Tuesday 25 October 2016

Kenny hedges bets on USC plan as backbenchers vent their anger

Kevin Doyle and Niall O'Connor

Published 06/04/2016 | 02:30

Enda Kenny. Photo: Arthur Carron
Enda Kenny. Photo: Arthur Carron

Acting Taoiseach Enda Kenny is hedging his bets by sticking with his plan to abolish the Universal Social Charge for all workers as a second election remains on the horizon.

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Fine Gael's 'foundation document' aimed at winning support from Independents for a minority government says the party will continue with the phasing out of USC.

The 32nd Dáil meets for a second time to try and elect a new Taoiseach today but despite nearly 50 hours of round-table talks between Fine Gael and 15 Independents, none of them are expected to back Mr Kenny.

The Fine Gael leader will then finally engage with Fianna Fáil's Micheál Martin - 40 days after the election.

But Mr Kenny faced internal criticism last night at a meeting of Fine Gael TDs, with some complaining he is accepting proposals from Independents that were ignored when previously suggested by his own backbenchers.

And a number of deputies voiced concern that Independents will try and take credit for any new rural initiatives.

It was also claimed by some of those present that any arrangement involving Independents won't last.

It is understood Mr Kenny will present Mr Martin with the 123-page document which is largely based on Fine Gael's election manifesto and the views of the various Independents.

It puts a heavy emphasis on rural Ireland, including a fund for town and village renewal and a commitment to review the locations of garda stations.

On tax, it says the 'New Partnership Government' will fund reductions in personal tax rates "such as the continued phasing out of USC" through higher excise duty on cigarettes, a tax on sugar-sweetened drinks, and the removal of PAYE tax credits for higher earners.

"High personal tax rates in Ireland discourage work and jobs," it says.

This is likely to be an immediate point of conflict with Fianna Fáil, which described Finance Minister Michael Noonan's USC plan as "a scam" during the election campaign. Fianna Fáil only wants to abolish the tax on earnings up to €80,000. But the Fine Gael document vaguely says benefits for high earners will be limited.

In a note to his parliamentary party yesterday Mr Kenny said the document "is not designed to cover all the policy areas that a Programme for Government would".

The acting Taoiseach will meet with the Rural Five, Independent Alliance, Healy-Rae brothers and two other Independents this morning in a last ditch effort to convince them to back him in today's vote.

On the issue of housing, Fine Gael has committed to a new Cabinet minister and will ask Nama to ramp up its plan to deliver 20,000 housing units by 2020.

It suggests "a temporary targeted reduction of the rate of VAT from 13.5pc to 9pc on new, affordable houses and apartments."

For rural Ireland there will also be a new ministry, along with promises to keep small schools, post offices and credit unions open, €10m for regional airports, high-speed broadband for every home and a working group to assess mobile phone coverage.

Fine Gael will set aside an extra €50m a year to reduce hospital waiting lists while continuing to dismantle the HSE.

There are also proposals for increases in the disability and carers' benefits and allowances.

Irish Independent

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