Fianna Fáil Finance spokesperson Michael McGrath has called on Fine Gael to urgently explain a massive hole which has opened up in their budgetary projections.
Deputy McGrath commented, “For the last couple of weeks Fine Gael have been trying to have it both ways. On the one hand they are talking about massive tax cuts and having taxes as low as we can afford them.
“However having been stung by their lack of concern for investment in public services Fine Gael undertook a change of tack at their Ard Fheis last weekend and Minister Noonan told us “what we are promising on USC is over five years we’ll abolish it and it will take less than 30% of the available fiscal space. The remaining fiscal space will be used for expenditure.”
“There was a new twist in the tale yesterday when Michael Noonan announced plans to “leave a quarter of the available fiscal space unallocated as a Contingency and Stability Reserve.”
“It seems the Minister for Finance was talking off the top of his head as it is simply not possible to abolish the USC, put 70% of the available fiscal space into services and still keep 25% for a rainy day.
“Minister Noonan’s own budget figures show the impossibility of what he is proposing. According to the document Minister Noonan published there is €8.6bn of net fiscal space available over the next five years. If tax bands are not indexed in line with inflation this increases the amount available by €2bn to €10.6bn.
“However Fine Gael’s tax package as announced is going to cost €4bn. If this represents 30% split with expenditure they need to have €13.3bn available plus an additional €3-€3.5bn for their proposed Contingency Reserve. This is simply impossible. Fine Gael need to accept that it cannot do all of these measures and explain clearly which proposals they will not go ahead with,” concluded Deputy McGrath.