The savings scheme announced yesterday by Mr McCreevy has all the hallmarks of an ill-conceived half measure, Fine Gael's deputy leader and spokesman on finance, Mr Jim Mitchell, said.
"The fact that the proposal is not included in the Finance Bill, being merely set out in his press release, indicates that this is a late political reaction to recent EU criticisms," he said.
The Minister's announcement was the first sign of the Government reversing its fiscal policy of priming demand, said Mr Mitchell.
"The Minister's policies are clearly at sixes and sevens and at cross-purposes with each other," he said.
"At first glance, the savings provisions proposed seems to be riddled with difficulties and has the potential to be a bureaucratic nightmare and provides plenty of opportunities for creative accounting and money switching."
With the proposed scheme being primarily operated by banks, it is likely that they will be the biggest winners, he said.
"The Exchequer could end up paying out hundreds of millions of pounds without achieving any discernible increase in savings," said Mr Mitchell.
Labour's spokesperson on finance, Mr Derek McDowell, described as "unfair" the provision to introduce favourable tax treatment of share options.
"The proposals in the Finance Bill fall short of what is required," he said. "Effectively, the provisions in the Bill allow big companies to pay large salaries at a reduced rate to a small number of well-paid workers."
Mr McDowell criticised the provision on share options on three grounds. The absence of a limit means that the scheme is little more than a tax-avoidance scheme for the better-off, he said. "Up to 30 per cent of share options can be reserved for key workers. In all likelihood this will mean that management will take a large part of their remuneration at 20 per cent tax," said Mr McDowell.
The scheme should have been introduced in tandem with other profit-sharing or gainsharing arrangements, he added.
The Finance Bill has also been criticised by the Green Party, which accused Mr McCreevy of abandoning the poor.
"Charlie McCreevy's savings scheme, without measures to ensure social equity, do little more than `rub salt in the wound' to those who are marginalised by the Celtic Tiger," said its finance spokesman, Mr Trevor Sargent.
He also expressed concerns that there was every possibility that people may avail of the tax incentives to save to a level which they were going to save anyway and use the additional money for spending which would help only to fuel inflation.
But the Tanaiste, Ms Harney, described the savings scheme as a very powerful and innovative savings initiative, which will help to combat inflationary pressures.
