Labour taxes to cost €1,300 extra per family, says FG

FINE GAEL yesterday struck back at sustained Labour Party criticism of its fiscal plans by claiming Labour taxes would cost each household an extra €1,300-plus each year.

Labour described the claim as spurious and counterclaimed that Fine Gael’s plan had hidden taxes and cuts that would cost families €1,000 more each year.

There was a significant intensification of the dispute between the two main Opposition parties yesterday, with both ratcheting up their attacks against the other’s tax and fiscal policies.

At the same time, senior figures in both parties yesterday acknowledged that the two are likely to form the next government.

Fine Gael leader Enda Kenny and party finance spokesman Michael Noonan delivered withering criticism of the series of “attack ads” placed by Labour in newspapers this week.

They also dismissed the charge, repeated by Labour leader Eamon Gilmore yesterday, that there were hidden costs and stealth taxes in the Fine Gael plan that amounted to almost €2 billion.

Mr Kenny, canvassing in Kerry, described the attack ads – which distort the the Tesco logo and read “Every Little Hurts” – as “rubbish” and beneath contempt.

Mr Noonan, speaking at a news conference, dismissed as “farcical” and “derisory” the Labour charge that there was a €5 billion hole in its economic plan.

Responding to the attack ads, he said: “This is going to be very difficult. The IMF are in. We have lost our sovereignty. There aren’t any soft options any more. It’s going to be dreadful upfront for a lot of people and we are trying to protect the most vulnerable.”

He derided Labour’s claim in one of the adverts that Fine Gael would increase the tax on a bottle of wine. “To be taking ads in national papers deploring the fact that the big bad wolves of Fine Gael are putting an extra €1 on the bottle of wine . . . seems to me to be derisory,” he said.

Mr Gilmore, canvassing in the northwest, portrayed Fine Gael as the “stealth tax” party. “Fine Gael is proposing similar cuts that the Conservative Party introduced in Britain, which led them into a recession,” Mr Gilmore said.

“What this is about is whether or not people are going to have opportunities for employment; or whether families in this country are going to be screwed by austerity measures that Fine Gael intends to introduce through their stealth taxes,” he added.

Later, Mr Noonan issued a statement outlining the basis for his claim that Labour was a high tax party and would impose €1,361 in additional taxes per annum. He said the EU made it clear that it would not lend Labour the €5 billion to extend the deadline to 2016 and reduce the deficit by €7 billion, rather than €9 billion, by 2014. “They will have to reduce the deficit by €9 billion, whatever they might say now,” he said.

He said based on its 50-50 share of cuts and tax increases, Labour planned €2 billion more taxes than Fine Gael. He claimed Labour would impose more than €3,062 per household in extra taxes compared with €1,701 for Fine Gael – a difference of €1,361.

Labour’s social affairs spokeswoman Róisín Shortall responded last night by saying that Fine Gael had planned for €1.68 billion of new stealth taxes and hidden cuts.

She said this would comprise a €250 million cut in child benefit; €325 million in water charges; €500 million in graduate taxes; €250 million in local government charges and €360 million in cuts in welfare payments to those who have lost their jobs.

Fine Gael has admitted its total tax increase will be €2.44 billion. When added to the €1.68 billion, this amounts to €4.12 billion. “These stealth taxes and cuts represent an average €1,083 additional burden on families. This is on top of the €1,575 they have already admitted they will take off households each year. This amounts to a total of €2,658,” she said.

She also rejected the claim by Fine Gael that Labour would increase the national tax bill by €4.5 billion. “It is a work of fiction and is not based on any Labour Party document,” she said.