Bribing the citizens with their own taxes will not work

In the ten year period, commencing in 2001, the Social Protection budget increased by 266 per cent. The cumulative rate of inflation in that period was a mere 30 per cent.

Are we to attempt a re-run of that come October’s budget? No - we are not.

After seven years of fiscal retrenchment I am fully aware of the desire for some element of relief come the next budget.

It will happen. It is deserved and it is warranted.

It is encouraging to see in the latest RedC poll that 60% of people think that the Government was correct to follow the economic policies it did over the last three years.

I believe that the old politics of attempting to bribe people with their own taxes won’t wash anymore.

We have often, in the past, succumbed to the usual political blandishment of “more services, less tax”. It is simply not possible.

Taking just one example, if we are to maintain our health services we must pay for them. The staff in the health service have taken large pay cuts and are working longer, and more flexibly, for less. There is also fewer staff. Our hospitals rely on our taxpayers to fund their services. We have an aging population. We have, thanks to the recession, less people taking out private health insurance.

We need, and want, these services to be available at our hour of need.

That requires taxation.

While the various new forms of taxation introduced by this Government have come in for criticism from the Opposition, people should remember this. When the property market evaporated the State was left, due to the overreliance of the previous Government on the property sector, with an enormous deficit. Of the approximately €202 billion we were forced to borrow, €64 billion went directly to rescue the banks. The rest had to be borrowed to bridge the enormous deficit left by the actions of the last Government and to maintain basic services.

What we have done is spread the taxation base, through various means, to ensure that the situation will never arise again, to the extent it did.

We have, thanks to the fiscal responsibility of the present Government, brought our spending under control. Our deficit will narrow to three per cent of GDP next year. We will actually have a primary surplus of income over expenditure this year, when the costs of debt servicing are excluded.

Our economy will grow this year at far above the European average. 72,000 jobs have been created since the Action Plan for Jobs was launched in 2012. Ireland had the biggest annual employment growth in both the EU and OECD in 2013.

All the recent positive economic date, and the refinancing of our IMF debt, which the Government achieved last week, translates as an opportunity to afford some measure of relief to hard pressed taxpayers.

Fine Gael members of the Oireachtas, including myself, made our wish for a prudent but fair budget very clear to the Taoiseach and Minister for Finance at our annual think-in last week.

This Government is rebuilding our society and economy on sound foundations and ensuring that we never go back to the boom and bust politics of the last Government.

 

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