Monday 24 October 2016

Future of USC to be debated by TDs before the Budget

Cormac McQuinn and John Downing

Published 26/08/2016 | 02:30

Finance Minister Michael Noonan Photo: Tom Burke
Finance Minister Michael Noonan Photo: Tom Burke

The future of the Universal Social Charge (USC) is set to be one of the most fraught issues to be probed by TDs who will have just weeks to provide recommendations for Budget 2017.

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The Dáil's new cross-party Budgetary Oversight Committee will meet at the start of September with little more than a month to prepare a report for Finance Minister Michael Noonan - and already there are stark differences over the USC.

A row erupted over the hated tax that nets €4bn a year after the emergence of a briefing by Finance Department officials outlining options for scrapping the USC, as promised by Fine Gael over a number of years.

One option includes raising property tax by 600pc, while among the measures in another is adding 18c to a litre of petrol and diesel.

Sinn Féin's Pearse Doherty, a Budgetary committee member, has claimed that the briefing shows that Finance Department officials are very much opposed to Government proposals to phase out the USC.

He said moves to end the USC were "reckless" and argued that its revenue should be used to tackle the housing crisis and provide proper health services.

Fine Gael TD Noel Rock branded Mr Doherty's comments on the USC as "disingenuous nonsense" and a spokesman for Mr Noonan pointed out that the ­Government never intended abolishing the USC in one go".

The Finance spokesman added that "there is absolutely no intention to increase property tax in the forthcoming Budget".

Fianna Fáil's Michael McGrath, another committee member, said the "drastic options" in the finance briefing are based on an immediate abolition of the USC, "which, of course, is not what any party has planned". His party want to see it phased out for those earning less than €80,000.

Budgetary oversight committee chairman John Paul Phelan, of Fine Gael, said he "wouldn't like to ­pre-empt" whether or not it's possible for TDs to find a consensus on the USC.

However, he added: "In the past, agreements have often been found in Irish politics in places where people thought agreements could never be found". He conceded there will be discord among the committee's TDs, saying he'd be "disappointed if there wasn't robust debate".

Mr Phelan said he is "concerned" that the members would have little more than a month to prepare their report, but said that "this year's process was always going to be a more truncated effort than the ­normal process".

It had its first meeting at the end of July and will reassemble in the first week of September.

Another committee member, Green Party leader Eamon Ryan, also remarked that the timescale for the committee's work this year is "remarkably tight".

He said "this Budget has to be the start of a very different process", adding that it would end the traditional process where "the Minister for Finance rocks up with his briefcase on Budget day and announces everything for the first time".

Irish Independent

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