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'Big questions' on how Sláintecare will be funded under Programme for Government, TDs told

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Minister: Simon Harris will oversee the newly re-established HSE board. Photo: Collins

Minister: Simon Harris will oversee the newly re-established HSE board. Photo: Collins

Collins Dublin, Gareth Chaney

Minister: Simon Harris will oversee the newly re-established HSE board. Photo: Collins

THE State's fiscal watchdog has said there are "big questions" on how Sláintecare will be financed under plans in the Programme for Government.

Acting chairperson of the Irish Fiscal Advisory Council (IFAC) Sebastian Barnes made the remarks at the Dáil's Special Committee on Covid-19 Response.

He said that around €10bn in budget adjustments will be required under the main scenario on the impact of the crisis on the economy.

He said: "Any incoming Government will have to take difficult decisions about competing spending and tax priorities".

Sinn Féin TD Mairéad Farrell said there's a commitment in the Programme for Government to index tax credits and bands from 2022 which could cost between €2.7bn and €4bn.

Ms Farrell added that in addition the document promises a tax cut for people earning more than €100,000 at the cost of €123m-a-year.

She raised concern there that at the impact of such tax cuts and that there will be spending cuts in health, housing and childcare as a result.

Mr Barnes said there are commitments in the Programme for Government on income tax which is a third of exchequer returns.

He said raising taxes on a large part of revenue is being ruled out while there is a commitment to maintain social welfare rates.

Fine Gael pushed for a commitment that there be no increases in income tax and USC in the Programme for Government.

TDs were told the annual cost of Sláintecare was put at around €3bn.

"There are big questions on how this is going to be financed," Mr Barnes said.

He said: "the options are to reduce spending in other areas, to increase the efficiency of spending or to increase taxation in other areas.

"However, as important options are being kept off the table, it is going to be very difficult to balance those things and to meet these new spending commitments around housing and health".

"The council has a concern that by making it more difficult the risks to fiscal sustainability have been increased because the temptation may well be to borrow more rather than to raise revenues or cut spending.

"When starting from a position of very high debt that is a risky strategy, so there are some concerns about that."

Earlier during the same debate Fianna Fáil TD John McGuinness raised concern over the plans in the Programme for Government.

He claimed: "There is nothing really factual in the programme in terms of costs.

"Therefore, we do not know where that programme will end up or, indeed, how much of it will be implemented.

"That is a concern where taxes are concerned because there is a commitment to no increase in taxes."

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