THE TAOISEACH and the Fine Gael leader became embroiled in a pre-budget row last night when Brian Cowen accused Enda Kenny of seeking to deceive the electorate on the issue of taxation rates.
In his keynote speech to the Fine Gael ardfheis in Citywest at the weekend, Mr Kenny said that, in government, the party would “return the public finances to stability by 2012 – without increasing the standard and current top rates of income tax”.
Speaking to the Irish media at the EU-US summit in Prague, the Taoiseach accused his opposition counterpart of “trying to cod people”.
“The deterioration in our public finance position means we have to take some strong actions and it has to be including the revenue side, and any suggestions to the contrary at home are simply trying to cod people,” Mr Cowen said.
Responding on RTÉ's The Week in Politicslast night, Mr Kenny referred to Fine Gael's proposal for a "temporary solidarity tax" of 2 per cent on incomes over €100,000 and 4 per cent over €250,000.
When it was put to him that he had not referred to this in his ardfheis address, he replied: “I didn’t have time to mention a lot of other things either.”
Separately, trade unions last night said it was unlikely that a comprehensive agreement on a national recovery plan would be agreed by the social partners in advance of the budget. Union, employer, and Government representatives met over the weekend and will meet again today.
However, the general secretary of the Irish Congress of Trade Unions, David Begg, said it is likely that the parties will have to pick up the issues after the budget. He said they will try to “nail” as much of it as they can in talks today.
The Government last night showed unions an outline document on economic recovery which was based on a framework agreement reached between the social partners in January. However, Mr Begg said it didn’t have “hard concrete specifics”.
The Taoiseach remained in touch with proceedings from the EU-US summit in Prague. He returned to Dublin last night and will chair a further Cabinet meeting to finalise the proposals in the emergency budget this afternoon. In his budget speech, which will be shorter than usual, Minister for Finance Brian Lenihan is expected to announce an increase in the current income levies rather than an immediate rise in taxation rates.
The Government is keenly interested in a proposal for a new State investment scheme, with a guaranteed rate of return for investors, whereby Irish pension funds would provide capital to build schools, roads and hospitals.
Originally proposed by the Construction Industry Council, an umbrella group for the industry, Government sources said the scheme would take the form of an investment bond and could provide funding for projects such as the cystic fibrosis unit at St Vincent’s Hospital, Dublin.
The budget will not include a specific proposal for an asset management agency or “bad bank” as a plan for this was “not ready” at this time, senior political sources said. However, Mr Lenihan will indicate that restructuring of the banking system is under consideration.
No proposal to reduce the number of Ministers of State from 20 to 15 will be included. This is a matter for the Taoiseach, not the Minister for Finance. However, payments to committee chairs will be cut.
