FG deputies concerned over Labour cuts plan

 

A number of Fine Gael TDs have expressed concern about the possible impact two Labour Party policy initiatives may have on middle-earners and the farming community.

Minister for Social Protection Joan Burton will present a report to the Cabinet today setting out a number of ways in which child benefit payments can be reduced.

While many Labour TDs have publicly said they support some form of taxation for child benefit, there has been a much cooler response from Fine Gael backbenchers.

It was expected that Minister for Education Ruairí Quinn would also bring proposals to broaden the scope of the means test for entry into third-level colleges.

Ahead of the announcement, farming organisations and rural Fine Gael TDs have asserted they will strongly oppose any measures that will include farm assets in the assessment criteria.

Universal payment

Ahead of today’s meeting, Ms Burton said the 2011 report by a group chaired by Ita Mangan recommended the retention of “a strong universal payment” to all families.

The report, which will be published today, raises the possibility of taxing the benefit but describes as preferable a two-tier system of paying a flat rate benefit, supplemented by top-ups.

Speaking in Dublin yesterday, Ms Burton said it was important to recognise child benefit as “very important to parents, it’s very important to women who are 96 per cent of the recipients as the caring parents, it’s a huge factor in family budgets”.

In the last budget, the child benefit rate was cut by €10 to €130 for the first two children and by €18 a month for the third child, yielding a saving of €140 million.

The benefit is paid to 600,000 households and costs the State close to €2 billion a year. The across-the-board nature of the cut caused particular difficulties for Labour TDs.

While most Labour TDs favour taxing benefit, a number of Fine Gael TDs contacted yesterday expressed concern about the impact on middle-income families.

Uncomfortable

Alan Farrell (Dublin North) said he would be uncomfortable with reducing levels any further and pointed out the huge costs of introducing a means test.

Noel Harrington (Cork South West) said a taxation system could be “very punitive on low to middle-income earners including public servants. They would be crucified under that system.”

He said setting a high bar for the means test might get a better political result. That view was echoed by Brian Walsh (Galway West) who said it was preferable over taxation.

Tom Hayes (Tipperary North) and Michelle Mulherin (Mayo) also argued it would affect middle-income families, who might look asset-rich. “Middle Ireland is being creased for everything,” said Mr Hayes.

There is strong resistance within Fine Gael to farmer’s assets being included in a means test for third-level student grants.

It was raised at last week’s party meeting by Waterford TD John Deasy who said it was not possible to impute a farmer’s income or means from the size of their holdings or assets.