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Dáil
‹ Ceisteanna—Questions. Oral Answers. - State Revenue Deductions.

Interest burden and national debt

Summary

Kelly argued that the 21.9-pence interest burden made reducing national debt a long-term priority that could create room for tax relief. Colley agreed that interest costs constrain governments, said the borrowing requirement was being reduced and interest’s share of revenue had stopped rising, and blamed the Coalition for unprecedented debt growth; Kelly disputed the implication.

I appreciate that this is too large a subject to thrash out in the context of the question, but would the Minister agree that, in view of the enormous proportion of revenue absorbed in interest payments and State borrowing which he has just confessed to of 21.9 per cent—over one-fifth of all the money collected by the State—a long-term approach to his tax distribution problems would be to aim at scaling down the national debt as fast as possible? Think what the Minister could do with that 21p in the £ if he was able to use it on tax relief.

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Joseph Brennan An Ceann Comhairle Fianna Fáil

Question No. 7.

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I would agree that it limits considerably any Government's room to manoeuvre if an undue proportion of current revenue is taken up in payment of interest on national debt. For that reason the Government are reducing the borrowing requirement as a proportion of GNP. The Deputy is well aware that a great deal of the debt was incurred while he and his colleagues were in Government, but he will be pleased to know that, for the first time since 1975, this year the proportion of revenue going on payments of interest is the same as last year. For each of the other years there was a substantial increase.

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I am not trying to harass the Minister on this, but it might be no harm if he were to emphasise to the people and use whatever means he has to bring home to them the fact that one-fifth of what the State spends——

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Joseph Brennan An Ceann Comhairle Fianna Fáil

This is a statement.

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——is spent to pay interest on what the State owes.

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Joseph Brennan An Ceann Comhairle Fianna Fáil

I am calling Question No. 7. We cannot have a speech.

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If the Minister would be in a position to cut personal income tax by one-third——

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That might be so if I had not inherited the amount of debt that I did.

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The debts of this State have been mounting up since the State was founded.

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I agree, but the rate at which they increased under the Coalition Government was unprecedented and we have nothing to show for it.

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