FIANNA FÁIL SAY they would make an overall adjustment of €220 million in next week’s budget, including €361 million in net new tax measures.
The party’s pre-Budget submission, which has just been released, states that a Fianna Fáil led Government would also seek €290 million in cuts to public sector spending through “targeted efficiency”.
The document states they would also begin “immediate action to secure a reduction in the interest bill on Ireland’s IMF loans yielding a saving of €300m”.
Based on data currently available, we believe our overall adjustment of €220m would result in the deficit falling comfortably below 3%.
The proposals contrast with the plan set to be announced by Finance Minister Michael Noonan next Tuesday.
While the Government’s initial position was that a further €2 billion adjustment would be needed, Noonan has said several times recently that this is no longer necessary and that next week’s package of measures will be broadly neutral.
Tax
Ministers have also been hinting that tax cuts will be on the cards, and in his latest public comment on the matter last night, the Taoiseach told business leaders that this year’s announcement would be the “first step” towards lowering the top 52 per cent income tax rate.
There are no such promises in the Fianna Fáil plan. According to Chapter 8 of the 36-page document:
Everyone agrees on the need to reduce the tax burden particularly on struggling families. However we are still at the early stages of economic recovery. Across the board income tax reductions at this early stage would not be prudent.
The party says it would be “more prudent to wait twelve months before introducing significant changes to the tax regime”.
A simplification of the tax code is proposed, including a facility to allow lower paid workers a partial PRSI refund.
Action would also be taken to make the Local Property Tax and water charges fairer, according to the FF plan…
Our commitment is to examine the structure of both the local property tax and water charges to introduce a greater degree of fairness linking them to ability to pay.
“As an interim measure, we propose extending the €100 payment to assist with water charges to the 211,000 households in receipt of the fuel allowance payment.”
A new levy on sugary drinks would also be introduced and excise on tobacco increased.
Social housing
On the issue of housing, the party says that that €1 billion of the €2.5 billion or so “that the Ireland Strategic Investment Fund is sitting on” should be allocated for the construction of social housing.
Upwards of 6,500 units could be made available with such a move, it’s claimed.
Additionally:
We are proposing an additional €100m be allocated for social housing through the local authorities capital programme in 2015.
The party’s also proposing the provision of 20,000 new discretionary medical cards and the recruitment of 500 additional gardaí. A Fianna Fáil government would also bring in an increase in the living alone allowance of €5 per week.
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