Monday 5 December 2016

Tánaiste coy on Cabinet position for Kelly as Labour plans sugar tax

Published 09/02/2016 | 02:30

Howlin speaks as Tánaiste Joan Burton listens at the launch of Labour’s economic plan yesterday. Photo: Gareth Chaney
Howlin speaks as Tánaiste Joan Burton listens at the launch of Labour’s economic plan yesterday. Photo: Gareth Chaney

Tánaiste Joan Burton has refused to say whether she will reappoint her deputy leader Alan Kelly to Cabinet if the Labour Party gets back into government.

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Ms Burton, who is understood to have an uneasy relationship with Mr Kelly, said it was "early days" and decisions would not be considered until after the election.

"We're very confident about being back in government, but I think the old Catholic catechism had a sin called presumption.

"I think it would be wrong to assume anything. The electorate are supreme when it comes to elections," she said.

Ms Burton was speaking as the Labour Party launched its economic plan for the next five years. As previously revealed by the Irish Independent, it includes a clawback mechanism that would limit the advantage of the USC abolition to workers earning less than €120,000.

Anybody over that amount would get a tax freeze under the Labour plan.

The party unveiled a billboard yesterday showing that a worker on €25,000 a year would benefit to the tune of €44 each month from its tax cuts, while a worker on €50,000 would take home an extra €26 a month.

Public Expenditure Minister Brendan Howlin revealed yesterday the party wanted to collect €183m over five years from a sugar tax and €260m from hiking the price of cigarettes.

Although Labour's plan for the abolition of the USC is reasonably close to that of its Coalition partners in Fine Gael, the two parties have massively different proposals around PRSI.

Hardship

Fine Gael wants to lower the entry point for workers paying the charge to €13,000, while Labour wants to offer additional relief to people earning between €18.305 and €36,608.

Mr Howlin also announced plans to increase the levy on the banks despite fears the extra charge could be passed on to consumers or affect the price of AIB shares ahead of a State sell-off later this year.

"The notion that they were very much central to the collapse and can now write-off all that loss against future tax payments as they start making profits and recover . . . It is just not fair when we are taxing workers who endured terrible hardship during the crash."

He accepted that it might affect the share price of AIB but said that measures, which should bring in an extra €350m for the Exchequer, would "not be an overly onerous burden" for the banks.

Mr Howlin said his party was sticking to the figures produced by the Department of Finance on Budget Day, but added that forecasting was not an exact science. Asked whether he wanted to return to the Department of Public Expenditure and Reform after the election, he replied: "I can't say I've enjoyed the last five years, but I've been extremely privileged to have been at the heart of a team of parliamentarians in the Labour Party who worked might and mane against incredible hostility to fix a broken economy.

"It's been an incredible journey. We've a proven track record in financial management.

"I don't think even our worst enemies would say that we haven't immeasurably improved our situation in the last five years."

He said voters must decide if they wanted to put the recovery "at risk for what is a non- alternative".

Irish Independent

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