Presumptive taoiseach Simon Harris is set to face a renewed push from within his party to front-load moves on business supports before the summer as Fine Gael seeks to shore up support among small firms and their owners.
Some in the party are even privately of the view that Mr Harris should consider a break with convention and introduce taxation changes before the budget — with targeted reductions in VAT and employer’s PRSI for certain under-pressure sectors.
While the Coalition is rolling out a €250 million rates refund, Fine Gael backbenchers and Ministers are urging Mr Harris to go beyond already-announced measures.
They are facing criticism from employers over increased costs of doing business which they blame on recent Government interventions on sick pay, minimum wage and the forthcoming introduction of pensions auto-enrolment.
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Ministers believe there is a need to change operating costs that have been increased by Government actions. This could include introducing tax changes outside the normal budgetary cycle by bringing forward a finance Bill, which usually only follows the budget.
“There’s an opportunity to do something mid-year and I think we can bring a finance Bill into the summer,” said one Minister privately. A second agreed there was a political case to do so, but warned that it would depend on the proposal. Measures would also have to be targeted so as not to give undue benefit to firms that do not need support.
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Such a move would likely face resistance from within the Department of Finance where officials are hostile to deviations from the established budgetary process.
Emer Higgins, the Dublin Mid-West TD who has been tipped as a potential junior minister, said it would be “ideal” to implement changes before the budget, adding that a commitment needed to come beforehand. “Even if it is not possible [before the budget], we need to signal intent,” she said. “If you’re able to give them certainty about measures coming in to support them, that would give huge clarity to employers,” she said.
Cork southwest Senator Tim Lombard said there was a long-term policy required to look at how PRSI affected small businesses and argued the VAT rate for accommodation and food and beverage should be split with a lower rate for the latter.
“If it’s not going to happen in the next few months, pre-announce that it will be a priority for the budget, one or the other,” said Senator Lombard.
Mr Harris signalled openness to revisit proposed hate speech legislation, another target of backbencher ire, on Monday, saying there are “legitimate questions” surrounding its content, for which he expects “revisions”. On Monday, former minister for justice Charlie Flanagan said the legislation “should be brought back to the drawing board”.
More SME-friendly supports and tax cuts have been a long-held goal of the Fine Gael parliamentary party, but Mr Harris’s sudden elevation has sparked hopes among backbenchers that a renewed push may bear fruit. He is expected to meet Minister for Public Expenditure Paschal Donohoe in the coming fortnight on macroeconomic matters as well as political and policy plans.
Mr Harris is finalising his backroom team, with former adviser Joanne Lonergan tipped heavily to return, alongside a policy adviser on economics, something done by Enda Kenny but abandoned by Leo Varadkar. A part-time position, perhaps drawn from academia, has been discussed, with professors in economics Stephen Kinsella and John McHale among names being discussed.
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