Fianna Fáil has been accused of "desperation politics" and one of the "most remarkable U-turns in recent political history", following the unveiling by the Taoiseach of a massive giveaway election package at the party's ardfheis.
Within days of a warning by the Minister for Transport, Séamus Brennan, about the dangers of "auction politics", the Taoiseach announced a set of spending plans for the next five years that dwarfed anything so far announced by the Opposition parties.
However, Mr Ahern said yesterday that he had been working on the tax reform package with party advisers for months. "I am in a different position to all the other parties on tax reform because we have the credibility that we do it, the others talk about it." The key elements of the Fianna Fáil election platform include the halving of PRSI for employees and a reduction for the self-employed, a cut in the standard rate of tax from 20 per cent to 18 per cent and a 1 per cent cut in the higher rate.
The indexation of tax credits and bands in line with pay increases, a doubling of the home carer tax credit and the abolition of the income ceiling for PRSI payments are also part of the tax reform plan, which is estimated to cost €4.2 billion net or about €5.5 billion gross.
A range of other promises for which costings were not given include an increase in the old-age pension to €300 a week, an additional 2,000 gardaí, 4,000 new primary teachers, two metro lines in Dublin, the linking up of the Luas lines and new commuter rail lines in different parts of the country.
The Taoiseach said that the commitments were affordable and insisted that the tax package was a fair one designed particularly to help those on low and middle incomes.
However, Labour Party leader Pat Rabbitte described the Taoiseach's speech as "one of the most remarkable U-turns in our recent political history", coming after six weeks of lectures about prudence.
"As recently as last Tuesday, the hapless Séamus Brennan was sent out to warn the country of the dangers of auction politics. 'We will promise less because our approach will deliver more,' he solemnly told a press conference. Then five days later his leader makes a speech reminiscent of Fianna Fáil's irresponsibility in 1977, in which he promises everything bar a partridge in a pear tree for every family in the country," said Mr Rabbitte.
He said Fianna Fáil's estimate of the cost of the package at €4 billion could not be trusted. He said the five commitments Labour had made earlier in the year and its pledge to cut the standard rate of tax by two points were carefully targeted, fully costed measures. "The Fine Gael finance spokesman, Richard Bruton, maintained that 'desperation politics' had prompted the Taoiseach's political promises," he said.
Launching a Fianna Fáil billboard campaign in Dublin, the Minister for Finance, Brian Cowen, refused to be drawn on the cost of the package and said the detailed economic and fiscal framework would be announced closer to the election.
