Fine Gael is planning almost €2.60 in spending cuts for every €1 it raises in higher taxes to plug the country’s deficit, the party revealed today.
Some 72 per cent of the savings the party plans to make would come from spending cuts, compared to 28 per cent from tax increases, according to its jobs and economic planning spokesman Richard Bruton.
This approach marks a departure from the party’s previously stated aim of implementing three times as much in cuts as in extra taxes. It also moves Fine Gael closer to the position of its prospective coalition partner, Labour, which is proposing 50 per cent cuts and 50 per cent taxes, or a ratio of 1:1.
Mr Bruton said the balance he was proposing, which comes out at a ratio of 2.57:1 between cuts and taxes, was vital because any imposition of higher taxes would cause a recovery plan to fail. The Government is currently pursuing a ratio of 2:1.
He was speaking along with party leader Enda Kenny and energy and natural resources spokesman Leo Varadkar at the launch of a document outlining Fine Gael’s plans to create jobs.
Mr Bruton said the plan aim to keep people working in Ireland, make it easier to start up a new business and help Irish businesses sell globally.
Fine Gael is promising not to increase income tax and to cut PRSI for the lower-paid.
The document, Working for our Future, proposes investing €7 billion in water infrastructure, broadband and energy. This would be funded by money from the National Pension Reserve Fund and by selling off €4 billion in State assets, including Bord Gais and the ESB power generation arm.
Mr Kenny said these assets would only be sold at the right time to raise money in the national interest.
The plan also provides for the creation of 45,000 placements for college interns who would be paid entry rates, work 20 hours a week and receive money for further training.
Mr Varadkar said it was “a bit rich” for Fianna Fail to criticise his party for increasing the high rate of VAT, when it intended doing the same thing over two years.
Mr Kenny was asked about comments made by former Fine Gael minister Gemma Hussey, who said yesterday that the party should have changed leader and claimed that Mr Kenny tends to “freeze”.
Mr Kenny replied that his former Government colleague was out of politics and “she should stay out of politics” and keep her counsel.
Ms Hussey had had her day and should remember the difficulties she had when she was Minister for Education and the help he had given her at that time, he said.
