Changing the tax bands to increase the level at which the higher rate of income tax is paid is one of the ways to ease the burden on people, Minister for Finance Michael Noonan has said.

Mr Noonan and Minister for Public Expenditure Brendan Howlin both said altering the bands provided one way to cut taxes, particularly on single people.

Both Ministers were speaking after a press conference to mark the State’s exit from the EU-IMF bailout, and Mr Noonan said reducing taxes would only be done as a policy measure to increase growth and job.

However, he said people earning average wages should not be paying the higher rate.

“That’s a very low level for a higher rate of tax,” he said.

At the moment, the higher rate of 41 per cent is applied to earnings of more than €32,800. Mr Howlin said the Labour Party was also concerned about this.

Mr Noonan also said the country’s debt burden could be brought down to a more sustainable level even without retrospective recapitalisation of the banks.

Mr Noonan’s comments mark a shift from the previous government position that some relief must be given for taxpayers’ money used to support the banking system.

Retrospective funding
Irish debt is expected to peak at 124 per cent of GDP this year, and while Mr Noonan said he will still push for retrospective funding from the European Stability Mechanism (ESM), his latest comments mark a shift in position.

“The average European debt is 94 per cent of GDP,” said Mr Noonan.

“So without any retrospective or retroactive recapitalisation of the banks we think we can get the debt down very significantly and in my view it is entirely sustainable.”

Mr Noonan said other factors that will help bring down the debt include: the sale of the State’s shareholding in the banks; the extension of maturities on some loans; the promissory note deal; and running structural surpluses, which are budget surpluses before debt or interest repayments are made.

“So yes we are pursuing it but it is not the only method we have of making the debt more sustainable,” Mr Noonan said of retrospective recapitalisation.

Mr Howlin said the Government was not ready to start giving out “largesse” just yet in regards to increased public spending but said equity and fairness will underscore the Coalition’s post-bailout approach.

“Both parties in Government have made it clear that a lot of additional burden has been placed on hard-working families,” said Mr Howlin.

Both Ministers said the exit from the bailout is not the end of the recovery process but a significant milestone on the road to recovery.

'Fine opportunity'
The Labour Party's youth wing said yesterday Ireland's exit from the bailout was a "fine opportunity" for Labour to increase pressure in Government for the implementation of its social renewal policies.

“We need to remember that Fine Gael didn’t win an overall majority and that Fine Gael needs Labour in Government,” said Labour Youth chairman Ciarán Garrett.

He was speaking outside Leinster House at the launch of the youth wing's campaign to lobby its own party to "ensure that post-bailout Ireland is about Labour's policies to foster social renewal and not more Fine Gael austerity".

It was time for the party in Government to get key commitments such as collective bargaining and a proper, progressive wealth tax implemented, he said.

The bailout “really does present us with that opportunity as the troika leave and the Government has more flexibility on economic matters”.

The Beyond the Bailout Campaign has four key elements: implementation of collective bargaining and of a wealth tax; ending of zero-hour contracts; and the introduction of a living wage.