FIANNA FÁIL’S FINANCE Spokesperson Michael McGrath has warned people not to be expecting too much in this year’s Budget.
Talks between Fianna Fáil and Fine Gael are going down to the wire ahead the Budget next Tuesday, with meetings between the two parties scheduled to be held throughout the weekend.
At the launch of Fianna Fáil’s budget document, McGrath indicated that tax reductions would be “modest”.
However, he did outline (what is already largely known) that there will be a further reduction in Universal Social Charge (USC).
McGrath said it is in the confidence and supply agreement between Fianna Fáil and Fine Gael, and he is confident it will be achieved. He also indicated it would be in or around the 0.5% reduction his party has been pushing for.
People’s net pay should be increased at a “very gentle pace”, he added.
Fine Gael are keen to extend the tax rate in which workers pay the higher rate of tax, pushing it out by €1,000.
However, the government will have to raise revenue from somewhere in order to extend the tax bands and reduce USC.
Revenue-raising measures
“Doing both requires raising extra money, that is the simple reality, they are costly,” said McGrath, who pointed out if the government can find the money somewhere, they’ll support both measures.
However, he said extending the €33,800 tax band by €1,000 costs in the region of €2oo million per year. McGrath said Fianna Fáil want to ensure there is fairness and balance across all income earners in next week’s Budget.
While he said it is important people get a break, he also wanted them to be realistic.
Hitting out at Fine Gael, he said it was not Fianna Fáil that had been over promising and “egging up expectations”.
Outlining some of their priorities, Fianna Fáil’s Public Expenditure and Reform spokesperson, Dara Calleary said the party favours rises in the State pension, payments to carers and those with disabilities, as well as housing initiatives.
McGrath said progress in housing and health has been “abysmal” but added that Fianna Fáil are using their influence to change it.
He also said the government is due to publish its report on the Help-to-Buy scheme on Budget day – but would not go into the detail of the report.
Fianna Fáil has been calling for the scrapping of the first-time buyers grant, which was introduced under the former Housing Minister Simon Coveney, as it believes it has resulted the rise of house prices.
He said Fine Gael’s response should be consistent with the findings in the report. The finance spokesperson said the report should have been done before the scheme was introduced, adding that not doing so was a “mistake on behalf of government”.
When asked about a package for those on social welfare, Calleary said “it won’t be miserly”.
Calleary said they are treating their discussions with government in a professional manner, telling reporters that the talks that are underway “are about people’s lives”.
“They are not idle gossip.”
On the issue of the tourism 9% VAT rate, Fianna Fáil said it would be in favour of keeping it in place in light of Brexit, however, McGrath pointed out the government need to find revenue-raising measures.
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