Kenny's re-election deal: €500 USC cut
Help for 'squeezed middle' is key to FG's hopes at ballot box
Published 11/01/2016 | 02:30
Taoiseach Enda Kenny is pinning Fine Gael's re-election prospects on a new cut to the deeply unpopular Universal Social Charge (USC) that will leave workers up to €500 better off next year.
In a major pre-election pledge, Mr Kenny will announce his intention to cut the top rate of USC by at least 1pc in October's Budget in a clear bid to court the support of low- and middle-income earners.
The tax cut would be worth €313 per year for a worker earning an average salary of €50,000, and €513 for those earning €70,000.
The move would cost €250m next year - with sources pointing out that €1.3bn will be available under the fiscal rules for tax cuts and spending measures.
Party strategists believe the election battle will be won on the economy - and that a commitment to back-to-back USC cuts will convince voters that the country's best days are yet to come under a Fine Gael-led government.
"Tax cuts make work pay. They are a key element to keeping the recovery going and are central to our long-term economic plan," a senior Government source told the Irish Independent.
News of the Fine Gael tax proposal comes after Leo Varadkar gave his clearest indication to date that he feels he is being hampered in his role as Health Minister.
Mr Varadkar indicated that he will only remain in the Department of Health after the election if he is given adequate "resources and authority" to do the job.
"I accept that overcrowding is unacceptable, indefensible and it is going on for too long, and when you call it as it is, you get criticised for being a commentator," the Dublin West TD told Newstalk.
"If I am given the opportunity I would be happy to be re-appointed, but I would want to have both resources and the authority to make the decisions that need to made, and that isn't always the case as a line minister," he added.
Fine Gael sources said Mr Varadkar's claim about requiring more authority related to his desire to have a direct role in the devising of the next Programme for Government.
The same sources pointed to the fact that Mr Varadkar "inherited" policies such as Universal Health Insurance (UHI) and that he wants his own vision for the health service reflected in the Fine Gael manifesto.