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Dáil
‹ Leaders’ Questions

Tax and welfare commitments

Summary

Micheál Martin presses the Taoiseach to honour promises not to increase income tax or cut welfare and pension rates. The Taoiseach says the Government will implement its programme while renegotiating tax commitments inherited from the previous government and the troika.

Based on the figures in the four year plan produced last year, the Taoiseach made a number of very clear and specific promises to the people. Before, during and after the general election, he stated there would be no further cuts to welfare rates and pensions and no increases in income tax. The programme for Government states: "The new Government will...maintain the current rates of income tax together with bands and credits." However, the Minister for Finance, Deputy Michael Noonan, stated in early June: "I am not going to rule out any tax initiative or any tax increase or any tax reduction". Seven days later, marking the Government's 100th day in office, the Taoiseach categorically ruled this out by stating there would not be any income tax increase in the budget. The Tánaiste, Deputy Eamon Gilmore, went further and stated the Government would maintain social welfare rates. The Minister for Finance now says the public finances are "better than on track". No more money is available than there was when the Taoiseach specifically promised there would be no more cuts in welfare rates or increases in income tax. When the Taoiseach launched his programme for Government he made a commitment to be open and truthful with the people as we tackle these challenges in the coming years. Is the Taoiseach in a position today to give a clear commitment that there will be no cuts in the rates of social welfare or pensions, and no increases in income tax next year?

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Enda Kenny The Taoiseach Fine Gael

Deputy Martin was not very full in his contribution. In his remarks about what the Minister for Finance said, the Deputy conveniently forgot to say that in the same sentence the Minister also referred to what is stated very clearly in the programme for Government, namely, that it is the intention of the Government to implement the programme.

The Deputy's Government committed via the memorandum of understanding, MOU, to an extra €215 million in income tax for each of the coming three years. This must be renegotiated with the troika by the Ministers for Finance and Public Expenditure and Reform in the same way as a number of other matters have already been renegotiated to the advantage of taxpayers and the people in general.

This is the programme for Government. The Minister for Finance referred Deputy Martin to the programme for Government in the contribution to which the latter alluded. It is our intention to implement the programme in full. From that point of view and in the context of income tax, this matter must be renegotiated with the troika as a result of the commitment to come up with €250 million for each of the next three years. The Minister for Social Protection has, on a number of occasions, referred to the Government's interest in keeping headline rates for social welfare intact. She has also made it perfectly clear that in cases where recipients of social welfare payments who refuse adequate and appropriate offers of retraining, upskilling or employment, their rates of payment can be reduced. The latter has already occurred and everyone who is unfortunate enough to be unemployed is aware of the position in this regard.

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The Taoiseach was well aware of the four year plan relating to the EU-IMF agreement when he made his specific commitment. That has nothing to do with it. The EU and the IMF are fundamentally concerned about the global or bottom-line figures. Since he entered office, the Taoiseach has been trumpeting his capacity to make choices and change certain aspects of the agreement. His response is noteworthy by the lack of clarity and by the absence of a commitment in respect of the specific points I raised.

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That is like Fianna Fáil's strategy for the presidential election.

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What we are doing is as plain as a pikestaff.

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Is the Taoiseach going to maintain the commitment to the effect that the Government will not cut social welfare rates? Is the Taoiseach holding to the very specific commitment he made that the Government will not increase income tax? These are commitments the Taoiseach made.

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A Deputy

Where has Deputy Ó Cuív gone?

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It was he and no one else who gave those solemn commitments in full knowledge of all the facts. He also gave commitments in respect of third level fees, special needs education, child benefit, pensions and a range of other issues in full knowledge of what was expected under the four year plan and the agreement with the EU and the IMF. The Minister for Social Protection, Deputy Burton, did not give the commitments the Taoiseach outlined in any of the statements she has made.

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Enda Kenny The Taoiseach Fine Gael

Obviously, Deputy Martin was not too clued in when he and his colleagues signed on for a number of things while in power. I refer to the guarantee relating to the banks and the previous Government signing on to commit the Irish taxpayer to a further €250 million in income tax payments every year for the next three years.

Comment on this
Enda Kenny The Taoiseach Fine Gael

The previous Government also signed on with regard to a matter in respect of which the Ministers for Finance and Public Expenditure and Reform and I, as Head of Government, have been involved in trying to renegotiate. As a result of what we have done, it is clear that there will be a saving of significant proportion to the Irish people of the order of €900 million per year.

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That has nothing to do with this matter. What is the Government going to do——

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Enda Kenny The Taoiseach Fine Gael

That for which the previous Government, in its panic and desperation, signed on——

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The Taoiseach should answer the question I asked.

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We are cleaning up the mess the Deputy and his party left behind.

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Enda Kenny The Taoiseach Fine Gael

——now forms part of our work in the context of the matters in respect of which we must renegotiate. One aspect of what we are doing is renegotiating the element relating to income tax to which the Deputy's party signed up when in government.

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The Taoiseach knew about that before he entered office. He should answer the question I asked.

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Deputy Martin should answer the question. How did the commitment in question come into existence?

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Enda Kenny The Taoiseach Fine Gael

The Fine Gael and Labour parties have a programme for Government and it is our intention to implement it in full.

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A further lack of clarity from the Taoiseach. Another broken promise.

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There is no clarity from those on the Fianna Fáil benches, that is for sure. It was they who got us into this position.

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Deputy Buttimer should continue to canvass on behalf of Mr. Pat Cox.

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Una duce, una voce. Bring back Charlie.

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Seán Barrett An Ceann Comhairle Fine Gael

I thank Deputy Buttimer. The usual suspects are making noise again.

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If we could have una voce that would be helpful.

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Where is the Government, Deputy Buttimer?

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Where is Deputy Finian McGrath's part of the Opposition?

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