Sinn Féin yesterday unveiled plans for a dramatic increase in public spending, funded by billions of euros in tax increases on business and the better-off, in a manifesto described by party leader Mary Lou McDonald as "uplifting and fair".
The plans were immediately assailed by Fine Gael and Fianna Fáil as reckless and economically dangerous, with both parties focusing on Sinn Féin's promises of big cuts to the USC, to abolish property tax, hike taxes for businesses and those earning more than €100,000 and increase public spending by €22 billion over five years.
Sinn Féin promised unprecedented investment in public services, with social housing, healthcare, education and childcare all scheduled to receive billions of euros in extra spending if the party was in government and implemented its manifesto.
It pledged an additional €12 billion in day-to-day spending on public services and welfare over the next five years and a further €10 billion in additional infrastructure spending, with the bulk of this going on public housing.
In addition, Sinn Féin promised to abolish USC on the first €30,000 of income, get rid of the local property tax and give a tax relief of one month’s rent to all renters.
To pay for this, it unveiled a sweeping range of tax increases which would raise an additional €3.8 billion a year.
The party says that only those in the top 3 per cent of earners would pay more tax, but it aims to raise more than €700 million in income tax from those earning more than €100,000.
In addition it pledged a wealth tax on net assets over €1 million in value, cuts to income tax relief on what it called “gold-plated pensions”, increases on employers’ PRSI for higher-paid workers and an additional €225 million in tax and levies on the banks.
But the largest single revenue-raising exercise – changes to the tax treatment of multinationals’ intellectual property assets – was immediately questioned by Fine Gael, which cited advice from the Revenue Commissioners to Minister for Finance Paschal Donohoe, calling the yield from such a move into question.
‘A timing matter’
Mr Donohoe has previously told the Oireachtas finance committee that Revenue advised him that while there could be a “large theoretical cashflow gain”, the move would “not lead to more tax overall and this is simply a timing matter”.
“To present this as additional ongoing tax for the Exchequer would not be correct,” he said.
Fianna Fáil finance spokesman Michael McGrath said the Sinn Féin manifesto would “cause untold damage to Irish economy”.
“The notion that you can raise €4 billion extra in taxes without having an effect on ordinary people or without causing major damage to the economy – I just don’t accept it,” he said.
“That’s the big lie at the heart of this – even though all the sums might add up on paper, if you do all these things together it will have a dramatic effect on the economy,” Mr McGrath said.
Housing
Meanwhile, the Labour Party also published its manifesto yesterday.
The Labour Party has said it will not make “grandiose promises” on tax cuts but will instead focus on a multibillion euro programme for housing, health and childcare if it is part of the next government.
Party leader Brendan Howlin said the tax promises of other parties represented a “con job” as he hit out at Fine Gael for “squandering the economic recovery” and for overspending at the new national children’s hospital “which should never have cost as much as €2 billion”.
“We need a children’s hospital. But we do not need the most expensive hospital on the planet,” Mr Howlin said.
The party promised to build 80,000 homes on public land over the next five years through a €16 billion fund.
This fund will be partly made up of €5 billion from the Ireland Strategic Investment Fund and €4 billion redirected to housing from the “rainy day” fund.
The party has also said it will provide funding for local government to deliver a home insulation scheme that will eventually reach a target of 100,000 homes a year.
