‘When You Reduce Taxes, You Take In More’

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Taoiseach Enda Kenny on the Today with Seán O’Rourke show this morning

This morning Taoiseach Enda Kenny was interviewed by RTÉ’s Seán O’Rourke.

They discussed, among other things, the reported comment from a key Government strategist that “we will scare the shit out of them in the last 10 days” and the FG/FF will they/won’t they.

They also talked about his election promise to abolish USC, and how both Finance Minister Michael Noonan and junior finance minister Simon Harris missed two days of meetings in Brussels about the global markets.

While discussing Minister Noonan, Mr Kenny wasn’t asked about the report in yesterday’s Irish Examiner about barrister Garry O’Halloran’s claims that Mr Noonan ran away from a meeting to discuss concerns about sex abuse involving children at the Fine Gael Ard Fheis in 1997.

Mr O’Halloran claimed Mr Noonan’s alleged actions prompted him to quit Fine Gael.

From the interview…

Enda Kenny: “I don’t take much notice of polls, I’m always an optimist. General elections are always about a real fight, a real challenge, I’m up for this. Obviously, the challenge for me and for the party, is to explain to people over the next nine days what is on offer here. And what is on offer is a Government of stability with a very clear plan, create the 200,000 jobs, reduce taxes and invest that back for the employment of people and things are around the country that people need: primary care centres, schools and so forth.”

Sean O’Rourke: “OK, we’ll come back to some of those details but Frank Flannery, for instance, said you’re not explaining your case properly. We saw Richard Bruton warning in the Independent today, we could end up like Greece, Leo Varadkar saying ye mightn’t even be the biggest party, warning of instability. It’s all in line with a quote from Government strategist in the [Sunday] Business Post – “we will scare the shit out of them in the last 10 days”. So, Taoiseach, what’s your scare story this morning?”

Kenny: “My story is reality because I’m a realist. Politics is the lifeblood of, elections is the lifeblood of politicians and they’re about choices and this was always going to be a dogfight, it was always going to be a challenge in every constituency, every seat is a battlefield, everybody knows that. Did anybody think that this was going to be a cakewalk or a doddle – maybe some people did. Not from me. So my proposition…”

O’Rourke: “But this slump, the slump?”

Kenny: “My proposition, Seán, is that for the last five years, we were given a mandate, handed a pretty tough card, we’ve moved the country in the right direction, we still have to complete that job. So what I want to say to people all over the country is there’s a proposition on the table here for a clear, stable Government that will deliver on a costed plan, that will create benefits for everybody. I think, I think the weakness that I’ve had in the argument to date is to translate the recovery into what it means in every part of the country in people’s lives. And I can see that beginning to emerge with, the people have come back from Australia, and the Christening was at home, not away, but he said it’s not about monetary value, it’s about emotional reunification…and they’re coming home, Seán.”

O’Rourke: “But at the same time, the papers today are full of these scare stories being put out by your colleagues in Cabinet. Now how much of that is due to the Tory influence? Because we know your people spend time in London, studying their methods…”

Enda Kenny laughs

O’Rourke: “… and they succeeded by warning the people that a vote for Labour was a vote for the Scottish nationals.”

Kenny: “Oh for god’s sake, you study elections all over the world and who does what. I mean people are clued into American television and American elections. Also you’ve had elections in Britain, you’ve had referenda in Britain, and all, people who are interested in politics and these things. Our challenge here is on the 26th, there will be a general election. The people are making a choice, what do they want? My proposition is for a stable Government to that recovery to translate it into benefit for everybody.”

O’Rourke: “Yes, but the difficulty is maybe what really scares people is the idea that you will not do all in your power to give the Irish people a stable government with the results that they give you on the 26th.”

Kenny:I intend to give them every opportunity to have a stable government. That’s why my proposition is for a return of the existing government because in order to have a stable government, obviously, you’ve got to have the numbers but, more importantly, is that you have the plan and the programme and the capacity to implement it.”

O’Rourke: “But the numbers, they’re not pointing that way…”

Kenny: “It’s not just a list of promises, this is a costed plan. Because the more, when you reduce taxes, you take in more. So therefore you create more jobs. All of the parties are talking about spending money in the future. The only way you can have that is to have a process, is to have a programme that you can create the jobs, reduce the level of taxes and the USC abolition is a central feature of that and thereby invest that in…”

Talk over each other

O’Rourke: “Yeah but you’re basic contention seems to be that, you know, you reduce taxes and you take in more. Now what’s that based on? Because maybe this explains why people are not swinging around and supporting you and why there has been a slump because Fine Gael traditionally is associated with prudence, with sound finance, with stability and at the same time you’re offering people and this has more echoes really with the election campaign of 2007, you’re offering them, effectively, tax cuts, you’re offering them extra services and people see, look, this doesn’t really add up.”

Kenny: “Sean, we set out five years ago to create 100,000 jobs. Everybody said you can’t do this, it won’t work, you’ll never achieve it. But that’s what did happen. A central feature of the next programme, to create 200,000 jobs is to abolish the universal social charge because that creates more jobs, when you lessen the range of tax that are there. You then have more coming into the economy from those jobs that you invest in, in employing teachers, primary care centres, doctors, gardai, nurses and so on.”

O’Rourke: “You honestly think we can afford this? Because again, all, well I won’t say all, a lot of very wise economists, varying from the Fiscal Advisory Council to people like Colm McCarthy, are warning you and your colleagues that public debt in Ireland remains at a very high level. It could compromise our access to the markets, given the jitters that are there. It wouldn’t take a whole lot, Karl Whelan is saying that fiscal space, that can change very very quickly.”

Kenny:I love the economists, even Joseph Stiglitz said out to me in Davos, Ireland was the best of the lot. If we moved in a different direction, we’re further down the road than we should be. Still a long journey to compete. But the point is that, in order, to have the 200,000 jobs, a central feature is abolish the USC, you reduce the level of ta-, you create more jobs and reduce the level of taxation paid in those. That’s why we’ve had the 100,000 jobs created…

Later

O’Rourke: “As recently as last week, and again amidst all of this uncertainty, there was a meeting of the Ecofin ministers, the European finance and economic ministers in Brussels, two days, it was to address the global markets meltdown. No Michael Noonan, no Simon Harris. Why?”

Kenny: “I don’t know. Obviously, the issue that was, the issue may have been finalised before anybody attended, I don’t know, I can’t answer that for you. I’ll speak to Michael later on.”

O’Rourke: “This is the kind of thing that you used to remonstrate Fianna Fáil for…”

Talk over each other

Kenny: “I’m going out, I’m going out, I’m going to Brussels on Thursday and Friday to defend the interests of this country and Britain…”

Talk over each other

O’Rourke: “Is it acceptable to you that neither the minister nor the junior minister attends a meeting of that importance?”

Kenny: “I much prefer all ministers to attend all meetings. There must have been a reason for this, I’m sure somebody else…it is true to say that I did remonstrate before with Fianna Fáil for missing numerous meetings over the years. This is not a situation that I like. But I do make the point, I’m going out myself on Thursday and Friday, if you like, to defend the situation that we’re in now here where the proposals for Brexit are being put on the table but the British Prime Minister. I support this very strongly. That Britain should remain a central part of the European Union and I’m going out there to defend our interest and put our case very strongly to the colleagues around the table at the European Council.”

Listen back here

27 thoughts on “‘When You Reduce Taxes, You Take In More’

    1. Barry

      ‘Reduce tax increase tax take’ – Shame he didn’t believe that 5 years ago the big fluffy headed clown.

  1. Mark Kelly

    I have heard this claim from Kenny before during the leaders debate that cutting taxes increases the overall tax take and needless to say it is complete BS. It is Reganomics nonsense that is based on the flawed analysis of the economist Arthur Laffer (the father of trickle down economics) and his infamous Laffer curve. The only time it showed this effect is if the effective rate of tax is over 70% and we are not at that level of taxation. Also it is probably higher in Ireland as we do not submit our own tax returns like they do in the US. The supposed gain is made from more people being tax compliant.

    The other FG claim that really bothers me is the keep the recovery going mantra as if they were the architects of our somewhat unbalanced and fragile recovery. The real reason though of course is that our two biggest trading partners are the US and the UK. When the Euro fell significantly against both these currencies it made our exports much cheaper. It was like devaluing our currency but it happened by luck and not any political design, Of course that is not the only reason and in economics it is always a myriad of reasons that drive economic growth or deflation or secular stagnation. Having a large number of our young people emigrate also helped keep the unemployment numbers lower and many people who are not included in the unemployment figures are underemployed like those in job bridge or part time workers who would ideally work full time.

    This government had a chance to resolve the housing market but they did nothing. Now we are in the crazy situation where rents are out of control and the ability to own your own home is becoming a distant dream for most of our young people.

    What we need is government policies that focus on reducing unemployment and building revenue generating assets. We will need to keep our tax base for this or we will be very vulnerable in a world wide economy that is very much looking like Japan in the 90’s with low growth, low interest rates and high unemployment.

    1. Kolmo

      +1
      Rents are out of control and owning a home is becoming a distant dream for those now approaching our 40’s, never mind younger people..

      1. ReproBertie

        I have a house for sale for less than I paid for it back in 2004 and I’m sure I’m not the only one. Labour and FF are both promising SSIA type deals for first time buyers. FG say they will review the Central Bank rules on mortgages. How exactly is owning a home becoming a distant dream?

        1. Mark Kelly

          The people in negative equity got totally screwed over and many are accidental landlords now as they can’t sell and crystalize their loss, they are in a worse position than those who simply don’t own and cannot currently afford their own home. This government should have helped them.

          1. classter

            ‘hey are in a worse position than those who simply don’t own and cannot currently afford their own home’

            How is this true?

            Unless their mortgage payments are significantly more expensive than renting.

        2. Fergus the magic postman

          You seem to be doing better than a lot of others Repro. Try not to let that make you completely blind to the fact that not everybody is doing so well.
          You carry on enjoying the economic recovery, & congrats for being in a position to feel it. Over half the population have not felt it, as the government themselves admitted earlier. I think the percentage is likely a lot higher.

      1. Mark Kelly

        Your post is short but lacks a coherent argument…wait do you prepare Kenny for his media engagements?

  2. Fergus the magic postman

    That’ll be enough for a further drop in the next poll. Keep ’em comin’ Enda.

    even Joseph Stiglitz said out to me in Davos, Ireland was the best of the lot.
    How many pints was he holding Enda?

  3. martco

    he was bang on with the Tory methods question…

    I’m fairly amazed that FG haven’t even bothered to try to dress it up in some way…clearly not copped onto the fact that a fair proportion of us happen to watch BBC, C4, read Brit papers on/offline and saw only a few months back the spinnery that Cameron’s lot pulled during their pre-election…..or maybe Cameron’s lads learned from our own spinners who knows but in any case it’s like a replay and even if you knew nowt about the UK elections it still smells very very off

    its not just Edna, his handlers are also clearly verified idiots

  4. Clampers Outside!

    “…..the people have come back from Australia, and the Christening was at home, not away, but he said it’s not about monetary value, it’s about emotional reunification…and they’re coming home, Seán.”

    ….the guy with two pints is coming home?

  5. Charlie

    Paragraph 1: “I’m an optimist”
    Paragraph 2: “I’m a realist”

    So basically he’s whatever suits the narrative at any given time!!

  6. ollie

    He said “for the last five years, we were given a mandate, handed a pretty tough card,”
    He meant: “for the last five years, we have handed a pretty tough card to the people of Ireland. As for us, well we have continued taking home our high salaries, our €3,000 a month unvouched tax free expenses and look forward to collecting our ridiculously fat pensions, which we haven’t had to contribute to”

    This is what Kenny said when launching FG manifesto for 2011 election. It makes interesting reading. I can’t see a single promise kept:

    That is our Five Point Plan to get Ireland Working.

    • Radical public sector reform to protect frontline services while cutting out waste;
    • Create thousands of new jobs with a €7 billion investment NewERA plan;
    • Reduce the Budget deficit to 3% by 2014, and only borrow for investment purposes by 2016;
    • Overhaul the health service to put patients first and introduce the Dutch system of universal health insurance;
    • Make politicians lead the way in cuts by reducing the number of national politicians by 35%, and abolishing the automatic right to a Ministerial car and driver;
    • Focus on Budget cuts rather than job-destroying tax increases (73% savings to 27% taxation measures); specifically, no hikes to income tax or taxes on jobs (employers’ PRSI) and protect the 12.5% rate of corporation tax;
    • Bring rogue bankers to book by stamping out white collar crime;
    • Protect State pensions and payments to carers, widows, people with disabilities and blind people, and tackle the massive levels of administrative cost and fraud.

  7. ollie

    And this is from Bill Tormey’s website.

    Summary: Tormey is a plonker.

    Denis O’Brien – often right but needs a whisper in the ear

    That is in the public interest. Denis O’Brien has acted in Irish interest to do what he has done with Topas, Siteserve etc. I think Denis’s pr is terrible. The fallout was entirely predictable. Somebody should give him sound advice because some of his reactions are damaging himself unnecessarily. Let the facts speak for themselves. Let begrudgers have the field to themselves. If they are given no fuel, their fire will extinguish. Oxygen is needed to keep the fires going Denis.

    By the way, Denis O’Brien is right on Aer Lingus and also on the vulture capital companies buying up discounted property from NAMA. NAMA is the Morecambe and Wise of the international business.

    That’s the same Aer Lingus that FG privatised, and the same NAMA that FG defend at every opportunity

  8. Puca

    just listened to the full interview … sweet merciful Jupiter; this man
    is a fupping charlatan, borderline idiot who really believes he is doing
    what’s best for Ireland (as opposed to what his 2011 manifesto pledged),
    retreating into memorised mantras when questions not prepared for arise.

    we’ve had chancers, crooks and bigots in the taoiseach;s office before but this is a dangerous fool

    more imaginary anecdotes than a conman

  9. Gary

    He really has nothing. No charisma,no intelligence, just a constant underlying determination to memorise all the soundbites he has been told to memorise. And even then he flounders. The whole country thinks he is a simpleton.

  10. Truth in the News

    If he wanted get “the recovery going” why didn’t cut taxes when he got in five
    years ago, all he has done is increased them and brought in new ones
    As to the questions about Noonan was the agenda as what Kenny was to be asked previously discussued with handlers, sooner or later Noonan has to face the music, what if the international media take it up….indeed Maria Cahill who
    is member of the Senate need to take up the issue as she is the victim of abuse
    and would have empathy with those affected.

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