Sunday 25 February 2018

Pat Rabbitte: high taxes will bring Coalition down before full term

'If this drift is allowed continue, we won't see 2016' says Minister after Shatter debacle

Communications Minister Pat Rabbitte
Communications Minister Pat Rabbitte

JOHN DRENNAN Political Editor

Pat Rabbitte has become the first government minister to warn that the Coalition will not last full term if the "current drift" is allowed to continue.

In an interview with the Sunday Independent, Mr Rabbitte also set out Labour's demand for tax relief and an end to spending cuts in the Budget: "It's gone as far as it can in terms of cuts and taxes," he said.

The Communications Minister's stark warning that government stability was at risk will this weekend set off alarm bells in Fine Gael, which is still coming to terms with the resignation of the Justice Minister Alan Shatter after months of controversy.

The Taoiseach, Enda Kenny, and the Tanaiste and Labour leader, Eamon Gilmore, have made clear the Coalition's intention to remain in office until the centenary of the Easter Rising in 2016.

Mr Rabbitte, who is regarded as the Pretorian Guard of the coalition, has stressed the need for urgent action and warned that unless the Government gets a "firm grip" of the political agenda he would be "fearful of our chances of seeing 2016 as a Government".

Mr Rabbitte's comments are the first public indication so far that the stability of the Government is in jeopardy as a result of the controversies which have surrounded Mr Shatter, the Department of Justice and An Garda Siochana.

Mr Rabbitte said: "The single-minded focus of the first three years has to be restored. If the drift of the last three months is allowed continue and if the Government divides into factions, it is pretty obvious, really, that we won't see 2016."

In a challenging analysis of the Government's recent performance, Mr Rabbitte said: "The people are saying to get a grip, things have been sliding for the last three months, things have been going off the rails."

He warned that this "drift" would have to be addressed before summer.

"The Government has to put a coherent plan together. There has been drift, the issues affecting Justice went on far too long".

Mr Rabbitte also said the coalition parties needed to meet behind closed doors and settle on what he called a "programme of renewal".

He said: "There is no point in taking flight or panicking, but we need, in the light of criticisms, to settle a new direction."

He also warned that the broad parameters of the Budget, and of a new stimulus plan for the economy, needed to be swiftly resolved.

"Very difficult questions will have to be settled after the elections and before the summer recess," he said.

Though Budget 2015 will not be delivered until the third week of October, Mr Rabbitte said: "You cannot find yourself in September just starting some of the big questions."

He said the Government would have to immediately decide "in terms of the Budget, what latitude do we have, what can be started in construction for example".

In particular, Mr Rabbitte warned that the Government would have to deal with high tax rates: "The current high tax rates are just not tolerable any more. There has to be some tax relief."

He added: "The Universal Social Charge is punitive. It is not acceptable in any democracy, where you are dependent on the allegiance of the people, that citizens become liable to the top rate of tax at the industrial wage."

Regarded as a linchpin minister to maintain relations between the coalition parties, Mr Rabbitte also warned that public tolerance of further tax or water charge increases was over.

He said: "The consistent response I am getting from people on the door is that 'we understand the macroeconomics but we don't care anymore; you have pushed it as far as you can push it'."

The public, he said, "understand that the Government has difficult decisions, but it's gone as far as it can in terms of cuts and taxes for them".

"What people are saying on water charges is that this had f*****g better be the last piece of the austerity jigsaw."

There were, he noted, 61,000 more people at work, but he said people were saying, "'I haven't had a wage increase in six years, my son can't afford a house, we are worried about college fees' – that's the new narrative".

He also said that a new construction policy had to be advanced before summer.

The central issue remained the economy, he said, but the questions were changing, the debate was moving.

It was, he said, "no longer about what price can we borrow money, it's about issues such as when do we start a housing programme".

Mr Rabbitte said it was astonishing that once again there was an abnormal construction sector.

"Supply and demand are out of kilter, in Dublin in particular, because of the unexpected constraint where the builders left standing are being refused credit by the banks," he said.

Mr Rabbitte said: "The banks' refusal to advance credit is not causing the banks grief because they're more interested in correcting their internal ratios before the stress tests."

He also claimed voters in the local and European elections were in an "awful dilemma" – they did not want to vote for the government parties, they were, in Dublin, vehement against FF, and they did not want to vote for Sinn Fein.

"People are in a state of bewilderment, it absolutely has not settled," he said.

Sunday Independent

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