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Government rift grows over new rows on 'tough' budget

THE Coalition has been rocked by a fresh crisis as ministers clash over where the budget knife should fall. With five months to go until Budget Day, infighting is already scarring the relationship between Fine Gael and Labour.

Fresh tensions between the parties have emerged, with senior sources on both sides admitting that the coalition is "at odds" over the upcoming smash-and-grab budget.

Labour has been privately accused of going on a "solo run" over income tax, while Fine Gael has raised the issue of public servant increments without consultation.

In a move that is sure to prove extremely confusing for voters, a raft of ministers has been openly speculating about what areas are on the table.


Transport Minister Leo Varadkar infuriated Labour deputies by insisting that public sector pay increments in the Croke Park Agreement should be suspended.

His comments sparked a tetchy response from Tanaiste Eamon Gilmore, who strongly rebuked him for the second time in a fortnight.

"Frankly, I would prefer it if individual ministers did not get up every Monday morning and express a point of view -- a personal point of view -- on the Croke Park Agreement or budget form or whatever," Mr Gilmore said.

"There is a Croke Park Agreement in place which is delivering reforms in the public service. The agreement does not provide for the withdrawal of increments."

The slap down by Mr Gilmore is sure to prove extremely embarrassing for his cabinet colleague.

Just two weeks ago, he rebuked Mr Varadkar over calling for compulsory redundancies in any future pay deal.

The very public spat between the pair came during a day of chaos for the coalition.

It even prompted an intervention from Taoiseach Enda Kenny, who played down weekend claims by senior Labour Ministers Pat Rabbitte and Brendan Howlin that income tax and social welfare could be touched, a move that would completely conflict with the Programme for Government.

However, Mr Kenny contradicted the Ministers' claims, adding: "The Programme for Government hasn't changed and it is our intention to implement that."

Finance Minister Michael Noonan also rowed in on the spat and claimed that all comments by ministers were "personal views". "All the speculation and various ministers saying this, that, and the other thing, that's not running from Cabinet discussions, that's their own personal views," he said.

The comments by Minister Rabbitte and Minister Howlin infuriated Fine Gael figures, who are adamant that income tax is not on the agenda.

"Income tax was never raised at any point as a possibility in the budget. Labour just took off on one for whatever reason. Maybe it was to put Fine Gael in an awkward position, but it's fair to say that people are unhappy," a source explained.

"There is tension between the two parties. The income tax issue was never on the table; it was purely a news story created by Labour for its own reasons."


The divisions on core issues are sure to heighten tensions in the coalition as ministers knuckle down to thrash out the upcoming €3.5bn Budget.

Senior Labour sources, however, today accused Fine Gael Ministers of "playing a dirty game" in clearly targeting areas that would be seen as representing core Labour values.

"The Labour position is very clear: we will not stand by an attack on workers. Fine Gael seems adamant that it won't touch income tax and it is playing a dirty game by trying to persuade the media that Croke Park has to go," a source explained.