FINE GAEL MINISTER Paschal Donohoe has indicated a preference for cutting taxes in the forthcoming Budget as Labour minister Ged Nash called for a “wage-led recovery”.

With the two coalition parties set to enter intense Budget negotiations in the coming weeks ministers on both sides have been setting out their parties’ stall.

Speaking in Dublin today, Transport Minister Paschal Donohoe indicated a preference for cutting tax, pointing out the impact the Universal Social Charge has had on people on low and middle incomes.

Yesterday, his Fine Gael colleague, Jobs Minister Richard Bruton, said he did not believe now was the time for wage increases.

This position contrasts with Labour’s Ged Nash, the super junior minister in Bruton’s department, who told today’s Irish Independent that economic recovery should be accompanied by wage hikes.

Speaking on RTÉ’s News at One, Nash said that there had been “modest pay increases” in some sectors of the economy in recent years.

“There is a requirement on successful employers to work with their staff to move towards a situation where they are talking about pay increases for productivity gains,” he said.

The Louth TD said increasing pay across all various sectors of the economy would see a greater economic recovery claiming that yesterday’s positive CSO figures could be traced back to wage increases.

He insisted “nobody is talking about trying to impose pay increases on firms that couldn’t possibly afford that at this stage”.

Nash also said that the government’s Low Pay Commission, which will examine the suitability of the current minimum wage of €8.65 an hour, will be established “very shortly”.

Earlier, Donohoe told reporters that measures introduced in the October budget must be affordable both now and in the future but emphasised the impact of USC on working people, indicating he favours a tax cut.

“I’m very much aware that for many people, if they agree to do an extra hour of work, for the €10 they will earn due to doing that – if that’s what they’re paid – they’ll take home just over €5 of that and that’s something that as the economy recovers that we have to address,” he said.

He said that creating jobs is “the ultimate engine of wages going up and standards of living going up for absolutely everybody”.

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Read: ‘Budget 2015 should give money back to consumers’