Friday 9 December 2016

Martin: Fine Gael plan to scrap the USC is 'fantasy'

Published 18/11/2016 | 02:30

Fianna Fáil leader Micheál Martin says Government plans for scrapping the USC are not in the land of reality Photo: Gareth Chaney
Fianna Fáil leader Micheál Martin says Government plans for scrapping the USC are not in the land of reality Photo: Gareth Chaney

The Government's plan to abolish the Universal Social Charge (USC) over the next four budgets is "not in the land of reality", according to Fianna Fáil leader Micheál Martin.

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In a significant intervention, Mr Martin ridiculed Fine Gael's proposals on USC, which he said are no longer realistic in light of Brexit and the industrial relations crisis.

In an interview with the Irish Independent, Mr Martin said the idea of completely abolishing USC was made by Taoiseach Enda Kenny in a bid to win the general election.

But insisting that the Government must now be "honest" with the electorate in light of the unrest in the public sector, Mr Martin said that Fine Gael's plans to scrap USC will be met with opposition by his own party.

"It can't happen. In our view, that is something that was said - to use Enda's phrase - 'in the heat of an election battle'. That was never going to be realised," Mr Martin said.

"I don't think you can eliminate Universal Social Charge in light of all the challenges that I've just articulated to you. It's not in the land of reality," he said.

Pressed on the issue, given that Fianna Fáil has an input into the Government's tax policy, Mr Martin was adamant that the planned USC abolition over four years is no longer viable.

"You are not going to eliminate the USC. Unless you have other taxes by another name that claws back the money, you call it USC by another name," he said.

Both Public Expenditure Minister Paschal Donohoe and Finance Minister Michael Noonan have insisted the Government's plans to phase out the USC by 2021 still stands.

But the intervention by Mr Martin will put major pressure on Fine Gael, given Fianna Fáil's role in propping up the Government.

Fianna Fáil wants to reduce USC - but has never suggested that it can be fully abolished.

Meanwhile, Mr Martin said Brexit is a "game changer" for Ireland and that he does not believe the major set of risks coming from the decision by British voters has been realised by the Government.

"What's lacking at the moment is a sense of direction for the country," he said.

"We should now be more cautious and honest because of Brexit."

On the issue of unrest in the public sector, Mr Martin said the Government has handled its approach to unions very badly.

He cited the example of the gardaí and the teachers, who both have been at the centre of disputes in recent weeks.

Signals

Mr Martin said he is deeply concerned about the impact the €50m Labour Court ruling will have on the Justice Department's budget.

He said it is now incumbent on the Government to produce a detailed paper covering the various challenges facing the economy.

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"Manufacturing output was down last month, income tax has been down two months in a row and the retail sector - we are getting signals from them, and they are worried," he said.

On the issue of the confidence and supply motion, Mr Martin said his party is closely monitoring the situation but that he does not believe there has been any breach.

He also said that it is his clear view that now is not the time for another general election, given the challenges facing the country.

Irish Independent

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