Ireland’s finance minister has ruled out income tax increases despite pledging to increase public spending to deal with Covid-19.
Paschal Donohoe has denied accusations a framework document drawn up by Fine Gael and Fianna Fail to encourage smaller parties to join them in a coalition government “is a blank cheque”.
The document contains commitments that there will be no increases in income tax over the lifetime of the next government and promises to speed up the delivery of social and affordable housing.
Speaking to RTE radio, Mr Donohoe said: “I don’t accept the accusations of blank cheques within this particular document.
“It is not a programme for government.”
“We are going to be in a position when we exit Covid-19 where a very large majority of people in our country will either be facing lower incomes.
“We have 800,000 people on the live register or receiving some form of pandemic unemployment supports.
“The idea that increasing income tax or USC flies in the face of our success between 2011 and 2016 when we managed to fix the unemployment crisis.”
“We are going to be entering a phase where we borrow more money this year and next year.
“Our ability to sustain that is due to the fact that my party and I got the country to a point where we were in surplus.
“If you look at the kind of things that can create cost and you look at what we say in the document in relation to capital expenditure.
“We want to prioritise capital expenditure which we do.
“The document says we are committed to Slaintecare and building more houses.”
“In our last budget before an election we had a budget that had no tax reductions and no social welfare increases, a budget that was without political precedent in our country.
“If you look to the issues in this document compared to our general election manifesto, we were making commitments to increase social welfare and tax deductions.
“Those are absent in the document we are discussing today because we accept the reality has changed.”
“If we have a government that can last five years, it will be dominated by how we are going to deal with the holes in the economy as a consequence of Covid-19 and the economic consequences of it.”