Howlin slams Fine Gael's tax cuts demands
Public Expenditure Minister Brendan Howlin has dismissed Fine Gael demands for tax cuts, saying there is "no scope" for them as long as the country is running budget deficits.
His strong comments put him at odds with his own junior minister Brian Hayes, who recently said that there would be cuts to the main taxation rates within the lifetime of this Government.
They also come amid fresh tensions between the coalition parties about October's budget, with Labour demanding that the €1bn savings from the Promissory Note deal be factored into this year's arithmetic, while Finance Minister Michael Noonan is adamant it be kept back.
But Mr Howlin's rejection of Mr Hayes' tax cuts comments are the most overt signal of Labour attempts to assert itself, after many felt last year's budget was "too Fine Gael."
Speaking to the Sunday Independent, Mr Howlin said: "I don't see personally the scope for tax cuts when we are still running deficits and that we've taken so much out of the economy in terms of available resources for resource transfer in social welfare and so on."
He added: "Let's be realistic. I've just introduced financial emergency legislation because we're still in a financial emergency, so how can we reduce the tax burden at a time when we are introducing emergency legislation? I think it's premature."
Mr Hayes recently said the Government plans to cut income-tax rates before 2016 to "loosen the noose" around the neck of middle-income families.
Mr Hayes said it was "not realistic" that income tax be cut in the October budget, but that reductions in tax should be introduced within the next three years.
Senior Government sources have told the Sunday Independent that while initial discussions around the budget have begun, a number of clear division lines have already emerged, particularly around how the €1bn will be used.
"The budget has to be fair, fairer than last year's. We want the €1bn factored in this year, it just has to be. But we know the Fine Gaelers don't feel the same way," said one senior government source last night.
Given the €1bn savings, it has been speculated that Mr Noonan may push to make the remaining €4.1bn adjustment this year rather than spread it out over the two years. Mr Howlin, for his part, poured cold water on that saying: "I don't think we need to accelerate the balancing of books."
Likely to be a major source of tension are the two big spending departments of Social Protection and Health, with Social Protection Minister Joan Burton suggesting she will not be able to make the €440m in cuts already outlined for her department.
There is also mounting fear within Government that Dr James Reilly's estimate budget this year is "not credible" and will require an end-of-year bailout, as happened last December.