Tuesday 20 February 2018

Kenny hits back at Martin following claims that Government's USC plan is 'not in land of reality'

FF leader Micheál Martin Photo: Colin O'Riordan
FF leader Micheál Martin Photo: Colin O'Riordan

Niall O'Connor and Colm Kelpie

Taoiseach Enda Kenny has lashed out at Fianna Fáil leader Micheál Martin after he ridiculed the Government's plans to phase out the Universal Social Charge (USC) over the course of the next four budgets.

Mr Martin has piled major pressure on Fine Gael following his claim that the party's USC plan is "not in the land of reality".

The opposition leader said that in light of Brexit and the industrial relations crisis, Fine Gael's tax policy does not stand up to scrutiny.

He accused Mr Kenny of making promises on USC in a bid to win the recent general election.

But speaking in Armagh where he was attending the North-South Ministerial Council, Mr Kenny stood by his party's proposals to scrap the tax by 2021.

The Fine Gael leader suggested that Mr Martin himself is guilty of hypocrisy, given that he was part of the Fianna Fáil government that introduced the USC in the first place.

He accused Mr Martin of being part of a regime that causes havoc on the economy.

"It's time for a Reagan quote here, 'there you go again'," Mr Kenny told reporters.

"I have to work very effectively with Micheál Martin as leader of the Fianna Fáil party in the context of the Government and the arrangements that we have.

"I have to say he would be very associated with the USC, wouldn't he, because he was a member of a government that after the most ruinous, calamitous management of any economy, brought in the USC as an emergency tax cut, and the Fine Gael party has a very clear intention of abolishing that USC over a five-year period and we stand by that."

The USC was reduced in last year's budget in a move that cost more than €330m.

However, with demands for a greater focus on investment in public services, Government proposals to scrap it entirely are being openly questioned.

Speaking privately yesterday, a number of ministers told this newspaper that they do not believe the proposal will be honoured.

"We need to get real and accept that with all the challenges that have emerged, this proposal can no longer be implemented," said one ministerial source.

However, in response to a parliamentary question by Labour TD Joan Burton, Finance Minister Michael Noonan indicated that the party was standing over its USC plans.

"Budget 2017 is the third step in a long-term process of unwinding the USC," Mr Noonan said.

"It is my intention to continue the process of reducing the USC in future Budgets, and the deputy will be aware that this is not a measure that I have considered in isolation, but as part of a wider medium-term income tax reform plan," he said.

Irish Independent

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