As published on: irishexaminer.com, Thursday 29 June, 2023.
The Taoiseach has insisted that the Government will introduce tax cuts in the upcoming budget, despite warnings from the Economic and Social Research Institute (ESRI).
Mr Varadkar said the Government expects pay rises for the public between 4% and 5% on average in 2023 and “if we don’t have a tax package, people lose half of that in PRSI and USC and income tax, and that’s not fair.”
“There will be tax cuts in the forthcoming budget.
"The way I see it, what we do, which is index tax credits, tax bands, isn't really a tax cut. It's just increasing credits and bands so that people don't end up paying more tax,” he said.
Mr Varadkar was responding to the ERSI, which stated there is “no rationale” for tax cuts in the forthcoming budget. The Taoiseach added that the income tax reductions will form part of the budget with a welfare package, alongside increases to weekly payments to carers, single parents, and people with disabilities.
“And if we don't do those things people will get worse off on real terms. And I don't think that would be fair, particularly at a time when the economy is growing and public finances are in a good position,” he said.
Speaking at an EU Council Summit in Brussels, Mr Varadkar said Ireland had no intention of agreeing to a mutual defence clause with Ukraine where discussions to provide the war-torn country with security commitments are taking place.
“Ireland is a neutral country. We’re not a member of NATO, we haven’t signed up to any mutual defence clauses and we don’t intend to do so,” Mr Varadkar said.
The summit of leaders, which continues today, is focused on the bloc’s economy, rising levels of migration to the European Union, and continued support to Ukraine to defend against the Russian invasion.
On Thursday, EU leaders agreed on "future security commitments to Ukraine" in a pledge of long-term support, without giving further details.
Ahead of the summit, the open-ended language of the term “security commitments” caused concern for military-neutral members Ireland, Austria and Malta.
However, neutral members secured a reference in the pledge that "these commitments will be taken in full respect of the security and defence policy of certain member states and taking into account the security and defence interests of all member states".
Mr Varadkar said Ireland as an EU member could offer Ukraine political and financial support but a mutal defence commitment would be a "breach of our policy of neutrality".