Fine Gael and Labour yesterday unveiled a five-year economic plan which promises the abolition of stamp duty on houses under €450,000 for first-time buyers and a reduction in the standard rate of income tax from 20 to 18 per cent. The tax elements of the plan will cost €3.4 billion gross, while the public spending elements will cost €1.6 billion.
The parties' joint economic policy, Protecting the Progress: An Agreed Agenda on Tax and Jobs, also contains a commitment to increase by €5,000 the point at which one-income, married couples hit the top rate of tax and an increase in the home carers' credit to the level of the PAYE credit. The parties said the cut in the standard rate of tax, combined with the increase in personal tax credits, would ensure that no worker earning less than €10.30 per hour, or €400 per week, would pay income tax.
As well as abolishing stamp duty for first-time buyers on properties under €450,000 Fine Gael and Labour also promised that other buyers would pay no stamp duty up to €100,000, 5 per cent on the next €350,000 and 9 per cent on the balance.
However, the parties refused to be drawn on the timing of their stamp duty reform package, saying it would be decided by a future government based on the economic conditions that prevail. They said it would be a "priority" and that it would be done in one go.
In the policy document, Fine Gael and Labour promise to maintain the 12.5 per cent rate of corporation tax and the current rate of capital gains tax. They also promise a 25 per cent cut in the regulatory red tape on companies.
Outlining measures to improve the skills of the workforce, the parties say they would introduce a two-week statutory paid training period financed by the National Training Fund. The policy promises an environment that supports exports and encourages foreign investors to increase the strategic importance of their Irish operations through research and development.
The parties promise to prioritise the extension of broadband services across the State and within six months of coming to power to tender for the upgrade and "broadband enabling" of telephone exchanges in those mainly rural areas where it has been uneconomic for the private sector to do so.
On infrastructure, the parties accused the Government of a "decade of mismanagement and waste" and their document says that despite spending more than €50 billion of taxpayers' money, the Government has "failed to address Ireland's infrastructure deficit in a timely fashion".
They promise to "fast-track" urgent investment priorities such as electricity interconnection, the inter-urban roads programme and public transport.
It will establish a new Critical Infrastructure Commission to accelerate planning of key infrastructure projects and a new High Court for Infrastructure to accelerate judicial review of planning decisions by An Bord Pleanála.
On the Government's decentralisation programme, Fine Gael and Labour promise to do an audit of the existing proposals and to only proceed with those which have a sound business case, a good regional fit.
They will reverse the decision to move some of the core policy planning units of government departments away from Dublin city. The parties say one of the most important challenges is to hand on a better environment to the next generation and promise to "rebalance" vehicle registration tax to favour lower-emission vehicles and to abolish excise duty on biofuels made from renewable energy crops.