house in Gerry Adam’s constituency would gain five times more in tax relief under Labour than they would if Sinn Fein were in Government.
The argument has been made by some commentators that this is not a time for tax relief and that all the fruits of growth should be set against the national debt.
That argument may sound like prudence, but in fact it is the counsel of despair.
I believe strongly in prudence.
I believe it’s important that we reduce the national debt.
And if we are returned to government, we will reduce the debt even more quickly than the European fiscal rules require.
But I will not say to workers that all of the benefits of economic growth should be set against the debt.
I believe it’s reasonable for workers to expect an increase in their take-home pay as the economy recovers.
Employers should pay more as profits rise and the Government should put more money in the pockets of workers by reducing tax as and when we can afford to do so.
My message is clear.
Only Labour will get the balance right.
The balance between tax and spend.
The balance between paying off the national debt and providing tax relief to workers.
The balance between those who are struggling to make ends meet and those who are on high income.
Only Labour can provide a fair government – our offering is radical and responsible.
Only Labour will focus tax cuts on low and middle income families.
Only Labour will invest in the local services that families and communities need.
Only Labour will deliver a modern and progressive Ireland. And only Labour has the record of managing the recovery responsibly and fairly.