Labour has proposed cutting spending by €4.5 billion in its pre-Budget plans published today.
Capping public sector and political salaries at €190,000, creating a third tax rate of 48 per cent for top earners and increasing the tax on savings form part of the plan.
The party is proposing to create a €500 million jobs fund which, when set against economies of €5 billion, would result in overall spending cuts of €4.5 billion.
Party leader Eamon Gilmore said the proposals were a balanced approach that would tackle the national deficit while providing room for jobs and growth.
He attacked the Government’s plan to reduce spending by €6 billion in the Budget as “dangerous for Ireland” and an unacceptable risk to jobs and growth.
“The level of frontloading of cuts and tax hikes planned for the Budget is simply too much to swallow in one year. We cannot cut our way out of this crisis, we must also have growth,” he said.
The €6 billion sum was a “figure of convenience” and a product of a right-wing consensus in Ireland and Europe, he said.
Mr Gilmore described the deal with the IMF as a “sell-out” and said Labour, if returned to Government next year, would renegotiate it as soon as possible.
The party is proposing savings of about €5 million through political reforms, including the €190,000 salary cap on the Taoiseach’s salary and a commensurate further reduction of 17 per cent applying to ministers and ministers of state.
Ministerial cars would be pooled, and Garda drivers replaced by civilians unless security considerations apply.
The party says it would increase the annual tax on second home from €200 to €500, increase Dirt tax on savings to 30 per cent and cut personal tax credit by €250. Property-related tax reliefs would be abolished, yielding savings of €360 million a year.
The capital budget would be cut by €1.2 billion, but Mr Gilmore claimed this did not mean Metro North would not go ahead.
The public sector pay bill would be cut by €400 million, and €215 million would be saved by tackling welfare fraud and curbing spending on rent supplements.
Labour also says it can achieve almost €1 billion in non-pay savings next year while maintaining investment in education and front-line health services.
Resources would be prioritised for job creation and the public sector pay bill would be reduced by at least €1.4 billion over three years.
