Fianna Fáil Spokesperson on Public Expenditure and Financial Sector Reform, Michael McGrath TD has called on Government to come clean and spell out who will be asked to foot the bill for the cuts in PRSI and VAT signalled in recent days. He commented, “Ministers Noonan and Howlin have made great headlines with their commitments to openness and honesty, yet refuse to give any indication of how they propose to pay the €1.3 Billion bill raised by the planned reduction in PRSI and VAT in May. They have conceded that the jobs budget will have to be fiscally neutral so the money will have to be found elsewhere.
“The reduction in the lower rate of employer PRSI and the VAT reduction will cost up to €1.3 Billion on their own during the lifetime of the EU / IMF Programme and the Irish people are being given no sense of who will be asked to pick up the bill. This does not include the cost of the other measures which have been promised in the jobs budget including the abolition of the travel tax to name but one. Pointedly, the Government today refused to rule out tax increases as part of the jobs budget even though Enda Kenny, in answer to a question I put to him, indicated that the measures would be funded by spending cuts. Presumably, the Government’s intention is that the measures in the jobs budget will create some buoyancy in the economy which will offset the loss of income, but the costs will remain very substantial and it must be made clear where the lost income will be made up.
“A Dáil debate will take place next week on the EU-IMF programme – it is essential that the coalition make good on rhetoric about transparency and publish the full details of how they propose to fund these changes for the duration of the EU / IMF Programme in advance of that debate.”