Likely Coalition is already coming unstuck over cuts figure of €4.5bn
Labour sticks to guns on smaller
Published 04/12/2010 | 05:00
LABOUR Party leader Eamon Gilmore yesterday defended his claim only €4.5bn can be cut in next year's Budget, despite the EU and IMF demanding a €6bn package.
Mr Gilmore said a €6bn adjustment would "damage" the economy, "halt growth" and "put jobs at risk".
He said Labour's approach to the Budget differed fundamentally from the Government and the €6bn adjustment was "a figure of convenience" and had no economic basis.
"It is a product of a right-wing consensus in this country and in Europe," he said.
"What the Labour Party is proposing is what is in Ireland's interests."
Mr Gilmore claimed Fianna Fail was "wrong about every major decision they have made since the crisis began" and was wrong again on the €6bn figure.
When pressed on whether this also meant Fine Gael was wrong as it agreed with the €6bn figure, the Labour leader replied: "They make their judgement. We make our judgement."
Mr Gilmore continued to insist his party would negotiate a new deal with the IMF and the EU.
"We believe that deal with a new mandate for a new government can be renegotiated," he said.
The Labour leader is also advocating the introduction of a third rate of tax of 48pc for those earning over €100,000.
The party has no cuts to basic social welfare payments included in the plan, but promises to save €215m from a clampdown on fraud and a reduction in rent supplement.
Labour is pledging to maintain investment in education and reduce the cost base in the health service.
The party is planning a tax and spending cuts package of €5bn, while putting back €500m into the economy as a stimulus.
On public sector redundancies, Mr Gilmore said the party was planning to let 15,000 to 20,000 go on a voluntary basis.
The public sector pay bill will be cut by €400m from natural wastage and redundancies and a cap on public sector salaries, including politicians, at €190,000.
Labour wants to increase the annual tax on second homes from €200 to €500 and raise tax on savings to 30pc and cut personal tax credit by €250.
Again, the party is proposing to abolish property-based tax reliefs to save €360m.
The capital budget should be cut by €1.2bn, but Mr Gilmore would not say if this meant a major project like Metro North would not go ahead, as it would be reviewed.
Finance spokeswoman Joan Burton said Labour's proposal for a €4.5bn cut in 2011 "strikes a balance" between the need to put the public finances on the right track and leaving room for growth.
Ms Burton said the party was seeking to promote "tax justice". "The core of the Labour Party's budget proposals is made up of measures that will ensure that very high income earners make a fair contribution by limiting their ability to shelter their incomes from tax," she said.