A PRE-BUDGET war of words has erupted between the Taoiseach and the Fine Gael leader, with Brian Cowen accusing Enda Kenny of trying to “cod” people by saying his party would not increase income tax for three years.
Mr Cowen warned tomorrow’s emergency budget will include measures not just for this year but also for the next three or four years which will see a total “redesign of the tax system”.
Speaking in Prague, the Taoiseach said: “We have to take action on the revenue side, and any suggestions to the contrary are simply trying to cod people”.
He was responding to remarks by Mr Kenny at his party’s Ard Fheis speech on Saturday night that, if he became Taoiseach, he could restore the public finances to health by 2012 without increasing the lower or higher rates of income tax.
Mr Kenny later clarified his position that his party would introduce a “solidarity tax” on incomes at a rate of 2% on salaries below €100,000 and 4% for wages above that.
He also neglected to mention in the speech that Fine Gael wants to increase PRSI and the health levy as well as introducing a new carbon tax — all of which would hit families and individuals.
At a press conference yesterday, Mr Kenny rejected suggestions he was being dishonest with the public, saying there wasn’t time in the 30-minute address to cover every aspect of the party’s budgetary policy. “These are factors of time. You can’t mention everything about the budget. It wasn’t just a budget speech... so it’s not a case of being in any way dishonest.”
The cabinet will meet this afternoon to put the finishing touches to the emergency budget for 2009 which will be delivered to the Dáil by Finance Minister Brian Lenihan tomorrow evening.
The Taoiseach said there would be no more emergency budgets for this year:
After attending the EU-US summit in Prague, where the economy was a major topic of conversation on the margins between leaders, Mr Cowen said: “This is uncharted territory. We have a very serious challenge ahead of us and there is no painless or easy solution available. The Government and our minister for finance will be standing up on Tuesday to explain that, yes, there will be further impositions on our people, unfortunately.”
The Taoiseach warned that the shortfall in revenue will not be resolved in a year or two, but will take a much longer period of time and added that they had agreed a five-year strategy with the European Commission.
Mr Cowen last night issued a webcast on the Fianna Fáil website, saying maintaining as many jobs as possible, helping those who have lost their jobs and protecting the most vulnerable to the greatest extent possible was the goal.
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