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Donohoe warns against next government increasing income tax

The finance minister said the country faces a period of high unemployment.


Pascal Donohoe (Brian Lawless/PA)

Pascal Donohoe (Brian Lawless/PA)

Pascal Donohoe (Brian Lawless/PA)

Finance Minister Paschal Donohue has cautioned against the next government increasing income tax when the country is suffering high unemployment.

Government formation discussions between Fianna Fail, Fine Gael and the Green Party are ongoing this week, 101 days since February’s inconclusive general election.

On Friday, the Labour Party said it would not join the talks, adding that it was unrealistic to rule out income tax increases.

Speaking at Government buildings on Tuesday, Fine Gael’s Mr Donohoe said he agreed with Taoiseach Leo Varadkar who suggested he would prefer to increase carbon tax.

“It is our view that increasing taxes on income during a period when incomes are falling and unemployment is high is not the right way to get people back to work,” Mr Donohoe said.

“It is my view that the defining needs that the next government will have to respond back to in the early years of its formation will be getting Ireland back to work and getting our Live Register down.

“In relation to what other taxation choices might be made, that is going to be a matter of engagement with our colleagues from the Green Party and Fianna Fail in the context of the programme for government.

“I’m sure different parties will have different views on how we deal with those issues and I think do them the courtesy of having those discussions first.”

Mr Donohoe said Fianna Fail and Fine Gael have resolved a weekend row over planning for a general election.

On Sunday, some Fianna Fail TDs criticised the caretaker Fine Gael-led administration after it emerged officials were making contingency plans for another election if the negotiations to form a new government fail.

Fine Gael defended its contingency planning and accused the Fianna Fail TDs of “damaging” government formation talks.

Mr Donohoe said “all of the creases and wrinkles have been ironed out” and the parties have moved on from the row.