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Saturday 30 August 2014

Coalition targets SF fiscal 'black holes'

JOHN DRENNAN

Published 22/06/2014 | 02:30

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Mary Lou McDonald
Mary Lou McDonald

A DOSSIER of Sinn Fein fiscal 'black holes' and 'economic fairytales' is being compiled by the Coalition in response to the success of the party in election 2014.

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In a reprise of its successful election strategy of 2011, where it painted Labour as being in favour of high taxation, Fine Gael is costing Sinn Fein's plans to highlight the extent of what it calls the "Sinn Fein tax threat for squeezed middle Ireland''.

Documentation seen by the Sunday Independent reveals that Fine Gael will claim that Sinn Fein plans to raise €1.8bn in new taxes on the coping classes should it secure power.

Fine Gael will particularly highlight Sinn Fein's pension proposals to abolish the marginal 41 per cent rate of tax relief on pensions which will hit "thousands of middle income earners''.

One source warned: "We estimate that a public sector worker on a wage of €40,000 would lose approximately €800 per year in reliefs."

Fine Gael will also warn that Sinn Fein's proposed 48 per cent rate of income tax would leave a total top tax rate of 62 per cent for self-employed workers and 59 per cent for those on PAYE and that its proposal to increase employers' PRSI to 15.75 per cent is, according to Fine Gael strategists, "a tax on jobs''.

The party also intends to quiz Sinn Fein on the so-called €1bn black hole in its opposition to the Haddington Road Agreement.

One source said: "Sinn Fein has a history of 'black holes' in its figures. In 2012, for Budget 2013, it complained about the increase in the VAT rate – yet didn't account for the €670m it raised in their figures. That's over €1bn of a VAT black hole over a two-year period.

"Sinn Fein are 'pocketing' money between Budgets by making no costed plans to reverse or replace Government policies such as child benefit that they vigorously opposed last year, in the Budget and throughout the year."

Labour is also planning to target Sinn Fein's alleged "fairytale economics" such as the party's €800m wealth tax proposal.

The party will also note that "after initial opposition Sinn Fein has consistently rowed in behind Labour's Budget policy when it comes to cuts and adjustments".

Like Fine Gael, the party also believes Sinn Fein's proposals to reduce tax relief on pensions contributions is "a major Achilles heel" which, if introduced, will see the squeezed middle ending up €830 worse off per annum.

Labour also plans to target Sinn Fein on the property tax, noting its proposals to abolish this tax and to repay all previously paid tax will cost the taxpayer €750m.

Sunday Independent

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