Show of unity ahead of budget

The Coalition is attempting to put on a show of unity after weekend tensions over Wednesday’s budget, which will include a raft of cuts for pensioners and hard-pressed families.

Cabinet discussions will continue over the next 48 hours to thrash out agreement on the €3.5bn adjustment which will see:

* A €10 cut to children’s allowance;

* A reduction in the fuel and telephone allowances for the elderly;

* A property charge of 0.2% of the value, with limited exemptions;

* A “mansion tax”, or higher rate of property tax, for very valuable homes.

After tensions between Fine Gael and Labour reached an all-time high during weekend negotiations, the Tánaiste, Eamon Gilmore, yesterday insisted “the entire Government is unified”.

He said the budget “will be tough” but, after this, “85% of the adjustment we have to do will be behind us, the end is in sight”.

Joan Burton, the minister for social protection, described budget discussions between ministers as “intense” but said “if one were simply to focus on personalities, I think that would be to the detriment of the work that we have to do on behalf of people in Ireland”.

The Labour Party was seen to have caved in on its previous demand to increase the rate of universal social charge payments for those earning over €100,000.

However, Ms Burton indicated that her party would stick by its commitment to protect basic welfare rates, saying it had articulated its view that living on the basic rate of €188 a week was “tight”.

She also indicated that taxing child benefit may be feasible “in a relatively short period of time” but would not be possible in this budget.

Instead, a €10 cut to the payment is expected, with the less well-off being compensated by help with childcare and school-related expenses.

A range of proposals to help older people defer payment of the controversial property charge are still under consideration by ministers.

Among the options being examined, according to Ms Burton, is using the estate of older people to settle outstanding property charges after they are deceased.

She said she favoured a series of “easy pay” options for the tax, including a voluntary scheme to allow the tax to be deducted from welfare payments.

Fianna Fáil finance spokesman Michael McGrath said that three days out from the announcement of austerity measures, “we see evidence of a deeply divided Cabinet”.

He said the budget process has been “dysfunctional”, and expressed concern that the wider Cabinet only began discussing the options as late as last Wednesday.

“Until then, it was the four-person economic management council that was running the show.

“Ministers have been bickering to the media privately that they don’t know what’s happening.

“I’m deeply concerned that we are not going to have a coherent budget presented on Wednesday which will support enterprise, support those that are most vulnerable, and ensure that the budget is progressive unlike last year’s budget.”

The Coalition has found itself faced with further difficulties today as Ruairi Quinn, the education minister, comes under pressure to clarify comments attributed to him during a private meeting.

He has refused to confirm or deny reports that he said the Cabinet shared the concerns of Labour backbenchers that James Reilly, the health minister, is not up to the job and should step down.

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