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Budget 2014

Labour TD says protect social welfare, but FG TD says spending is not sustainable

Two government backbenchers have outlined vastly different approaches to Budget 2014 in columns for in the last 24 hours.

DIVISIONS BETWEEN BACKBENCH government TDs over the scale of the budget adjustment next month continue with one Labour TD saying the social welfare spending should be protected while a Fine Gael deputy believes current expenditure is unsustainable.

Writing for yesterday Fine Gael TD Pat Deering argued that it is “very important” that the government pushes ahead with the €3.1 billion adjustment in the face of calls for promissory note savings to be used to lessen the amount of austerity.

However writing for this website today, Labour’s Kevin Humphreys says: “An unnecessary €3.1 billion adjustment, as some in Fine Gael have proposed, would result in lower growth and loss of confidence.”

Government backbenchers have publicly clashed in recent weeks with Labour TDs arguing for the €1 billion savings achieved from the promissory note deal to be used to lessen the long-proposed €3.1 billion adjustment.

But some in Fine Gael argue that this adjustment should be pursued in order to get the deficit down to 3 per cent of gross domestic product (GDP) as soon as possible.

‘Gang of eight’


Deering, a member of the so-called ‘five-a-side club’ of Fine Gael backbenchers who have openly spoken out on issues such as the public sector pay deal in the past, said that pushing ahead with €3.1 billion of cuts is essential “because the higher the deficit remains, the more exposed we are to international financial events beyond our own control”.

He also said that current social welfare spending is not sustainable, claiming that for every person in receipt of social welfare it is costing the State €20,000.

“In my opinion the €20 billion that is spent on social welfare year-on-year is not sustainable and needs to be addressed,” he said.

By contrast, Humphreys – who along with four other Labour TDs has criticised ‘austerity junkies’ in Fine Gael arguing for cuts – writes for today that “core social welfare payments” must be protected.

“The Promissory Note savings of €1 billion should be deployed to protect the Departments of Social Protection, Health, Justice and Education from further cuts,” he says.

‘Stamp duty on trophy houses’


Humphreys, a Dublin South East TD, also says that income tax take could be increased without raising rates “by restricting reliefs that benefit the wealthy”.

“Increasing stamp duty on trophy house sales, and a domicile levy of €300,000 should also be on the menu,” he writes.

However Deering, a TD for Carlow-Kilkenny, wrote yesterday that working people “are not in a position to pay any more tax”.

“These people have made their contribution to society and the rebuilding of our economy,” he wrote. “Next year will be the first full year of the property tax, with water rates following in 2015 and I feel there is no more room for taxes.”

The deputies’ comments come with just over a month to go before Budget 2014 is revealed.

Finance Minister Michael Noonan has said that exact details on the scale of the adjustment will not be decided until nearer the day.

Pictures: Sasko Lazarov/Photocall Ireland and Fine Gael Flickr

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Labour TD: ‘Now is not the time for excessive cuts that will damage our recovery’

Fine Gael TD: ‘It is essential that we push ahead with the €3.1bn budget cut’

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