Noonan to force Coalition U-turn by hiking taxes
FINANCE Minister Michael Noonan is challenging backbenchers and Opposition TDs to "put up or shut up" when he delivers a three-year plan to cut welfare and increase taxes in advance of the Budget.
He is expected to abandon pledges made by the Taoiseach and Tanaiste, who just two months ago promised there would be no income tax hikes or cuts in welfare payments.
His stance marks a U-turn from Enda Kenny and Eamon Gilmore’s earlier promises on taxation and welfare cuts – made at a press conference in June – on the Government’s 100th day in office.
Mr Noonan wants to publish a programme of swingeing cuts alongside new charges and tax increases in October, up to eight weeks in advance of the Budget.
One source close to Mr Noonan said that the Dublin West by-election and the presidential election set for October 27 had “not been a consideration” in his thinking.
He wants his plan to reassure consumers and give more certainty to the markets as the European and global economies falter. Officials in the Department of Finance areworking on the new charges and tax increases as fears grow that the €3.6bn cuts planned for 2012 may rise to €4bn.
Mr Noonan’s three-year assessment will leave the Taoiseach and Tanaiste with egg on their faces but that will not deter him, according to sources.
A number of ministers believe that the Government should have fast-forwarded all the bad news to lower the public’s expectations as soon as possible after the election.
“Enda had very limited experience in government, as Minister for Tourism and no experience of finance,” said one source.
“And Eamon Gilmore had no experience in government. That press conference after 100 days in office was a mistake and annoyed those who already knew that there would have to be cuts and tax increases to satisfy the EU, ECB and IMF.”
Mr Noonan would like to challenge the Opposition on how they would deal with the deficit and the terms of the bailout – and allow the public to judge whose policies are more credible.
He would also like to flush out any government backbenchers who could be tempted to break ranks ahead of the Budget.
Opposition “He would like the Opposition or government backbenchers opposed to his plan to put up or shut up,” said a source.
Public Expenditure and Reform Minister Brendan Howlin is also near to completing a list of government spending cuts. Social Protection Minister Joan Burton and other ministers will see their budgets slashed when the comprehensive spending review is taken into account.
Sources say that Ms Burton will have to make decisions that will allow her to keep headline welfare rates, while making major cuts to some programmes.
Some government backbenchers are wary of inviting unpopularity by breaking bad news just a few weeks ahead of the presidential election on October 27.
Labour backbenchers are also worried that it would damage their chances of winning the Dublin West byelection, which is also expected on that date.