independent

Monday 21 April 2014

Anger over Fine Gael's 'late push' for USC reform

Tanaiste Eamon Gilmore and Taoiseach Enda Kenny
Tanaiste Eamon Gilmore and Taoiseach Enda Kenny

FINE Gael ministers' belated demands for reforms of the Universal Social Charge have come under fire from the Labour backbenches.

The Coalition has put the dreaded USC on the table as an option for a tax cut, but a Labour Party TD took a sideswipe at Fine Gael for their "late" arrival to the reform cause.

The sniping came as Taoiseach Enda Kenny said tax relief will be looked at ahead of next year's Budget.

Mr Kenny said he wanted to see relief for people "who have put up with enormous challenges in the last three years", but the big picture must also be considered.

"Sure we'd love to be in a position to be more 'fluirseach' (plentiful) as you might say, but the budget is fixed for 2014," he said in Abu Dhabi.

"Government, in determining Budget 2014, has taken that into account. So as we hope the economy improves, as our rating improves hopefully, we will look at the situation prior to the budget being prepared for 2015," he added.

Junior Finance Minister Brian Hayes has also insisted the USC must be reduced. Mr Hayes said taxation levels for workers are "scandalous".

Last night, Aodhan O Riordain TD recalled Fine Gael's denial of Labour's reform proposals. "Delighted to see that some are coming to the realisation that the USC needs reform. Better late than never," the Labour TD said.

And he highlighted a Dail debate almost three years ago where Mr Hayes called the USC "progressive".

Before Budget 2012, Labour was calling for a hike of 3pc in the USC on any income earned over the €100,000 threshold.

Although Fine Gael ministers are now calling for the USC to be reduced, there are still tensions within the Coalition over the previous stance.

Mr Hayes said something needed to be done, given the taxes facing many workers.

SCANDALOUS

"We have a scandalous situation in this country where a single person who earns €32,800 -- every euro over that is taxed at 52pc. We have to deal with that problem," he told the Irish Independent.

Mr Hayes's comments on the USC threshold have been interpreted as a signal that Finance Minister Michael Noonan may be willing to increase the ceiling at which workers qualify for the higher rate of USC.

The USC, effective since 2011, is calculated at 7pc of every worker's income over €16,016.

Irish Independent

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