Tax cuts in FG budget proposals

Wed, Nov 18, 2009, 00:00

FINE GAEL last night unveiled some of its alternative proposals for the upcoming budget by saying it would introduce tax cuts totalling €900 million to protect jobs.

The party's deputy leader, Richard Bruton, said that in government it would cut the rate of employers' PRSI by a fifth for those earning over €18,000 and by half for those earning the minimum wage and less.

The cuts, which would cost the exchequer almost €900 million, would be fully financed by broadening the tax base, he said.

Funding for the initiative would come from carbon tax (€480 million); a windfall tax on power generation (€200 million); and the abolition of the employee PRSI allowance and €75,000 ceiling (a yield of €470 million).

Some €250 million extra would be raised from these three measures, he said, which would be available for deficit reduction and other job policies.

The announcement came during the Fine Gael response to yesterday's pre-budget debate in the Dáil initiated by the Government. In the course of the four-hour debate, a procession of Government speakers, including Taoiseach Brian Cowen and Minister for Finance Brian Lenihan, accused the two main Opposition parties of accepting the need for €4 billion in adjustments but refusing to specify how they could be achieved.

Both Fine Gael and Labour refused to specify details of their own pre-budget plans except for what was announced yesterday.

Labour contended that the Government was playing a game of political bluff and pointed out that Mr Lenihan has released no specifics to date of his own plans for the budget on December 9th.

"The Taoiseach wants the Opposition parties to reveal their hands long before he reveals his own," said deputy Labour leader Joan Burton.

"It's like asking Giovanni Trapattoni to show his tactical notes to his French counterpart a full 24 hours before the Paris game starts," she added.

Both parties said that they would set out their full budget perspectives after the next monthly exchequer figures are announced on December 2nd. November is the most important month of the year for taxes as it includes self-employed returns and substantial VAT and corporate tax returns.

Labour said last night that it agreed with €4 billion in adjustments but that some must come from revenue and not just from cuts.