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Dublin: 4°C Tuesday 1 December 2020

FG and Labour launch alternative budget proposals

Fine Gael would hold off on increases to income tax until the economic recovery creates new jobs, according to its budget plan.

Enda Kenny (left) and Eamon Gilmore will have some work to do reconciling their economic policies if they are to form a coalition.
Enda Kenny (left) and Eamon Gilmore will have some work to do reconciling their economic policies if they are to form a coalition.
Image: Niall Carson/PA Archive

FINE GAEL AND LABOUR have this morning published alternative government spending proposals, with Fine Gael outlining its alternative to the four year budget plan while Labour has published its own proposals for next week’s Budget and for the medium-term future.

Fine Gael’s plan – intended to act as a substitute for the government’s National Recovery Plan if it is put in power following the next general election – aims to create 100,000 new jobs within the period of the original plan, while still bringing the budget deficit to within 3% of GDP – within Europe’s limits – and achieving the €15bn of budget adjustments needed.

Among the other key policy planks of the plan (PDF link) are the closure of ‘tax loopholes’ for the rich, which it believes will raise €404m next year alone, reform of the social welfare system to eliminate what it estimates as a €3bn annual bill for social welfare fraud, and reform of tax relief on pension schemes.

Tax relief would be cut on schemes offering pensions greater than €60,000, while “protecting pensions relief for middle income families”, while income tax increases would be put off until the country had experienced a degree of economic recovery.

Job growth would be achieved by abolition of the travel tax, subject to negotiations with Aer Lingus and Ryanair on the introduction of new routes, abolishing PRSI paid by employers on staff earning less than €356 a week, and a cut in the “jobs tax to encourage people off welfare into work” – a move that would replace the cut to the minimum wage.

Unlike Fine Gael, which would still seek to introduce €6bn in adjustments in the 2011 Budget, Labour’s Budget plan (PDF link) would seek €5bn in adjustments in the 2011 Budget, which would include a €500m job creation fund. Doing so, it claims, would enable it to seek prudent budget cuts while also stimulating the economy.

Labour also proposes to negotiate a three-year wage freeze, would establish a Fees Commission “to investigate and control professional fees”, and proposes to end upward-only rent reviews.

It also proposes the establishment of a Strategic Investment Bank, set up as an independent commercial operation with €2bn in initial funding from the National Pension Reserve Fund, which would also issue bonds aimed at seeking investment from citizens and diaspora.

The party also wants to introduce a ‘Graduate and Apprentice Work Placement Scheme’, which would operate a web-based scheme allowing new graduates to link up with potential employers and bring them into the workplace, or into voluntary and community work.

Labour also proposes Dáil reforms including an increase in sitting days, the introduction of a petition system,

About the author:

Gavan Reilly

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