Low income earners should benefit most from the recovery – Neville

“It is important that as the economy improves, those on lower incomes see the benefit proportionately more than those on higher incomes” said Dan Neville, Fine Gael TD for Limerick and Party Chairperson while speaking in Dáil Éireann.

“Up until last year the economy was stagnating and that was a major difficulty, but in 2014 we had growth of 4.7% and a similar rate of growth is expected this year.

“Difficult decisions had to be made by Government. To date we know that 90,000 new jobs have been created, and there are plans to create 40,000 more in 2015. This will have a positive impact, but we must strive for full employment for all who want it by 2018.

“One of the worst areas of unemployment is youth unemployment. This must be tackled as we build on the 8% drop in youth unemployment over the past two years due to schemes such as JobsPlus, JobBridge, First Steps and the Action Plan for Jobs.

“The impact of the income tax system on lower earners is also a major issue. For some time the tax system has been seen as a disincentive to work as people factor in the cost of having a job. We need to make sure that work pays and that everyone is better off going out to work rather than remaining in the welfare system.

“Ireland has one of the most progressive tax systems in OECD and the changes introduced in the 2015 budget now mean that the top 1% of earners are paying 20% of all income tax and USC. In contrast, the bottom 76% of income earners will pay only 21% of the income tax and USC.

“Internationally, our tax system is recognised as progressive but why then is there a disincentive to work? We must examine this issue as many other elements have an impact apart from income tax itself. We need an efficient, fair and competitive tax system to ensure growth.

“The most recent budget has made an important start on the middle and low incomes but we must do much more to ensure the process remains progressive. We must continue to reduce the USC and phase it out over time.”