FG rejects middle-class budget bias claim

Junior finance minister Patrick O’Donovan has rejected claims that Fine Gael’s budget plans are too focussed on middle-class voters key to the party’s future election success.

Mr O’Donovan denied the claim as Fianna Fáil again called for universal social charge cuts to be prioritised over tax band changes in order to ensure people with lower incomes benefit from the October 10 budget.

Speaking on RTÉ’s The Week in Politics programme as Independent Alliance TD Seán Canney separately said rural transport improvements and potential insurance cuts for people driving customers home from rural pubs should be considered, Mr O’Donovan insisted Fine Gael is trying to help all of society in the budget.

Middle income-earners are seen as key to Fine Gael’s hopes of gaining up to 35% of the next election vote, and as being in part behind the party’s 3-point jump in yesterday’s Sunday Business Post/Red C poll. At 30% the party’s popularity is at its highest level since the last election and 4 points ahead of Fianna Fáil.

However, rejecting claims that Taoiseach Leo Varadkar is focussing too much on middle income-earners who will benefit from changes to the entry point of the highest tax rate, Mr O’Donovan said the issue is not the real reason for planned changes.

“No, we made it very clear the last number of months that it is completely unfair a person enters into the highest tax band at that rate,” he said.

“Any time you get anything as a single person, or where you show a bit of initiative or get rewarded for being a worker, you enter into the top rate of tax.”

He said the Government wants to incentivise workers and that any other reason is “speculation”.

This was criticised by Lisa Chambers of Fianna Fáil, who said if Fine Gael wants to help the most people possible, it would cut USC from 5% to 4.5%, as under tax band changes “everyone earning under €30,000 would get nothing back”.

The row over whether to prioritise tax band changes, a cut to USC, or increased taxes to invest in housing, health, and social services, took place after Finance Minister Paschal Donohoe met a number of ministers, the Independent Alliance, and Fianna Fáil last week to discuss budget demands.

He is expected to meet again with key departments including health, education, and housing, the Independent Alliance, Fianna Fáil finance spokesman Michael McGrath, and public expenditure spokesman Dara Calleary early this week, with the budget just over a fortnight away.

Although the Independent Alliance has yet to finalise its own demands, Mr Canney, a member of the five-strong group, last night told the Irish Examiner he would like rural transport issues to be considered in the 2018 Budget.

He said the request is unrelated to the implications of Transport Minister and Alliance colleague Shane Ross’s drink-driving bill, but the Department of Finance may want to consider cutting insurance costs for people driving customers home from rural pubs, or investing in rural bus services.

Meanwhile, Social Protection Minister Regina Doherty today launches plans to help those without jobs return to work.

The scheme will include increased interaction with jobseekers support; new incentives to “remove barriers for people transitioning from welfare to employment”; welfare reforms for working families; and expanding subsidised childcare access.

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