FINE GAEL:LABOUR IS evolving into "a seriously high-tax party", according to Fine Gael finance spokesman Michael Noonan.
He was speaking at the launch of Fine Gael’s fiscal policy, which commits the party to reducing the State’s deficit to 2.8 per cent of GDP by 2014.
Contrasting Fine Gael’s approach to implementing adjustments to that of potential coalition partners the Labour Party, Mr Noonan said Labour favoured a “pretty heavy” 55 per cent tax rate. “Labour has moved dramatically now, and they are certainly becoming a seriously high-tax party, particularly on the income tax side.”
He said Fine Gael was aiming for a balanced budget by 2016, by which time Labour would only have completed the first round of correction. Mr Noonan said Fine Gael would focus more on spending cuts over taxation than Labour, Fianna Fáil or Sinn Féin.
Fine Gael’s target was that of the €9 billion needed to hit fiscal targets; spending cuts would account for 73 per cent and 27 per cent would come from new taxation measures without increasing the standard or marginal rate of income tax.
He said Fianna Fáil would take on average over €1,400 more from taxpayers over three budgets.
Fine Gael’s policy on pensions was totally different from what was announced in the budget, Mr Noonan said. Pension relief should continue at the high marginal rate of tax to encourage people to make provision for their retirement, but there would be a levy of 0.5 per cent on private pension funds.
The pensions industry, he said, had indicated it was happy with this approach.
He said Fine Gael would reduce the lower rate of VAT from 13.5 per cent to 12 per cent. This would impact on people working in areas with “high employment potential”, such as hairdressers and those in hospitality services.
Asked if the party was engaging in “auction politics”, Mr Noonan said that was not the case. “For every relief we give there’s a take somewhere else in the programme.”
He continued: “We believe that the country costs too much to run.” While serving as chairman of the Public Accounts Committee (PAC) he had discovered there was an enormous amount of waste and bad practice.
Fine Gael's fiscal plan, Less Waste, Lower Taxes, Stronger Growthproposes a series of spending reforms, including cuts in subsidies for transport operators and opening up public transport to competition, as well as reductions in subsidies for energy-saving technologies in 2014 and waste management.
An “all-out war” on social welfare fraud is also promised, along with “a better targeted” child benefit support system and cuts to the rent supplement.
Cuts in working age payments, excluding carers, the blind and the disabled, of a further €10 a week by 2014 are also proposed.
Listed under measures to cut public sector payroll costs are “locally-delivered 1 per cent payroll savings each year by cutting overtime, special allowances, expenses, sick leave, etc”.
In terms of tax measures, the document describes as unfair the concept of a recurring residential property tax on the family home. The plan also describes the tax as “Fianna Fáil’s proposal, now endorsed by the Labour Party”.
The option of a local “site sale profits tax”, levied on the profit made from the site value on the sale of a residence, could be considered by local authorities in 2014, the document states. Measures to increase taxation on “import-intensive consumption” include a 25 cent increase on the price of a packet of cigarettes in 2012 and a €1 increase in excise duty on a bottle of wine by 2014, along with an extra VAT yield from banning below-cost selling of alcohol. Increases in motor tax are also proposed. Fine Gael would increase the second home tax to €300 per annum. Carbon tax would be increased to €20 per tonne in 2012 and to €25 per tonne by 2014, with an exemption for farm diesel.
The party also favours the abolition of PRSI relief on employer pension contributions and reducing the threshold for application of a minimum 30 per cent effective tax rate to €250,000, with marginal relief from €125,000. The rate of capital acquisitions tax and capital gains tax would increase from 25 to 30 per cent.
The Irish Times has the best writing from the election.
Dan O’Brien analyses Fine Gael’s fiscal plan while Kathy Sheridan looks at Sinn Féin’s election manifesto.
You can also read Emmet Malone’s account of joining Maria Corrigan on the campaign trail. Make sure to read them in our print edition or by subscribing to our daily epaper
