Budget adjustment should be €2.4bn, says Fianna Fáil

Fianna Fáil has said the adjustment in next week's budget should be €2.4 billion and that a 50/50 mix of spending cuts and tax hikes should be pursued to reach the target.

In its pre-budget submission, Fianna Fáil calls for a 15 per cent levy on alcohol sold in shops and off-licences, a “junk food tax” on foods high in sugar and salt, for an extra €1 to be added to the price of a box of 20 cigarettes and for both capital gains and DIRT tax es to be increased by 2 per cent to 35 per cent.

It said PAYE workers eaning above €100,000 should pay 10 per cent USC in 2014 and that tax credits should be removed for PAYE and self-employed workers earning more than €150,000

Tax relief on pensions should be capped at a maximum of €60,000 per annum

a lid levy of 15 per cent should be applied to alcohol sales in shops and off licences and could raise €180 million in a full year, according to the submission.

Fianna Fáil said it had excluded the property tax from its calculations as the tax was unfair and would damage the domestic economy when fully implemented in 2014.

On the expenditure side, Fianna Fáil warned against cutting education, disability and mental health spending and said savings must be raised in a more progressive manner than the last two budgets delivered by the Coalition.

The €350 million savings envisaged from the Haddington Road agreement accounts for almost one third of the party’s expenditure proposals, with a different approaches to how the State buys drugs, pays interest on national debt and enagegs in procurement processes potentiall saving a further €465 million next year.

By following its plan, Fianna Fáil said the Government should return a budget deficit for 2014 no greater than 5 per cent, a figure 0.1 per cent below the troika target and 0.2 per cent higher than what the Coalition is hoping to achieve with a €2.5 billion budget package.

“It is imperative that families are given a break from the never ending cycle of tax rises and cuts to services,” Fianna Fáil finance spokesman Michael McGrath said.

“The key issue for us is that the Government must learn from the mistakes of the last two budgets which hit harder on low income earners.”

Fianna Fáil’s enterprise spokesman Dara Calleary said it was important that entrepreneurs were incentivised with the same priority that is given to foreign direct investment and that increasing PRSI on the self-employed, a measure said to be under consideration by Minister for Social Protection Joan Burton, should be opposed.