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FF Ard Fheis rejects motion to abolish the USC, minister says new 30% tax rate under review

The event takes place in the RDS in Dublin today with Taoiseach Micheál Martin due to give his speech at 6.30pm.

Updated Oct 1st 2022, 2:16 PM

THE FIANNA FÁIL Ard Fheis has rejected a motion calling for the Government to move towards abolishing the Universal Social Charge (USC).

Capping civil servants salaries, abolishing the USC and setting up a dedicated Garda transport police were just some of the motions voted on today at the party’s event in the RDS.

Speaking about the proposal to abolish the USC, Public Expenditure Minister Michael McGrath said it’s not currently Government policy to move towards abolition.

He said the USC brings in the region of €4 to €5 billion a year.

“In line with the programme for Government, which we have negotiated, which the party has endorsed, our focus is on income tax and continuing to increase credits, continuing to increase the entry point at a higher rate,” said McGrath.

Increasing tax credits is the Government’s intention into the future, he said. 

“We will continue with that policy during the lifetime of this Government, continuing to reduce the burden on middle income workers in particular.

“There is a limit to what you can do through tax alone for people on quite low levels of income. And that’s why you need to address other issues like the cost-of-living, the cost of childcare, the cost of education, the cost of health, the cost of transport, and so on. But I think it is important we would protect the taxation base, and not narrow it unnecessarily into the future,” he said.

McGrath said there is a commitment to examine the idea of a third tax band, as proposed by Tánaiste Leo Varadkar.

“We have given a commitment in the context of the budget to examine what the impact would be of a third rate of income tax. So we will conduct that analysis over the coming months to see if it has merit, what are the pitfalls in terms of margin rate relief on pension contributions, and so on.

“But we’ll come to a view on that in the months ahead and make a final decision then in advance of the budget next year,” said the minister.

In addition, the party also accepted a motion to reject the Taxation Commission’s recommendation on inheritance tax.

Fianna Fáil party

The party Ard Fheis is being seen as an opportunity to refocus on the party’s ambitions, particular ahead of the Taoiseach’s rotation in December, when Fine Gael’s Leo Varadkar will take over from Martin. 

While the party’s identity and what it stands for will be a key pillar of discussion, attention will also be paid to the party’s communications, which has been described as poor. This weekend politicians can even avail of social media training, such as how to be “authentic online”. 

The motions at any Ard Fheis give an insight into some of the issues that the party’s cummans are concerned about around the country. 

This year, there were also motions calling for the establishment of a dedicated Garda Public Transport Unit to tackle antisocial and criminal behaviour on rail, bus and LUAS services – something the Taoiseach has already said he will raise with the justice minister. 

Other calls include asking the Minister for the Environment Eamon Ryan to renew the grants for window and door replacement, separate to other insulating packages/schemes, so that the general public can afford to upgrade their houses in stages.

There were also calls for the removal of the penalty incurred by people who pay their motor tax in instalments as well as a call for a root and branch review of the ESB, its regulator and our energy regulatory system. 

fianna fail 65

Last night, Martin opened the 80th Fianna Fáil Ard Fheis.

In his opening address, he said that there could be no certainty that the war in Ukraine will be over soon, adding that how energy markets will change is largely unknown. 

“Urgent action to develop Ireland’s own clean energy industry is not an option – it is a necessity. And we also have to be ready to take more action next year if we have to.

“That’s why it is critical that we have financial reserves in place – and it is also why we are working so closely with other European countries on how to keep prices down, increase supply and protect households and businesses.

“And let there be no doubt, we will not countenance energy firms making huge new profits on the back of this crisis. Action at a European level is progressing fast, and we will add to this with our own actions if they are necessary,” said Martin.

The Taoiseach’s address to the Ard Fheis will be broadcast on RTE at 6.30pm.

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