Micheál Martin claims the elimination of water charges would not erode the tax base
Fianna Fáil leader Micheál Martin has rejected a European Commission report that said the elimination of water charges would erode the tax base.
The Commission's remarks came in its latest post-bailout report in the Irish economy.
Mr Martin said scrapping water charges is "not an erosion of the tax base because it's made a very negligible contribution to the widening of the tax base in the last three years."
He was speaking after his party's Co Carlow think-in where he also responded to a study by the Irish Tax Institute that outlined how workers are paying the top rate of income tax before their salaries reached the average industrial wage.
The Fianna Fáil TD was asked if the party should rethink its policy of pushing for spending measures over tax cuts as a result of the study.
Mr Martin said he was committed to its position that there should be a 2:1 break-down of spending to tax cuts in the upcoming Budget.
"There's absolutely no question but that we do have to invest in health, in education and housing and give people some decent quality of life in terms of access to those services," he added.
He said there "is a case" for tax cuts but that a balance has to be struck.
"We need to be mindful of the risks to the Irish economy not least the Brexit risks and proceed in a cautious manner," he added.
Meanwhile he said he doesn't think it will be achievable or the right policy to abolish the USC in five years as Finance Minister Michael Noonan today told an Oireachtas committee he'd like to do.
Mr Martin responded to this saying: "I don't believe it's achievable".
"We don't believe its the right policy or the right approach," he said adding that there needs to be a balance between investing in services and infrastructure and giving people a break in their taxes.