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Reckless tax cutting proposals must be dropped – Morgan

7 November, 2007

Speaking ahead of the government's special budget cabinet meeting this Sunday Sinn Féin's Economic Affairs spokesperson Arthur Morgan TD has welcomed Fianna Fáil's growing acceptance that pre election promises to cut PAYE and PRSI were ill conceived and would negatively impact on public services. Deputy Morgan also welcomed the indication that government was finally taking Sinn Féin's lead on personal taxation.

Deputy Morgan said:

"There was broad knowledge across the political and social spectrum in advance of the general election in May of a number of key vulnerabilities in the economy. Chief amongst these was the implication for tax receipts of a widely predicted decline in the construction and property sectors. The Tax Strategy Papers prepared in advance of the last Budget show that there was a clear awareness of this within the Department of Finance.

"Pre-election promises to cut tax were a reckless act by an arrogant and complacent government. Indications in today's media ahead of Sunday's cabinet meeting that the government is beginning to acknowledge that their pre election promises to lower income taxation - in particular to further lower the top rate of income tax - were ill conceived is to be welcomed.

"We call on the government to deliver its commitment to abolish the PRSI ceiling of €48,800. Sinn Féin has long been demanding the abolition of this ceiling which is regressive because in effect it results in higher income earners paying proportionally less PRSI. Delivery of social protections such as maternity benefits, state pensions and redundancy entitlements are dependent on the Social Insurance Fund into which PRSI contributions are paid. This fund is not adequate to cope with the depletion of its revenue that would result from irresponsible cuts in PRSI.

"Sinn Féin argued consistently and with great emphasis in the run up to the election that the Government could not with the slow down in economic growth and the developments in property and construction, afford to cut taxes and maintain, let alone improve, public services. Our personal taxation analysis has been shown to be correct and at last the Government appears to be taking our lead." CRÍOCH

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