Greens to make tax indexing a 'core issue'

Index linking tax credits and bands to inflation will be a core issue for the Green Party in post-election coalition talks, the…

Index linking tax credits and bands to inflation will be a core issue for the Green Party in post-election coalition talks, the party has said in the aftermath of its annual conference in Galway at the weekend, Liam Reid& Mark Hennessy.

The party criticised the recent tax cutting proposals put forward by the Labour Party and the Progressive Democrats.

In a further sign that tax rates will dominate the early part of the general election campaign, the Greens said Labour's proposals were "insufficient", while the intention of the Progressive Democrats to cut the top rate was "inequitable".

Labour has promised to cut the standard tax rate from 20 per cent to 18 per cent within two years of gaining power, while the Progressive Democrats have pledged to do the same and also to cut three percentage points off the top rate to bring it down to 38 per cent.

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The Greens said the PRSI contributions paid by workers and employers should be cut in order to reduce labour costs, while the loss to the exchequer should be made up by a €20-a-tonne levy on carbon use, a move that would increase fuel costs.

However, the Green Party leader Trevor Sargent appeared to leave open the possibility of supporting cuts in the standard income tax rate in a future coalition government if the Greens could be guaranteed that public services would not suffer.

He also rejected suggestions that he had adopted a contradictory stance on possible coalition with Fianna Fáil by saying he would resign as leader but would be willing to serve as a minister in a Fianna Fáil-led government.

On RTÉ's Week In Politics, Mr Sargent indicated he would step down as leader if the party was not in office, saying that he had been mandated to implement Green policies and change the government.

His comments came as the party outlined plans to increase the old-age pension by more than €120, to €334 a week, replace tax relief on private pensions with direct government contributions of up to 50 per cent, and to provide people with an option of working until they are 70.

Other policies and promises outlined over the weekend included medical cards for all children under six years, banning corporate donations, and measures aimed at tackling climate change, including stricter new housing standards, a €20-a-tonne levy on carbon use and individual carbon quotas.

Speaking to The Irish Timesyesterday, Mr Sargent described index linking tax bands as "a fundamental part of social justice from our point of view".

This view was echoed by the party's finance spokesman, Dan Boyle, who said the party would find it "very hard" to sign up to any tax policy that did not include the measure.

The party's current tax policy does not provide for any cuts in the higher or standard rates of income tax, although it commits itself not to increasing corporation taxes and to a five percentage point rise in capital gains taxes.

Mr Sargent said the party was sceptical about the tax rate cuts being promised by other parties.

"It's still anomalous to talk about making tax cuts and improving public services. We need to be convinced in that area."

He said the mandate he had from the Green Party was not to enter any pre-election pact and to bring about a change in government.

"If it turns out that Fianna Fáil is still required to form a government, then I have to, I believe, do the honourable thing and step down as party leader."

Asked why he would still be prepared to be a minister in such an administration, he said: "Because I want to bring about Green Party policies, and I want to do everything possible to do that."