Fine Gael says abolition of the universal social charge (USC) will cost €3.7 billion but this will be partly offset by raising more than €1.2 billion in revenue through a number of other measures.

The abolition of the USC has been one of the central issues of the opening phases of the general election campaign, with other parties saying Fine Gael’s plans are not affordable and would damage public services.

Minister for Finance Michael Noonan insisted the Fine Gael policy was affordable as he published the party's "long-term economic plan" with Taoiseach Enda Kenny, Minister for Jobs Richard Bruton and Simon Harris, Minister of State at the Department of Finance.

The party said the plan sets the broad parameters of its priorities for a second term of office if it is re-elected and would underpin its election manifesto, to be published in the coming days.

While the total cost of USC abolition is €3.7 billion, an estimated €246 million of the cost would be carried over from the last budget of the next government’s term into 2022.

Money clawed back

The party’s tax reform package will also see money clawed back through a levy on those earning more than €100,000 that will bring in €607 million; improved tax compliance measures that will lead to an additional €250 million being collected; and increased taxes on cigarettes and tobacco totalling €349 million.

Fianna Fáil has claimed this increased tax on tobacco would lead to an additional cost of €2.90 per pack of cigarettes.

Further tax cuts – such as changes in capital gains and inheritance tax and tax equalisation for the self-employed – will cost another €210 million and Fine Gael says its tax reform package will use up a quarter of the €10 billion in resources that may be available to the next government.

While Mr Noonan previously said €12 billion in resources may be available to the next government – the so-called fiscal space – this figure included money that has already been set aside for the Lansdowne Road public- sector pay agreement and capital spending.

“We made a commitment through the Lansdowne Road agreement with public service pay and we made a commitment for the four-year capital programme, and that’s €2 billion, so that brings the €12 billion down to €10 billion,” Mr Noonan said.

Spending commitments

The €10 billion figure included in the plan is for future spending commitments that will be outlined in the party’s manifesto in the coming days.

Mr Noonan said the €10 billion would be split between tax cuts and spending increases on a roughly 30:70 ratio, and the document outlines a 24:76 per cent ratio.

About €2.5 billion of the allocation would be set aside for a contingency or “rainy day” fund in the later years of the next government’s term, with about 40 per cent going towards investment in public services and the remaining 10 per cent on a “future jobs and investment fund”.

Fianna Fáil finance spokesman Michael McGrath accused Fine Gael of having their “numbers in a muddle”.

“They factor in, for example, additional compliance, €250 million: that truly is back-of-the-envelope stuff and it shows how ill-prepared the outgoing major party of government is coming into this campaign,” he said.

Sinn Féin finance spokesman Pearse Doherty said neither Mr Kenny nor Fianna Fáil leader Micheál Martin had "any realistic plan based on real figures".