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2007

Government has 'head-in-the-sand' approach to inflation

Date Released: 13 Dec 2007

SIPTU General President, Jack O’Connor, has condemned Government complacency over the 5% inflation rate and its failure to index tax credits and bands in the recent Budget.

“This Government has such a head-in-the-sand approach to our current 5% rate of inflation that the Minister for Finance could not be bothered mentioning the Consumer Price Index, even once, during the recent Budget speech”, said Mr. O’Connor.

“As further increases in interest rates have ceased, their still high, but easing contribution to current inflation is now being offset by rising food prices, with bread and cereals up 10% on last year and milk products up 14%. Similarly, the reduction in gas and electricity prices is being offset by the 25% increase in the price of home heating oil, while transport costs are up due to petrol prices being 16% higher than last year”. 

“Despite a healthy public finance situation that is the envy of others in Europe, the Budget failed to index tax credits and bands in line with the overall 5% rate of inflation. By only providing for a 4% increase in credits and bands Budget 2008 has in fact increased the tax burden on the PAYE sector that continues to endure such inflation,” Mr. O’Connor concluded.





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