Belfast Telegraph

Saturday 30 August 2014

Parties set out alternative budgets

Fine Gael and Labour have outlined their alternative budgets

Potential coalition government partners Fine Gael and Labour have outlined their alternative budgets, with the two parties at odds on radical tax reform.

Labour called for a new third 48% rate of tax for the biggest earners but Fine Gael claimed the new band would impede job creation, enforce emigration and put off multinational executives from coming to Ireland.

Fine Gael said their plan would save 5 billion euro, create 100,000 jobs and collect 1 billion euro more in tax. Labour said its reforms could save 4.5 billion euro by hitting top earners on more than 100,000 euro a year and slashing the public sector pay bill by 1.4 billion euro by 2014.

Michael Noonan, Fine Gael finance spokesman, said he did not believe that the Government can tax its way out of the recession.

"I don't share the view that the country is banjaxed," he said. "I think we in a difficult position but I think with a proper portfolio of policies that stimulate growth in the economy and give us job creation, we can work our way out of this. It will be tough but achievable."

Labour leader Eamon Gilmore said the Government's plan to make 6 billion euro cuts in one year was dangerous for Ireland. "It poses an unacceptable risk to jobs and growth," Mr Gilmore said.

Fine Gael said their approach would be to narrow tax bands, remove credits and savage any remaining tax breaks in the property sector. It will also close down Fas and the Health Service Executive and reduce TD and Senator numbers by 35%.

Mr Noonan said Fine Gael would take money "by and large" from those who can afford it. Party leader Enda Kenny conceded he believed the Government's plan was moving the country in the right direction but more could be done.

"There is a better way, and a fairer way, than anything offered by the current failed Government. Fine Gael will make jobs and economic growth a precondition, not an aspiration," Mr Kenny said.

Labour's plan was headlined with the new 48% tax rate for a single worker on 100,000 euro or married couple on 200,000 euro. They also plan to cap public sector and political salaries at 190,000 euro and increase the tax on savings.

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