Comment: Lessons for Mitchell O'Connor after Taoiseach's rebuke

Jobs minister's reduced tax rate for return 'specialist' emigrants met with with opposition

29th September, 2016
The Taoiseach and Mary Mitchell O'Connor in 2012. Pic:

For many years the pre-budget process in Ireland has been renowned for ministers and government departments floating ideas and policies in the media to gauge public reaction.

During the crisis and a series of austerity-laden budgets this was a particularly effective tool.

The budget leaks served to scare the bejaysus out of people as the government threatened the public with some punitive but necessary revenue-raising measure, before something not quite as nasty was announced on budget day.

The public were relieved and the politicians earned a modicum of praise.

There have been very few budget leaks this year as we all get used to the so-called ‘new politics’ On Sunday, the Sunday Business Post reported on plans to cut the lower rates of USC. Michael Noonan confirmed this and other tax measures with a surprisingly detailed briefing to cabinet colleagues yesterday.

What was not included in Noonan’s tax chat was a proposed 30 per cent tax rate for returning emigrant graduates that was being floated by Jobs Minister Mary Mitchell-O’Connor.

The idea is that those earning €75,000 in specialist jobs such as medicine or IT would pay just 30 per cent tax on their income if they return to Ireland. The special rate would be time-limited, but would act as an incentive to attract young emigrants home, a stated aim of this government which is targeting the return of 70,000 over five years.

However, the proposal has, somewhat unsurprisingly, been strongly opposed by the many workers in this country who did not emigrate during the crisis. They stayed here and paid punitive tax rates including the much-hated USC. Many would bristle at the idea that their friends abroad could avail of some special deal if they came home.

So it’s no surprise that it has been met with strong political opposition. In the Dáil today, Fianna Fáil leader Micheál Martin described it as a “bananas idea”. He pointed out the inherent unfairness in such a proposal when the scarce available funds would be better served in funding third-level education and childcare.

But what was surprising was the scale of Taoiseach Enda Kenny’s own opposition to the idea and his effective torpedoing of one of his own minister’s proposals. Kenny initially gave a stock answer to Martin, saying that no decisions had been made in respect of the budget in 13 days time.

But when pressed by Martin, Kenny agreed that the idea, from one of his own ministers, was “unfair and discriminatory, of course’’. This prompted laughter in the Dáil chamber. TDs aren’t used to such straight-talk from the Taoiseach who likes to dance around questions as much as he can.

On this occasion he gave it short shrift and delivered an embarrassing rebuke of Mitchell O’Connor, a minister whose appointment last May raised eyebrows among her colleagues in Fine Gael who questioned her experience for the role.

O’Connor will be chastened by this experience where she has floated an idea that has been so quickly dismissed. The wider public, meanwhile, will be relieved that their friends in Australia, America and beyond do not stand to benefit so generously from ending their exile.

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