News Irish News

Saturday 25 November 2017

Fine Gael, Labour at war over tax hikes

Fionnan Sheahan, Aine Kerr and Fiach Kelly

FINE GAEL and Labour -- on track to form the next government -- yesterday clashed openly and bitterly on the key cuts and tax hikes needed to salvage the economy.

In a series of public spats they revealed serious rifts on major economic policies.

And the publication of their pre-Budget proposals was marked by sniping between senior FG and Labour figures.

The latest opinion polls all indicate the parties will form the next Government. With Fine Gael currently ahead of Labour, Enda Kenny is the clear favourite to become Taoiseach.

But there was a strong difference of emphasis yesterday with Mr Kenny warning against the dangers of a left-wing government while Mr Gilmore spoke about the threat of right-wing policies. Mr Gilmore came under pressure, because of Sinn Fein's stronger standing in the most recent poll, to rule out going into coalition with it.

He failed to rule it out categorically, but did say he didn't think it was good to have the smaller parties holding the balance of power. "We don't intend to go into government with Sinn Fein, no," he said.

Of more immediate concern to taxpayers is the gap that yawns between Labour and Fine Gael on critical issues.

These include:

  • The level of increase in income taxes.
  • Social welfare cuts.
  • Political reform.
  • Taxes on property.
  • Ratio of taxes to spending.

Labour was even unwilling to meet the €6bn in cuts demanded by the EU/IMF in the bailout -- sticking instead to a €4.5bn adjustment.

Although he agreed with the €6bn target, Mr Kenny declined to pledge to vote for the Budget next week, saying the Government already had a majority.

The Government is planning to push through public sector pension reductions next week.

As well as social welfare cuts being voted on, the Coalition will also pass a Financial Emergency Measures Bill to bring the reductions into effect.

After Fianna Fail's support was registered at just 13pc in the latest opinion poll, pressure remains this weekend on Taoiseach Brian Cowen.

But party sources said there would be no move on the leadership until after Christmas and the run-in to the campaign.

Fine Gael published tax and spending cuts figures to cover the next four years, while Labour stuck with 2011 while promising a four-year plan in the coming weeks.

Targeting his opposite number in Labour, Fine Gael finance spokesman Michael Noonan insisted that, contrary to recent comments, he did not believe the country was "banjaxed".

Labour's finance spokeswoman Joan Burton came in for major criticism this week for claiming the country was "banjaxed" following the IMF-EU bailout.

Mr Noonan was also highly critical of Labour's plan for a 48pc rate of income tax for high-earners making over €100,000, as it would drive away business people.

Ms Burton retaliated by repeatedly referring to Fine Gael's support for the bank guarantee two years ago.

Fianna Fail latched on to the policy differences, with Tourism Minister Mary Hanafin saying the economic proposals put forward illustrated the large and growing gap between the two parties.

She said the two parties were "fundamentally at odds" when it came to solving the Exchequer's financial issues.

European Affairs Minister Dick Roche described Labour's budget proposals as "a fraudulent attempt to deceive voters".

The rise in support for Sinn Fein saw Mr Gilmore struggle to dismiss suggestions he might share power with the party.


Mr Gilmore defended his claim that only €4.5bn could be cut in next year's Budget, despite the EU and IMF demanding a €6bn package.

The Labour leader claimed Fianna Fail was "wrong about every major decision they have made since the crisis began" and was wrong again about on the €6bn figure.

Mr Gilmore stole a march on Mr Kenny by proposing significant cuts to the salaries of the Taoiseach and ministers.

The Labour leader claimed if he was Taoiseach, his salary would be capped at €190,000.

And senior and junior ministers would also have to take a cut of 17pc in their salaries -- a drop of some €30,000, he said.

Mr Kenny insisted he had already given serious thought to the salary levels, but would not be making an announcement until the first week of the General Election.

Mr Kenny also said FG would cut the weekly dole by €18 over four years as he reiterated support for the Government's target of €6bn in cutbacks and savings, and the overall €15bn target for 2014.

Irish Independent

Promoted Links

Today's news headlines, directly to your inbox every morning.

Promoted Links

Editor's Choice

Also in Irish News