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Government defends pay rise for politicians in 2017

Published 12/10/2016

Finance Minister Michael Noonan at RTE Radio Studios to answer the public's questions on Budget 2017 on Today with Sean O'Rourke.
Finance Minister Michael Noonan at RTE Radio Studios to answer the public's questions on Budget 2017 on Today with Sean O'Rourke.

The Government has defended salary hikes for TDs amid Budget 2017 reforms which offered most people five euro extra a week.

Paschal Donohoe, Minister for Public Expenditure and Reform, also suggested pay rises for ministers would be looked at next year but refused to be drawn on the prospect of wage freeze.

"The last thing on my mind at the moment is the welfare and salary of TDs I can assure you," he said.

"I absolutely understand that perception and I'm so keenly aware of the hurt and anxiety that's been caused to so many people after all that we went through."

Mr Donohoe was on RTE Radio's Today with Sean O'Rourke with Finance Minister Michael Noonan to defend the heavily criticised first-time buyers' tax rebate, childcare subsidies, Brexit safeguards and other key initiatives in the budget.

He claimed childcare costs should come down by the level of subsidies being paid direct to registered childminders or creches rather than that money being used to boost wages of staff or improve facilities.

TDs are in line for a pay rise of 2,700 euro next year and again in 2018 while welfare benefits including the dole, pensions and carers' and disability allowance is going up by a fiver, but not before March 1.

Mr Donohoe defended the salary increases for politicians which were agreed as part of pay restoration plans for all public and civil servants.

"Everything is now tied in to how we treat public and civil servants. There's the issue in relation to ministerial salaries that we will revisit because I don't want to be in a situation where people feel in the future that there's any kind of unfairness going on," he said.

Mr Noonan rejected criticism of the budget by the Irish Fiscal Advisory Council which said it was in breach of European rules.

He also defended the first-time buyers' tax rebate - 5% of the price of a newly built home or 20,000 euro up to a 600,000 euro value.

Mr Noonan said it was one of a range of measures to ease the unprecedented housing crisis and was intended to make it worth the while for builders to develop new starter homes.

The minister said it had support from the Central Bank and rejected criticism that it will force up prices for new starter homes.

"You can't say that at present because these houses don't exist, so we don't know where the price will land," Mr Noonan said.

"But as the supply increases in normal economics its downward pressure on prices as there is more choice."

In a statement the Central Bank said the scheme "may influence both demand and supply factors" and that it was within the strict lending rules for mortgages.

"The new tax rebate provides one mechanism by which first-time buyers of new builds can accumulate the deposit required to satisfy the Central Bank's macroprudential mortgage rules," it said.

Mr Noonan also defended planning for Brexit including efforts to deal with the collapse in sterling and the potential for further fluctuations in the value of the currency, including for farmers and exporters.

Press Association

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