Radical tax review central to new FF manifesto

A RADICAL tax package, extending over the lifetime of the next two governments, is to form one of the central planks of Fianna…

A RADICAL tax package, extending over the lifetime of the next two governments, is to form one of the central planks of Fianna Fail's election manifesto.

The tax reform programme proposes to significantly reduce PAYE workers' income tax contribution and to cut PRSI and levies. To offset the cost of these cuts, Fianna Fail proposes tight controls on public spending.

The party has identified taxation, unemployment, crime, the environment and rural development and renewal as the major issues for voters and has drafted in independent economic experts to assist in the assembly of its tax proposals. Details of the manifesto are expected to be completed by the end of next week and will be published as soon as the general election is announced.

Sources in the party last night said the package would also include a large measure of tax relief and incentives for investment. They described the manifesto as "the most radical overhaul of our tax system ever". It plans that within a decade - or over the lifetime of the next two administrations - those in the upper tax bracket will have their total contributions reduced by "several percentage points". Similar reductions would apply to those in the lower 27 per cent band.

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In the January Budget, the Government reduced the standard rate of income tax from 27 per cent to 26 per cent and while the top rate remained at 48 per cent, there were increases in personal allowances.

"Instead of using taxation in a penal way, it will instead be used as a lively mechanism to stimulate the economy and assist in job creation/provision of social services/ investment opportunities," said Fianna Fail sources. The party's front bench, which met to discuss the manifesto for six hours yesterday, decided that the document should be issued in two forms - a large detailed account of what Fianna Fail plans to do in government and a smaller, seven-point summary "with four sub-headings on each point" which will be circulated to households throughout the State as soon as the election campaign gets under way.

The manifesto is also expected to deal heavily with the jobs issue and will include proposals from Father Sean Realy, of the Conference of Religious of Ireland (CORI), for a rapid extension of the part-time job opportunities projects which were introduced under the last government on a pilot basis and, unlike the Community Employment Scheme, provided the going rate for the work provided.

In January, CORI described the Budget as a "triumph of greed over need". It said it had widened the gap in take-home pay between an unemployed couple and a working couple on £20,000 a year, by £530 a year.

On crime and drugs, the manifesto presents those measures suggested in the policy document in recent weeks by the party's justice, spokesman, Mr John O'Donoghue. It proposes an overhaul of the justice system, heavier penalties for drug-related crime, more prison space and the provision of rehabilitation facilities for addicts.

Following the controversy over water charges, the area of rural renewal has come in for particular attention, with measures based on proposals presented by the party's spokesman, Mr Eamon O Cuiv, six weeks ago to the front bench.

In addition to dealing with the manifesto, the Fianna Fail leadership has also drawn up its electoral strategy. This involves a four-week tour of the State's 41 constituencies by the party leader, Mr Bertie Ahern.