Policy proposals:A strong emphasis on the reduction of public debt as part of securing Ireland's economic gains is the keynote of Fianna Fáil's economic policy document, launched at a news conference in Dublin yesterday by Taoiseach Bertie Ahern and Minister for Finance Brian Cowen.
Mr Ahern said his party's plan, The Next Steps Forward: Securing Prosperity was based on three firm commitments: a budget surplus each year; a declining government debt burden each year; and a net debt burden of less than 3 per cent of Gross Domestic Product (GDP) by 2012. "Leaving behind a debt-free Ireland, while investing to meet current needs today, will better enable our children to meet their needs in the years ahead. Our parents worked hard for us and built a foundation for prosperity in hard times. We too can leave a legacy by lifting the burden of debt off the shoulders of our children," Mr Ahern said.
Mr Cowen said it was the party's "top priority" to implement the National Development Plan "in full and on time and within budget". If re-elected, Fianna Fáil would "continue to reform our tax system alongside and in support of the National Development Plan".
This would involve the following steps:
1) Index credits and bands to wage increases;
2) Cut the standard rate of income tax by 2 per cent to 18 per cent;
3) Cut the higher rate by 1 per cent to 40;
4) Reform PRSI to make it fair;
5) Abolish the ceiling whereby no PRSI is paid on income over €48,800;
6) Cut full-rate PRSI from 4 per cent to 2 per cent;
7) Cut self-employed PRSI from 3 per cent to 2 per cent;
8) Double the Home Carer Tax Credit from its present level of €770 to €1,540 per year.
He added: "The economic policy document we are publishing today contains more than our tax proposals. It also provides a detailed costing of every item contained in our forthcoming manifesto."
The document "explicitly" set resources aside to fulfil the Government's commitment to spend 0.7 per cent of Gross National Product on overseas development by 2012.
Fianna Fáil intended to reduce Ireland's public debt in net terms from 14.5 per cent to 3 per cent of GDP. "It will be an historic achievement that a quarter of a century after this country was one of the most indebted in the world, we will virtually eliminate the debt in net terms. That is testament to the policies we have pursued in office and will continue to pursue if returned to power. It is also the right thing to do.
"The next generation will not inherit our net debt and their opportunities and choices will be all the better as a direct result of our prudence, responsibility and long-term approach. Lifting the burden of debt from the shoulders of our children is not only the most fiscally-prudent course, it is simply the right thing to do for a generation which will face increased economic competition from across the world. It is important that all our resources are available to meet future challenges.
"The challenges our children face are greater than ever before. They are greater than the ones we faced. We have an increasingly global environment, where competition on costs but most importantly competition for skills and investment are becoming ever more intense.
"In this dynamic, changing globalised marketplace, our children will need greater flexibility than ever before if they are to lead this country forward to even better days. If we can relieve them of the burden of debt we give our children an advantage, we give them a better start, and I am convinced we will give them a brighter future," Mr Cowen said.
