Fine Gael should not take lectures from their current Coalition partners who “crashed the economy”, a meeting of the party’s senators and TDs has heard, as a war of words within the Government deepened.
Elsewhere, at a meeting of the Fianna Fáil party, Tánaiste Micheál Martin said junior Ministers from Fine Gael had undermined the budgetary process.
The Fine Gael meeting, however, heard widespread support for three Ministers who pushed for tax cuts in a newspaper article which led to a backlash from their Coalition partners in Fianna Fáil.
Sources at the weekly meeting said Michael Creed, the former minister for agriculture said Fine Gael “shouldn’t take lectures from those who crashed the economy” and also told the meeting that as far as he was concerned “they’re still on probation in respect of their fiscal probity”.
He was backed up in his comments by Senator Garret Ahearn, who said the only reason the Government was in a position to cut taxes was because Fine Gael had rebuilt the economy after Fianna Fáil had caused the crash.
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Meanwhile, at the Fianna Fáil meeting Micheál Martin said the Government was engaged in a collective budgetary process and would make a collective decision on the budget. “Ministers of State writing op-eds is not helpful, it undermines this process,” he told the meeting, urging his TDs and senators to engage with Ministers directly on suggestions or proposals, saying the budget would be guided by the programme for government.
He “underlined”, sources said, that Minister for Finance Michael McGrath has overall responsibility for the budget process and said he would “insist” Mr McGrath is “given the space” to carry out this work, adding that “the public would expect no less”.
Multiple contributors at the Fine Gael meeting said lowering taxes and extending the entry point for the higher rate of tax was a programme for government commitment. John Paul Phelan TD told the meeting that Ireland is an outlier with its low entry point to the top rate of tax.
The pointed comments will likely add fuel to the simmering conflict between the Coalition partners, sparked when Fine Gael Ministers Jennifer Carroll MacNeill, Martin Heydon and Peter Burke wrote an op-ed in Monday’s Irish Independent calling for tax cuts worth €1,000 the average family in the budget. The highly unusual intervention was sanctioned in advance by Taoiseach Leo Varadkar.
Ms Carroll McNeill spoke to the meeting, saying the tax cuts were a programme for government commitment and would help 1.9 million taxpayers.
On Wednesday, the Taoiseach told the Dáil that he “will be insisting” that tax credits and bands will be “indexed”, or adjusted in line with inflation.
It is understood that Department of Finance calculations estimate the cost of this move at €1.3 billion – the size of the total tax package in last year’s budget.
Earlier, Mr McGrath told reporters he would be “firm” in designing the budget tax package.
Asked if he felt he was being bullied over the budget, the Fianna Fáil Minister for Finance replied: “Certainly not. Anybody who knows me will know that I can be as tough as anybody else when it comes to negotiations. I will always be conciliatory and polite.
“But I can be as firm as I need to be. And I will be. I will be designing the tax package and it will be done following close consultation with all of our colleagues across Government and that work will be finalised in the coming months.”
Although the budget is more than four months away, various elements in the Coalition have been keen to set out their stalls in recent weeks.
On Wednesday, Mr Varadkar told the Dáil: “There is a clear commitment in the programme for government that we will index tax bands and tax credits should we be able to afford to do so. We can do so and I will be insisting that commitment be honoured.”
While he said “the exact detail” was still to be worked out, he said: “We can afford to do it and that is why there will be a tax package in the next budget, as well as a welfare and pensions packages and all the things one would expect to see in any budget in normal times.”
But Mr Varadkar insisted that this would be done without any impact on spending on public services and welfare.
“Let me be clear once again, that no income tax reductions will be funded by curbing or reducing public services,” he said.
