Wednesday 28 September 2016

Fine Gael's proposal for 'everyone to contribute'

Coalition parties deny a 'black hole' in figures

Kevin Doyle, Cormac McQuinn and Niall O'Connor

Published 03/02/2016 | 02:30

Sinn Fein’s Gerry Adams and Pearse Doherty at the launch of a billboard which says Fine Gael’s numbers do not add up. Photo: Tom Burke
Sinn Fein’s Gerry Adams and Pearse Doherty at the launch of a billboard which says Fine Gael’s numbers do not add up. Photo: Tom Burke
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Fine Gael's Long-Term Economic Plan will adopt an 'everybody pays something' approach with the entry point for PRSI to be reduced to just €13,000.

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Thousands of low-income workers will see the much-hated Universal Social Charge disappear from their pay slip under the plan but it will be partly replaced by Pay-Related Social Insurance (PRSI), the Irish Independent understands.

A source said: "Most people will still be paying something into PRSI but they will be paying a lot less than they are now."

They added that the changes to the PRSI system would be offset by the restoration of benefits such as dental treatment and the extension of maternity leave.

"We can't narrow the tax base too far, so everybody will pay something," said the source.

It comes as Fine Gael and the Labour Party are fighting accusations of "a black hole" in the budget estimates being used for their election promises.

Both parties believe there will be billions of euro more available in the next five years than estimated by Fianna Fáil, Sinn Féin and the Fiscal Advisory Council.

Fine Gael TDs were last night told their manifesto would contain elements on climate change and supports for disabilities - areas the Government has been accused of neglecting.

At a private party meeting, Health Minister Leo Varadkar said "incremental improvements" would take place in the health service.

In a pledge deemed significant by a number of sources present, Mr Varadkar spoke about introducing new trolley targets for hospitals whereby they will be required to improve on their numbers by 5pc each year.

He is understood to have spoken about moving from the trolley count system to a "patient experience model" that has been put in place in the UK.

He also pledged that every child in receipt of the domiciliary care allowance will be entitled to a medical card, and there will be significant investment in speech and language therapy.

Justice Minister Frances Fitzgerald pledged radical new laws aimed at tackling cyber-crime. She also spoke about the setting-up of a family court and plans to investigate the finances of criminals who claim free legal aid.

Meanwhile, the Taoiseach's economic advisor Andrew McDowell told the meeting there would be a major reduction in the pupil-teacher ratio in early school years.

Fine Gael will launch their Long-Term Economic Plan (LTEP) tomorrow and explain exactly how they propose to abolish the USC, fund public services and also stow money away into a so-called 'rainy day' fund. Their proposals to make low-paid workers pay PRSI contrast completely with the Labour Party's plan for PRSI reform which would see substantial reductions for low-income earners.

Fianna Fáil's Dara Calleary said the plan proved Fine Gael "intend to make those on lowest incomes pay for their proposals to help those on the highest".

The LTEP will allocate money from the available fiscal space to the 'three steps' of more jobs, making work pay and investment in public services.

However, the main parties remain completely at odds over how much money will actually be available in the coming years.

Sinn Féin unveiled a poster yesterday claiming Fine Gael's figure of €12bn doesn't add up, while Fianna Fáil's Michael McGrath said making such large commitments was "unwise".

Fine Gael and Labour are basing their figures on an €8.6bn net space identified by the Department of Finance, an additional €2bn available for discretionary revenue measures arising from taxation growth and an extra €1.5bn as a result of proposed changes to EU rules.

But the department's figures do not factor in the effects of inflation or potential public sector pay rises after 2018. Fine Gael and Labour disputed the relevance of this, saying pay rises and social welfare increases are policy issues for the next government and don't affect the overall fiscal space.

Irish Independent

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